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Justin Fox Tries to Teach Dick Armey About Social Insurance Programs

The curious capitalist writes:

Dick Armey, Social Security, private accounts and the Dutch-Aussie solution - The Curious Capitalist - Justin Fox - Economy - Markets - Business - TIME: The two best national retirement systems... are those of Australia and the Netherlands. Both countries start with government old-age payouts... funded out of regular income tax revenue, and highly progressive (if you're poor, you get a significant payout; if you're not, you don't).

On top of those come much larger retirement savings plans. In the Netherlands... pension funds... in Australia... personal accounts... invested in stocks and bonds and other such things... managed by professionals... portable....

[T]he idea of a Social Security that gets smaller and more progressive over time, coupled with some sort of large, government-mandated private retirement accounts (or "opt-out" private accounts, where money is deducted from your paycheck but you can get it back at tax time if you're willing to jump through a few hoops) isn't crazy or regressive at all.... There's also the issue of how the money in the retirement accounts would be managed. Armey appears to be okay with the limits imposed by the federal Thrift Savings Plan. The TSP is essentially a really well-thought-out 401(k), so it's not the worst thing in the world to emulate.... What we absolutely shouldn't do is put the for-profit mutual fund industry in charge. Not quite sure how we'll manage that...

What is crazy is the idea that a system designed by Armey and his fellow travelers in order to please their various masters would move us toward a good Australia or Holland-like system.