Wednesday, April 27, 2005

Another Problem with “Privatizing” Social Security:

Al Hedstrom, the Kitsap Pundit, has pointed out that any Soc Sec plan like our president’s will require immense new development in government IT. He explains that much more information will be needed about the current status of each person with an account, and that money will have to be correctly credited to each account within days (he says that currently Soc Sec $$ can find their way into the system 18 months late).

A new large computer system must be written to handle your account transactions, and to know, at any moment, how much money of each type YOUR account would have for you, or the account managers, to play with. The bottom line: We couldn’t start a new Soc Sec plan until all this new software was written and well-tested. Its development has to be paid for, and here’s a real likely scenario:

  • Year 2008: The program is defined so well that the system can be developed in ten years at a cost of $60,000,000...
  • Year 2015: But we've changed our minds about what we want, the software has to be redesigned. Start over…


Like calendar reform, some aspects of society can no longer be changed because of the inertia of computer change required to support them. Changing Soc Sec might first require a brilliant intermediate step that gradually adds capabilities to allow many future changes to be made in a timely fashion. Here’s how that will work:

  • Year 2007: The infra-structure is defined so well that the system can be subtly upgraded in ten years at a cost of $30,000,000..
  • Year 2011: Now that we know what we want, it turns out that the intermediate upgrades – Murphy’s Law strikes! – do not support the new plan. Start over…
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