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A very happy unintended consequence: Changing public employee retirement plans to defined contribution should help speed “privatization” of Social Security

The struggle to deal with bloated public pensions continues. Less reported, but equally as important,  is that already several states and many local governments have already instituted reforms: putting new hires into defined contribution/401k type plans.  And some have already taken the step of freezing existing defined benefit plans for current employees, and settign up defined contrubution plans for future benefits. This trend will no doubt continue, and at an accelerated pace.

The core constituency of the Democrat party is the government workers unions. The  Democrats in Congress ( elected overwhelming with union funds and manpower) are the roadblocks to privatizing Social Security. At some point it will be impossible to justify denying the vast majority of American workers the same opportunity that government workers will soon be enjoying.

If we are fortunate in 2012 to have a Republican in the WH, and GOP control of Congress, any attempt to reform Social security must include privatization. It makes no sense to debate raising the retirement age, or any of the other remedies mentioned, without the one reform that could significantly help put Sociual Security on a sound financial foundation.

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