The New York Times, summarizing John McCain's stance on Social Security:

He said he favored offering private investment accounts to younger Americans, though it was not clear that investment accounts alone could address the financial shortfall that the retirement system could face in coming decades.

News accounts are constantly saying something like this. It's one of those phrases that seems to be programmed into the computer of every reporter who ever touches on Social Security. But it's wildly inaccurate. Private investment accounts do not improve solvency at all. They make it worse.

Look, it's pretty simple. If you let younger workers divert some of their Social Security tax dollars into private accounts, then that money is not available to pay for regular Social Security benefits. So for every dollar of private accounts that would be created, another dollar of benefits has to be cut just to stay even. If the only element of your plan is to create private accounts, which is the case with McCain, then your plan worsens Social Security's finances.

I think I've made the following analogy before. Suppose my "plan" for saving Social Security consists of building giant gold statues of President Bush throughout the country. (Maybe the theory is, I don't know, that the statues would make future retirees more patriotic and thus more willing to accept lower Social Security benefits.) If newspapers reported on this plan, would they say that "it's not clear that the statues alone could address the financial shortfall that the retirement system could face in coming decades"?

--Jonathan Chait