I'm 29. That places me in the last generation of Americans to experience any part of the Cold War and superimposes my formative years over eight years of Reagan Worship. Accordingly, an integral part of my image of the Baby Boomers (my/our parents) is their raging erection for privatization. Boy, those fat cats in Washington can't do anything right! There's nothing worth doing that Private Enterprise can't do better! Government-run health care programs? Privatize 'em. Military personnel? Privatize them too. NASA wants to build a space probe? Private sector will do it better. Airport security? Yeah, that can be privatized. And the big one: Social Security? Oh hell yeah, we'd best privatize the fuck out of Social Security.
This is easily one of the most fascinating issues of our time, not because it has any intellectual merit but because of its tendency to create rabid, short-lived enthusiasm at great intervals and then disappear into the ethers. One day it is all over the news and the next day it is as impossible to locate as last night's thunderstorm. It is the Keyser Soze of public policy – everyone has heard of it, no one sees it.
When Our Leader first took office in 2001 he put substantial energy into this issue. Then 9/11 happened and it summarily vanished. He gave it another push after the 2004 Election (which provided a mandate and all the political capital on Earth!). Alas, he couldn't even convince his own party – who held healthy majorities in Congress – to sign on. Again it vanished.
John McCain, a supporter of privatization (although he's trying his best to deny it for some strange reason) dipped his toe in the water early in the campaign but today he'd sooner eat broken glass with an AIDS chaser than mention it in public. And the obvious link among the issue's three most recent appearances on the national stage? Well, oddly enough it disappears every time the stock market does a half-gainer off the high board into an empty pool. Which, of course, reminds everyone who is about to retire of just how screwed they would be with a market-based "alternative."
Stocks, as the plan's supporters point out, are an excellent long-term investment. You'll generally come out ahead over 30 or 40 years. In the short term, however, they are pretty damn unpredictable. How would you like to be 65 and preparing to retire right now? You did post-retirement planning with the assumption (which held as recently as a few months ago) that your "investment" is worth X dollars. Now it's worth 60% of X. In six more months it'll be 40% of X. Why, you'd be pretty fucked, wouldn't you?
That, "my friends", is why this half-assed idea never goes anywhere – not because of the much more valid arguments about the impossibility of ushering such a behemoth pool of money into the stock market (pension fund socialism, anyone?). The right tries to railroad a privatization plan through Congress every time the economic barometer rises, but people have the annoying habit of asking questions like "Gee, what if the Dow does an uncontrolled flight into terrain six months before I retire?" The answer is pretty obvious – the providential hand of the market "corrects" your standard of living.