Quote:
Originally posted by Gattigap
One possible downside of SocSec privatization is that, despite its moral superiority, perhaps many Americans wouldn't want to be overwhelmed by the choices it presents.
- People want control over their lives; they value their freedom. But the first reason to wonder whether "ownership" is always good is that it can be stressful. It may be true, as promoters of ownership like to say, that nobody ever washed a rented car; but renters are very happy not to have to get the hose out. If it's up to you to choose how to invest your pension account, agonizing over health stocks vs. Asian bonds may not be such a privilege.
It's not just that financial planning is a dry topic to most folks. It's that modern life is overloaded with choices. In "The Paradox of Choice," the Swarthmore College psychologist Barry Schwartz shows how a certain measure of choice can be liberating but how too much is a treadmill -- sometimes even triggering depression. Freedom and choice are wonderful things that allow us to realize our human potential. But there's a limit to how many choices each of us has time to make, and most people in the rich world are pretty much maxed out already.
You see this truth in the behavior of the affluent, who actually pay to avoid choices. They hire home decorators so they don't have to stare glassily at 200 kinds of curtain rail. They hire marriage planners so they don't have to fret about cream napkins vs. white ones. There are said to be 10,000 wedding consultants practicing in the United States. If the rich are deliberately avoiding choice, why are we so sure that the majority want more of it?
Ownership does not merely involve choice; it involves risk also. A certain measure of risk is fine; indeed, if you want a dynamic society it's positively essential. But just as the modern economy threatens Americans with choice overload, so it also piles more risk on the shoulders of the average citizens. The risk of not being able to afford health care has risen, albeit because health care has more to offer than it used to. Fewer people have risk-free "defined benefit" pension plans that guarantee a fixed proportion of salary upon retirement. An index devised by Yale's Jacob Hacker shows that income volatility has increased sharply since the 1970s. Given that risk is already on the rise, perhaps public policy should avoid adding to it?
|
I've seen a whole load of articles lately about the horrors of having too many options/risky decisions to make. This is part and parcel of a greater fearful reaction to the flood of information we get regularly as a result of technology. Some Americans have this fucked up reaction to knowledge - they actually seem to believe you can know too much, or have TMI about a given topic. I hear this shit from old people all the time - "We were better off when things were simpler." Ignorance is bliss. One idiot in one of last month's NRs actually hinted that we should re-embrace religion and stop researching genetics because we're better off "believing" in an absolute than learning the scientific bases for everything. That writer's prime concern was the fact that scientists are beginning to unravel the synaptic and chemical components of what we've called our "souls" or "inner selves" for centuries. Having choice is the worst of all worlds for the "ignorance is bliss" crowd. Now, not only are they forced to think, they're forced to make decisions based on processing varying data. This is the point where the radical left and right are in agreement. They both want a larger group to make all their decisions for them. Jesus or Uncle Sam? Which will it be? Just. Don't. Make. Me. Responsible.
There are far too many rubes and imbeciles in this nation to privatize SS, but in theory, I love Bush's idea.
The simple solution to the problem of too much choice for the unskilled or scared SS investor is to offer them an opt out. They should be allowed to opt out of choosing their own investments and allow theit account to be managed by the govt. If they want to change that later - as they will when the next tech boom erupts - they should have to go through a rollover period sort of like when you roll your pension into an IRA.
