As my previous post noted, the White House's claim that people would keep every penny in their private accounts, rather than losing the amount of payroll taxes diverted into the accounts plus 3% percent annual interest, is arithmetically equivalent to their preferred description, which is that you keep the entire account but lose an identical amount via your traditional-system benefits. Despite this arithmetical equivalence between the description they dislike and what they concede is the reality, they have succeeded in getting the Washington Post to publish a retraction, headlined with the words: "An earlier version of this article incorrectly described how new private accounts would work under President Bush's Social Security plan. This article has been corrected."
What's next? If the Post reports that President Bush's second term is scheduled to last for 4 years, must it issue a retraction if the White House says no, the term is actually 48 months?
Further merry shenanigans in the "corrected" retraction article include the following:
"In effect, said Democratic economist Peter R. Orszag of the Brookings Institution, the system works like a loan, in which the government grants workers 4 percentage points of their payroll tax to invest in stocks and bonds. The loan would have to be paid back with interest out of workers' monthly Social Security checks.
"But Robert Pozen, an investment executive who served on the president's 2001 Social Security Commission disputed that characterization. A worker is simply paying less into the system so he gets less back.
"This is in no way a loan," Pozen said."
A word on Pozen. At the law firm where he was a partner when I was a young cub associate, he was most famous for reputedly screaming "I don't give a f--- about your baby!" to an associate with a young child whose help (hers not the child's) he needed over the weekend. The only time I almost worked for him (since I did tax and he didn't) was the occasion, at 6 pm on a Friday, when he asked me to do a 50-state ERISA law search over the weekend. Even at this late date, I probably ought to send a bottle of champagne to the partner I was working with at the time who very kindly got me out of the assignment. But I digress.
I'm not sure if I want Pozen as my investment executive, although I don't think I could afford him anyway. If he wants to say that something isn't a loan even though it is arithmetically equivalent to a loan, that's fine if it makes him feel good, but it's not the type of insight (or candor) that I would want from someone who was handling my money.