Whatever happened to the ownership society?
That was President Bush's agenda endorsing the idea of Americans managing more of their retirement savings. The centerpiece of it would allow participants to invest a portion of their Social Security contributions in personal accounts.
The idea languished after several months of vigorous promotion by Mr. Bush early in 2005.
It was a good idea and should be revived.
Despite the coming funding crisis for the Social Security System, Mr. Bush's idea was killed by Democrats and Republicans alike, based on ignorance and misinformation about the potential risks vs. the potential advantages of individual accounts, as well as by the president's failure to clearly communicate his proposal, and his unwillingness to sustain his efforts to advance the proposal. Many of the politicians opposed to such reform are hostile to the notion of a loss of government control over a program that brings in billions of dollars annually to finance the federal budget.
Most opponents proposed no solution to the looming funding problems of the system, just denunciation of the Bush plan and keeping the existing but failing Social Security framework intact. Yet, for the program to be sustained, Social Security taxes will have to be raised further, or benefits cut beyond the increase in Social Security taxes and retirement age that were passed in the Reagan administration. Congress has done little to strengthen the program since those measures were adopted.
Unless Mr. Bush revives his appeal for personal accounts, it's unlikely anyone else could command the attention to promote any reform in the coming year. The program's funding, meanwhile, will continue to deteriorate, immune from influence of financial engineering ideas that have emerged in the last 50 years and that have served institutional and individual investors well in reducing investment risk, improving return and lowering costs.
Surely a compromise can be found that both strengthens Social Security and allows for private accounts.