He asks:

1) “Would we achieve significant actuarial improvements in the health of the Social Security system by (a) changing the method by which the benefits is calculated from being based on wages to one based on prices . . . and (b) increasing the retirement age?” The answers are yes and yes. I gather that you’d have to raise the retirement age pretty high to attain the same improvements that a shift to price indexing would yield.

2) “If we can achieve significant savings and ensure the health of the system with the changes mentioned in # 1, is there a non-ideological reason for introducing private accounts? Even proponents of private accounts concede that the transition costs will require trillions of dollars of government borrowing. Do we conservatives really want revenge on FDR and the New Deal at that price? Personally, speaking as a small government fiscal conservative kind of guy, I’d give up personal accounts if any money thereby saved was spent on deficit reduction or, better yet, an income tax rate cut.”

My answer would be: It depends on what you mean by “ideological.” I suggested two possible justifications for personal accounts in my previous post: the “lockbox” justification and the softening-the-blow justification. The lockbox justification depends on some assumptions about government. A third argument that I think could be made–that it is a good thing for various reasons to see to it that almost everyone owns some capital–could also be seen as “ideological,” especially to the extent that one of the reasons it’s a good thing is that it might make the public more tolerant of sound economic policies. Even if it is an “ideological” reason, that doesn’t mean that it’s not a good reason (or set of reasons).

I would add that people like Bainbridge might want to think of personal accounts as a kind of payroll tax cut–a tax cut made conditional on the money being invested in certain ways, to be sure, but still a decision by the federal government to let people retain ownership of their money.

3) “Why aren’t conservatives talking about other entitlement programs, such as Medicare, which reportedly is scheduled to go broke long before Social Security does?” Beats me. I suspect that the answer is that a reform of Social Security that reduces its future costs looks more achievable than a reform of Medicare. If it is true that Social Security reform will yield an electorate more disposed to such policies as a reform of Medicare, then it certainly makes sense to tackle Social Security first. That could be either because of the investor-class theory or because Social Security reform had demonstrated that entitlements can be reined in without destroying whoever proposed it.