Say It Loud, Say It Proud!
Alberto Alesina, an econ prof at Harvard, has an interesting little article here
, contending that simply talking
about various political reforms can have real-world effects. In Germany, for instance, politicians have been yapping about gutting the welfare state for the last decade, without actually doing it. As a result, people are consuming less. In the U.S., that would be great; in Germany not so much.
Now how can we use this in the U.S.? Well, if we really want to boost the savings rate, we can have politicians run around screaming about how Social Security is in a crisis, and as a result, everyone panics and starts saving more, so that they're not wearing rags and eating grass in their old age. Hence, savings go up, investment gets boosted, growth skyrockets, and voila, Social Security is no longer in a crisis. A self-negating prophecy!
On the other hand, if politicians run around talking about how everyone's going to get these great private accounts to retire on, and if everyone believes that, then people start saving less (thinking that the private accounts will take care of everything). But if we never, in fact, get private accounts, then we've all decimated our savings for nothing, and the savings problem gets much, much worse.
Anyways, lots of scenarios. But it goes to show that there could be real economic benefits from talking up the Social Security crisis. Unless, of course, all this crisis talk leads to actual privatization. Yikes.