Almost from the moment it was announced, the Republicans' Romney-Ryan ticket began already drawing fire for both men's plans for the "voucherization of Medicare." As it turns out, there's another reason Mitt Romney and Paul Ryan should worry America's seniors and the millions more soon to join them. Both supported President Bush's aborted scheme to privatize Social Security, only to run away from their past positions after its staggering unpopularity and the 2008 meltdown of the U.S. financial system revealed that Republican path to be political suicide.
As Ryan Grim and others highlighted, Rep. Ryan was at the forefront of George W. Bush's 2005 effort to divert contributions from the Social Security trust fund into private accounts. (He would later agree with Texas Governor Rick Perry that Social Security is "a Ponzi scheme.") To enable their Republican colleagues sell the concept to their skeptical constituents, Senator Rick Santorum (R-PA) and Rep. Deborah Pryce (R-OH) authored a presentation full of helpful talking points, such as:
"Your audience doesn't know how trillions and billions differ. They know these numbers are large, but not how large nor how many billions make a trillion. Boil numbers down to 'your family's share.' Also avoid percentages; your audience will try to calculate them in their head--no easy task while listening to a speech--and many will do it incorrectly."
As it turned out, of course, it was the Republicans who were doing the math wrong. As Matthew Yglesias summed it up last year:
What privatizers want to say is that current retirees will keep getting benefits and future retirees will be okay despite our lack of benefits because we'll have private accounts. But current retirees can't get benefits if my money is in a private account. And my account can't be funded if I'm paying benefits for current retirees.
Vice President Al Gore made the same point during his presidential debates against then Governor George W. Bush in 2000, noting that "the trillion dollars that has been promised to young people has also been promised to older people," adding, "And you cannot keep both promises." By 2005, the Center on Budget and Policy Priorities estimated President Bush's plan to let younger workers divert a quarter of their payroll taxes into private accounts would add $17.7 trillion to the national debt by 2050.
But as Jonathan Chait recounted in April, Paul Ryan made George W. Bush's "fuzzy math" seem brilliant in comparison:
In 2005, when Bush campaigned to introduce private accounts into Social Security, Ryan fervently crusaded for the concept. He was the sponsor in the House of a bill to create new private accounts funded entirely by borrowing, with no benefit cuts. Ryan's plan was so staggeringly profligate, entailing more than $2 trillion in new debt over the first decade alone, that even the Bush administration opposed it as "irresponsible."
And even more irresponsible after the implosion of Wall Street in the fall of 2008. As ThinkProgress reported at the time, studies estimated that private accounts would lose money a third of the time. That fall, the Center for American Progress calculated that "that if a worker had retired on October 1, 2008 after 35 years of contributions to private retirement accounts, that retiree would have lost nearly $30,000 in retirement funds because of the downturn in the stock market over the last two years." And while retirees would face the risks inherent in the market, according to a 1997 analysis their Wall Street money managers would reap an estimated "$240 billion in fees during the first 12 years of a privatization scheme- this number is undoubtedly much higher now." And all the while, the Social Security Trust Fund which currently helps offset the yawning federal budget deficits would be depleted by trillions over the next several decades.
Nevertheless, even after the near-collapse of the American financial system, Paul Ryan stuck with his Social Security privatization gambit.