Conservatives and libertarians have been debating among themselves the idea of letting people take some of their Social Security benefits early: As new parents they could get money from the government to finance time off work, in return for delaying their receipt of Social Security benefits for a financially equivalent amount of time.
The other day I argued here that some righties are making criticisms of this idea that apply equally to the old idea, nearly universally applauded by conservatives and libertarians, of personal Social Security accounts. Maybe, I suggested, they should take another look at the paid-leave idea. Veronique de Rugy has responded. But her points all fall into one of two categories: Either they misdescribe the personal-accounts idea or they simply restate arguments against paid leave that, as I already pointed out, apply equally to the personal-accounts idea.
Her arguments that paid leave would be a new entitlement, that politicians could refuse to deliver the spending restraint used to pay for it, and that it speeds the insolvency of the Social Security trust fund are all, as I originally noted, arguments that apply at least as much to personal accounts. Introducing personal accounts would speed the trust fund’s insolvency a lot more than family leave, since the numbers involved are much larger; and this effect of personal accounts was central to the argument that liberals made against personal accounts.
De Rugy leaves the misimpression that personal accounts, by themselves, would make Social Security more solvent. That’s false. They would only reduce the program’s long-run fiscal shortfall if they were combined with changes to the program’s existing benefits—if, for example, young people gave up some of those benefits in return for having the ability to put some of their payroll taxes in personal accounts. Even then, there would be a medium-term financing issue, since people would be effectively trading future benefits for an account today. It is the exact same financing issue de Rugy decries when it comes to the paid-leave idea, only bigger.