Dean Baker

Recent Articles

Anti-Social Behavior:

When President Bush first described the war against terrorism, he warned that we may never learn of some of the victories therein. One such victory that has largely escaped public attention occurred last week, when the Bush administration kept the 2002 Social Security trustees report out of the hands of terrorists.

Ordinarily, the annual trustees report, which provides detailed projections on the health of the Social Security program, is released at any early morning press conference. Copies are made available to anyone who wants one. The report is also posted on the Web, where the public (and terrorists) can freely download it.

Two Cheers for Clinton's Social Security Plan

President Clinton's plan to extend Social Security's solvency through 2055 preserves the existing benefit structure and rejects individual accounts. The plan relies primarily on placing most of the projected 15-year budget surplus into the Social Security trust fund. These aspects of the Clinton plan have been warmly welcomed by progressives who feared an imminent compromise that would have added individual accounts by diverting revenue from the current system. Partly to increase the projected rate of return, and partly to steal the privatizers' thunder, the President also proposed placing some $600 billion of the projected surplus into the stock market to earn a higher return. This part of the plan warrants a more wary reception.

Behind the Numbers: The Privateers' Free Lunch

The flawed mathematical assumption behind privatizing Social Security.

Behind the various proposals for privatizing Social Security,
in whole or in part, is one seductive assumption. By investing
their savings individually in financial markets, rather than collectively
relying on the Social Security system, workers supposedly will
get a greater return. This premise is the basis of the proposals
by two factions of the Social Security Advisory Council for government-mandated
individual savings. It seems a reasonable belief, particularly
given the stock market's stellar growth in recent years.

Bull Market Keynesianism

As we wait for the dust to settle from the current global financial turmoil, it is a good time to assess the lessons to be learned from the nineties business cycle.

The Inflated Case Against the CPI

A consensus seemingly has emerged that the consumer price index exaggerates inflation. But before we change the numbers, we had better look closely at the arguments. They don't hold up.

here is now the appearance of an expert consensus that the
government's most important measure of inflation, the consumer price index
(CPI), seriously overstates the true increase in the cost of living. This sudden
enlightenment is less the result of new research than political convenience. A
cut in the CPI would reduce government payouts and ease the path to deficit
reduction. Even better, it would do so via a technical adjustment that left few
political fingerprints.