Marketing Social Security

The Bush administration has made a mistake in the marketing of Social Security reform. Early on in the debate, the administration said that personal retirement accounts would not fix the solvency problem. Assuming that these accounts had the same returns as Social Security, that would be true; but everyone knows (based on the Thrifts Savings Plan, and past market performance) personal accounts would actually have a much higher rate of return than Social Security.

In the almost inevitable case that personal accounts have higher returns than Social Security -- the benefits cut due to Social Securities solvency problem (unless we want to drastically raise taxes) would be more than offset by these personal accounts higher returns. Thus the president should say, "we have two options to save Social Security. My plan: personal accounts, which would help fix solvency; or the only other alternative -- a combination of higher taxes and lower benefits." Faced with a choice between taxes hikes/benefit cuts on the one hand, or personal accounts on the other, I believe the electorate will easily choose the latter.