WHEN, NOT IF:

Retiree accounts gaining adherents (Charles Stein, December 20, 2004, Boston Globe)

In 1978, Peter Ferrara decided to write his third-year paper at Harvard Law School on the subject of Social Security. A self-professed conservative libertarian, Ferrara argued that the system would eventually run into financial trouble and that the best way to fix it was to let people put money into personal accounts that could be invested in stocks and bonds.

A fledgling free-market think tank called the Cato Institute heard about the paper and published it the next year as a book called ''Social Security: The Inherent Contradiction." The book didn't get much attention, and even Ferrara concedes his proposals were dismissed ''as right-wing ideas."

Twenty-five years later, Ferrara's ideas are still popular among conservatives, but they are no longer being dismissed. Far from it. President Bush has made Social Security his top domestic priority, and he has endorsed personal accounts as part of fixing the system. Opinion polls suggest that roughly half the American people support the concept.

It is not clear private accounts will win support in Congress.

''I wouldn't bet the ranch," said Edward Crane, president of Cato. What is clear is that over the past two decades the idea has moved from the political fringe toward the political mainstream.

It was pushed along by a determined group of free-market true believers, who over time have changed the terms of the debate -- in part by painting a very dark picture of the finances of the traditional Social Security system.

Their cause was aided immeasurably by a development no one could have predicted: the rise of an investor culture. The bull market of the 1980s and 1990s and the spread of 401(k) pension plans created a large class of people who think of themselves as investors and are comfortable managing their own money.

''Many people see this as a matter of choice and personal empowerment," said John Zogby, a pollster who tracks the issue.

Voters eventually get what they want.

Posted by Orrin Judd at December 20, 2004 9:04 AM