Greenspan Explains it All

Here are two things about Bush’s Social Security privatization scheme I’ve learned reading through Alan Greenspan’s testimony in the Senate today:

1. Private accounts won’t do anything to make Social Security more financially secure.

SEN. REED: Various administration spokespersons somewhat reluctantly have admitted that the private accounts plan that has been announced will by itself alone do nothing to improve the long-term solvency of the Social Security system. Do you agree with that?

MR. GREENSPAN: I do, Senator.

2. Private accounts won’t do anything to increase national savings.

SEN. REED: Would you also agree…that the private accounts will basically leave national savings unchanged, since the government is borrowing money to give to individual citizens to invest in the market?


Why, exactly, is this a good idea?