Noam Scheiber of the New Republic is worried that Bush might win with a compromise proposal that creates “add-on” accounts. After a few years, he warns, Republicans will propose letting people put their payroll taxes into these accounts. The Bush plan will triumph on the installment plan. As Scheiber notes, Paul Krugman has the same fear.

It seems to me that the underlying logic of the Scheiber-Krugman position is to oppose IRAs and 401(k)s, or at least to oppose any increase in the number of people who have them. The more people have them, and the more experience people have with them, the easier it will be for Republicans to propose letting people deposit payroll-tax money into them. Scheiber needs to worry more about the possibility that people will become fonder of investing their own money and less about the particular mechanisms by which this happens.

As for the political likelihood of this scenario unfolding, I’d say it’s up in the air. I think it would be hard for Democrats to oppose add-on accounts, especially if they were targeted at the poor. That was a Democratic idea from the start. The bigger problem would be getting Republicans to support the idea. I’m for it, but my view is not prevalent among Republicans.

One thing I find interesting about the debate is that many Republicans support personal accounts because of what one might call a dynamic analysis of the politics of the investor class. But they haven’t incorporated that analysis into their personal-account strategy. By all means, for example, conservatives should try to make sure to make the maximum size of the account as high as possible. But if the whole underlying political theory is correct, then we have reason to think that whatever number we start with, we’ll end up with a higher number over the long run.

So to with “add on” accounts. To conservatives who say that they would “do nothing to solve Social Security’s fiscal problem,” I would respond that that’s the case only if we assume that expansions of the new investor class don’t have salutary political effects–which, again, is the theory that most of these same people hold (or think they hold).

There are good reasons for conservatives to prefer personal accounts “carved out” of Social Security to “add-on” accounts, but ultimately I’m for almost anything that expands the number of people in the markets and the extent of their involvement. (And Scheiber ought to be opposed to anything that does those things.) But if a passable deal required a majority of Republicans to come around to that position, it’s an open question whether it would happen.