Social Security hysterics.

• Position: Pres Clinton's proposal to privatize Social Security - Column

Bill Clinton will go down in history as the gravedigger of the New Deal. In his first term, he interred welfare. Now he's preparing an adjoining plot for Social Security.

In early April in Kansas City, Clinton held the first of what he says will be four public meetings around the country this year on Social Security. While he hasn't come out with a proposal yet, he signaled that he would entertain a whole range of changes to Social Security, including privatizing part of the system: letting workers invest part of their Social Security taxes in the stock market, instead of having the Social Security Administration invest those taxes in Treasury bills.

Clinton is not the only Democrat singing the privatization tune. Senator Bob Kerrey, Democrat of Nebraska, has been belting it out for some years now.

Full privatization would be a dream come true for Wall Street investment houses, but for people who depend on Social Security for survival, it could be a nightmare. It would make their retirement savings vulnerable to stock-market dips. If there was a crash, or anything close to one, many people could see their savings wiped out.

"Stock returns are highly variable from year to year, and there have been years in the past with negative returns," warned the Government Accounting Office in April. The GAO's report considered a proposal to have the Social Security Administration invest revenues in the stock market. The trust fund "would be vulnerable to losses in the event of a general stock market downturn," it said. If it's risky for the government to do, why force American workers to absorb the risks themselves?

Privatization would also undermine the commitment to universality, the idea that our government has an obligation to all of us to ensure that we have certain basic necessities, like the ability to retire without going broke. In the age of Clinton, this New Deal foundation has shattered. The poor and their children can no longer count on government assistance. Soon the same may be true of the elderly.

The ethos of the age is that the market can solve all problems. It can't. We are witnessing this failure today with the paltry performance of workfare. And tomorrow, when the stock market dives, we will witness the fallacy of privatizing Social Security.

Free marketeers love to tout efficiency as a cardinal virtue, but privatization would be terribly inefficient compared to the way Social Security operates. The administrative costs of the system...