PubliCola Can't Get Anything Right

| | Comments (0)

So this time, PubliCola says John Koster is wrong about private Social Security accounts. Koster said recently, "Just think how much further, how much better off we'd be, if we'd started [optional private Social Security accounts] ten years ago."

PubliCola, knowing little and assuming much, says, "... according to data on Yahoo Finance, seniors would have seen a 39.4 percent crash in retirement savings invested in the market tracking a year out from the crash to right afterward." But why would anyone invest their retirement savings only a year before the crash, until right afterward? The whole point of private accounts is not for current retirees, or people retiring soon, to dump their money in the market, but to provide a stable long-term option for people whose retirement is farther off. Cherry-picking a window that would apply to few, if any, retirees is inherently dishonest.

Koster was explicitly talking about long term: he said "ten years ago." Any possible sensible and honest analysis will look at what would happened in that ten-year window to see if he was right. And it turns out, Koster was right: the DJIA has seen a 50 percent increase in the last ten years, which is pretty huge. From August 2002 to August 2012, it's increased from over 8700 to over 13,000.

There's only one ten-year window that would not have seen a net gain in the DJIA: from late 1998 until around early 2001 to 2008/2011, which brings us from soon after the crash until the beginning of the recovery. And every 15-year window shows dramatic gains.

Of course, past success is no predictor of future success, and there's measurements other than the DJIA that may be better. But the point is that private accounts -- to this point, as best we can tell from the facts -- would have worked just fine for the younger workers they were aimed at, and PubliCola is still telling false stories to try to smear Koster.

Leave a comment

<pudge/*> (pronounced "PudgeGlob") is thousands of posts over many years by Pudge.

"It is the common fate of the indolent to see their rights become a prey to the active. The condition upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime and the punishment of his guilt."

About this Entry

This page contains a single entry by pudge published on September 4, 2012 10:53 AM.

Pubicola Smears Koster Again was the previous entry in this site.

Koster Releases Funny DelBene Ad is the next entry in this site.

Find recent content on the main index or look in the archives to find all content.