So that’s why President Bush’s proposal to bring personal accounts to Social Security went down the tubes!
As the chairman of the president’s Council of Economic Advisors from 2003 to 2005, Dr. Gregory Mankiw was assigned the task of making the economic case for personal Social Security retirement accounts.
It was a huge task, granted, but one the president, scads of Republicans and just about every conservative worthy of the name—especially the IPI folks, including senior fellows Peter Ferrara and Larry Hunter—had been talking about for a long, long time. And when presented positively—as a way for people to deposit their hard-earned money in a safe, personal savings account that belonged to them and would be there at retirement—the public liked the idea.
But that’s not the way Mankiw saw it. Instead of seeing personal accounts as a positive way of ensuring retirement security while reducing the government’s financial liability, he asserted that they wouldn’t fix the problem. What was really needed was to raise the retirement age and cut the benefits.
Or, as it’s known in political terms, the “hand a presidential victory to the Democrats” plan.
It’s a mystery why Mankiw couldn’t understand that letting most workers switch from a publicly funded pay-as-you-go system to a personally funded system adequately addresses Social Security’s long-term fiscal crisis. Maybe that’s what passes for economic analysis at Harvard, where he is now teaching.
To lend credence to that Harvard-think insight, Mankiw has recently called for an increase in . . . the gas tax, by one dollar a gallon.
This idea is so bad that no one but someone needing tenure at Harvard would even propose it—where it was likely greeted by colleagues as a breath of fresh “conservative” thinking.
Of course, most working people, who have to make trade-offs between their gas bill and other necessities of life, would be hit hard by such a tax. But hey, no problemo for Mankiw; he and his Harvard colleagues can afford a Prius if they want one.
So the same guy who didn’t think personal Social Security accounts would help people or Social Security thinks a gas tax will be a boon to the economy.
The best thing we can say is that at least now he’s at Harvard—where he can’t do any real harm.