When Bush proposed an innocuous partial privatization of Social Security–that would have involved only 4%–Democrats and Republicans alike shot it down. Bush couldn’t even get his own party to support what would have been a very modest proposal.
Now, however, Treasury Secretary Henry Paulson has decided to use $250 billion of the $800 billion in bailout money to invest in the nine largest banks in America. That Paulson proclaims that the investment should make a reasonable profit means nothing; of course he is going to say that.
On the other hand, it seems hypocritical that one would oppose a partial privatization of Social Security–which would merely have allowed, not required, citizens to invest 4% of their social security money in index funds–while supporting a large-scale direct investment of taxpayer money in individual stocks, which have been quite volatile.
Question: Why is the latter a good thing and the former a huge risk?