Mercury Rising

... to go forth and correct Bush's bogosities:

IN WHICH WE SPEAK TO THE BLOGGERS: How large will those “transition costs” really be? An editorial in this morning’s New York Times offers this assessment:

NEW YORK TIMES (2/18/05): As the nation's top banker, Mr. Greenspan was on surer ground when discussing the borrowing needed to establish private accounts—an estimated $2 trillion over 10 years, and $4.5 trillion over two decades. He said it would be a risky thing to do.

There! Readers will make an obvious assumption—transition costs will top out somewhere near $4.5 trillion. But for the third time in recent weeks, let’s recall what Paul Krugman wrote in the Times just last month:

KRUGMAN (1/11/05): Advocates of privatization almost always pretend that all we have to do is borrow a bit of money up front, and then the system will become self-sustaining. The Wehner memo talks of borrowing $1 trillion to $2 trillion ''to cover transition costs.'' Similar numbers have been widely reported in the news media.But that's just the borrowing over the next decade. Privatization would cost an additional $3 trillion in its second decade, $5 trillion in the decade after that and another $5 trillion in the decade after that. By the time privatization started to save money, if it ever did, the federal government would have run up around $15 trillion in extra debt.

Uh-oh! According to Krugman, transition costs will actually run “around $15 trillion” in the next four decades! “These numbers are based on a Congressional Budget Office analysis,” the erudite Times scribe quickly said (see THE DAILY HOWLER, 2/17/05).

So which is it? Will transition costs be $4.5 trillion over two decades or $15 trillion over four? Most likely, both figures are generally accurate, with the Times simply using a shorter time frame, the way the Bush Admin likes; this produces a less-troubling number, a number which keeps the eds from getting “pummeled as liberal ideologues, even when they are only seeking the facts.” After all, the long-term transition to private accounts will not be completed in two decades—so why should “transition costs” end at that point? We’ll guess that Krugman’s CBO account is essentially right, and that the Times is just being polite, a trait of so many modern scribes.

By the way, this would be an excellent point for the boys and girls of the liberal web to pursue. Speaking of magical transformations, we note that they stopped discussing “private accounts vs. personal accounts” after Daddy told them it was pointless; now, we’ll suggest that the size of those transition costs could help win the privatization debate. Recent polling made it clear—support for Bush’s plan drops fast when transition costs are described (many citizens know nothing about them). And readers, which number would drive support down faster? Fifteen trillion dollars—or four?

No, they don’t have to say where they heard it; they can pretend that they got it themselves. But if the transition will cost $15 trillion, the public should hear it shouted out every day. And bloggers, don’t wait for those Big Dems to say it! Trust us: You’ll be old and wise, with a pretty white beard, before that glorious day ever comes. As we’ve noted, Major Dems persistently use the budget numbers that favor Bush. If we want a sharper line to emerge, it will have to emerge from the web.

# posted by Phoenix Woman @ 2/18/2005 01:11:00 PM