Deinonychus antirrhopus

Matthew Yglesias's Positive Vision Thingy

In his post on how there is no crisis in Social Security and that the Democrats should do nothing in regards to Social Security, he does conclude that the Democrats should do something. That something is to put forward a positive vision thingy.

• Bringing the general fund budget into balance.
• Reducing Medicare expenditures by eliminating some of the pointless corporate subsidies in the 2003 Medicare Reform Act.
• Replacing tax deductions for saving with tax credits for saving to broaden access to existing private account-esque devices like IRAs and 401 (k) plans.
• Reform of the private pension system.
• Spitzer-esque Wall Street and corporate governance proposals.
• Making the point that current fiscal policy implies an interest rate hike that will wipe out large portions of most families savings by depressing home sale values.

Now the first two sound reasonable although I'm sure Matthew and I have different views on how the first one should be accomplished. I'd be all for cutting spending, and unfortunately Bush seems to like spending money.

The third item I do have a question about. The shift from a tax deduction to a tax credit might induce people to take larger risks. After all I now have more money going into that 401(k) or IRA, so why not get a little bit more risky with some of it with the hopes of getting a higher return. But I thought this was a bad thing. After all, we keep hearing about what horrible investors people are and how increased risk is actually a Bad Thing. So this one is puzzling to me. Sounds like more of that Liberal talking out of both sides of the mouth kind of thing.

As for reforming the private pension plan sytem I'm curious as to what is wrong with the current system that it needs reforming? I'm also curious as to how these reforms will do anything to help address the issue of funding retirment.

The corporate governance thing strikes me as typical Liberal/Lefty pablum. Things will be good if he just add more rules, laws and regulations. We saw the same thing back when the Enron, WorldCom, and Adelphia scandals first broke. Everybody, including President Bush, started talking about reforming and new rules for corporate governance (and not unsurprisingly everytime this was in the news the stock market would head south). This always struck me, and still does, as an silly position. I saw it as being analogous to adding new speed limits to address the issue of speeding vs. putting a traffic cop out there to start busting the speeders. Lots of hype and hot air, but with really nothing to show for it.

The last one I'm not sure is going to be a big deal. Granted the interest rates would probably rise due to deficits, but by how much is a big part of the question. I always enjoy it when an emprical point is made with literally zero data to support it. Overall a mish-mash grab bag of policies that would probably do very little in the end.