Social Security `Privatizers' Unbowed; Rethinking Retirement Privatizing
The unnerving spectacle of the stock market shedding almost a fifth of its value in less than two months might be expected to cool the enthusiasm of "privatizers" who want to give Americans the power to invest their Social Security funds in stocks. It has not.</br></br>The market's recent imitation of a deranged elevator -- rising reassuringly one day only to plunge sickeningly the next -- comes as no shock to economists, policymakers and citizens who have faith that the long-term trend is up.</br></br>But if these recent fluctuations worsen into a longer-term funk that lasts until Congress takes up Social Security reform, perhaps as early as next spring, proponents and critics said it could be difficult to pass legislation to shift part of the trust funds into private accounts.</br></br>Rep. Mark Sanford (R-S.C.), among Congress's leading privatization proponents, said he worries that a continued market slide could hurt his side. "The politics will be tough, real tough if the market sinks," he said. The idea's prospects could depend on "where the stock market {is} going to be next spring," said Rep. Jim McDermott (D-Wash.), an opponent of private accounts. "If {the Dow Jones industrial average is} at 6,000, nothing's going to happen. If it's at 12,000, well . . . "</br></br>After hitting a peak of 9,337.97 points on July 17, the Dow began to fall, bottoming out at 7,539.07 on Aug. 31, a drop of more than 19 percent. It closed yesterday at 7795.50, still more than 16 percent off its peak.