Krugman says that one of the two biggest problems with social security privtatization is that it leaves retirees in poverty. The other problem is that firms will take handling fees for private accounts. Since that is chiefly an efficiency argument rather than a moral one (unless the former Enron advisor thinks it’s immoral for firms to charge for services) I am assuming he thinks the tendency of privatized systems to “leave many retirees in poverty” is his chief moral complaint. Fair enough. It’s a good complaint.
But here’s what I’m missing. The current Social Security system leaves retirees in poverty too. Doesn’t it? This is not my field of expertise, but I quickly looked up the stats for poverty among the elderly. It’s 14% according to no doubt
Krugman-approved sources . Though the Census Bureau says it’s closer to 10% (and twice that for blacks). What the Census bureau also says is that poverty among the elderly has been higher than 10% since they started collecting data. It’s gone down steadily since 1959 (where the table I found began) but I doubt Krugman would attribute that trend to Social Security so much as to rising prosperity generally.
Anyway, the point is that if Krugman’s big objection to the new system is that it leaves retirees in poverty, why isn’t he troubled by the fact that the current system does too? Why doesn’t he even mention it? Or, again, am I missing something?