Tag Archives: World Bank

Pie in the Sky in Eastern Europe: The Ryan Plan in Action

Vice presidential candidate Paul Ryan has been pushing Social Security privatization for the better part of a decade. What if his plan was actually implemented? An important new paper looks at what happened when Hungary and Poland attempted something similar with their national pension systems. The results were ugly.

It’s been reported that Paul Ryan is no longer pushing Social Security privatization. House Republican leaders “refused” to let their Budget Committee chair “add changes to Social Security” into the budget he wrote last year and that passed the chamber with solid GOP support. This year, he and his colleagues again “left the program untouched.”

That’s not quite true. Ryan has now written two budgets, both of which include Continue reading Pie in the Sky in Eastern Europe: The Ryan Plan in Action

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When pension benefits are cut overseas, it’s not just a sad sidelight to the Social Security wars in the U.S. It has a direct effect on the debate in this country. Greece is the latest to do so, joining Hungary, France, Italy, Germany, and others that have enacted or are considering such moves. You can bet the deficit hawks in this country are watching, and are encouraged.

The new law, enacted Thursday, raises the age for receiving full pension benefits to 65 for all Greek workers; shifts benefits calculation to key off lifetime earnings rather than the retiree’s most recent, highest-paid years; and makes it easier for employers to fire workers. (That last has an effect on pension levels too, since it will lead to more and longer periods of unemployment, especially for low-wage workers, depressing one component of the formula used to calculate benefits.)

This should all sound very familiar. The last time a really serious surge of interest in “reforming” Social Security hit Congress – as opposed to the Bush administration’s comic-opera privatization campaign in 2005 – was in the mid-’90s. That’s when a small but highly influential group of lawmakers, Continue reading Feedback Loop

Hungary: Template for Social Security’s Future?

Former Sen. Alan Simpson, co-chair of our super-secretive National Commission on Fiscal Responsibility and Reform, says the panel is looking at “15 different options” to restructure Social Security. The commissioners aren’t letting on what these are, of course. But they may be looking carefully at Hungary, where the post-communist government adopted a partially privatized system in 1997 and is now thinking of downgrading it still further.

Let’s review the order of events:

Hungary was one of a slew of former Eastern Bloc states that adopted radical pension “reform” in the ’90s, spurred by two factors: 1) They were nearly broke, and so when the World Bank and International Monetary Fund came offering loans if they would only adopt certain structural reforms like pension privatization, Continue reading Hungary: Template for Social Security’s Future?