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PRESS RELEASE


Peter Ferrara:
Cato Institute Wants To Get Rid of the Entire Social Security System

Feb. 24, 2005 (EIRNS)—Peter Ferrara, an outspoken proponent of Social Security privatization blurted out the truth to today's Washington Post, "Cato wants to get rid of the entire Social Security system, and I don't." Ferrara spent a decade as the Mont Pelerin Society-created Cato Institute's lead analyst and proselytizer for Social Security privatization, and another 15 years working with Cato, so he is well-positioned to know what he is saying about Cato. EIR has documented that Cato Institute took over and wrote most of the recommendations of the December 2001 final report of President Bush's official "Commission to Strengthen Social Security," which Bush adopted and presented, with minor changes, in his Feb. 2 State of the Union address. Therefore, Ferrara is admitting that Bush wants to get rid of Social Security.

The Post presents a fractured fairy tale about how, in the late 1970s, an independent 24-year old Ferrara had a plan to privatize Social Security which caught the eye of Ed Crane, who had founded the Cato Institute in 1977. The reality is that during this period, Ferrara was working at a Boston consulting firm with Art Laffer—the protégé of the fascist Mont Pelerin Society's Robert Mundell—on a project to build an econometric model to prove the quackish Mundell-Wanniski-Robert Bartley "supply-side economics." At the same time, Ferrara picked up Milton Friedman's idea to get rid of Social Security, and mixing it with supply side garbage, Ferrara developed a plan to privatize Social Security.

The Post reports that Ferrara and Ed Crane "were encouraged in 1981, when Chile ... added investment accounts to its retirement system," and cites the role of George Shultz's asset José Piñera, who is "helping Cato to spread the gospel of private accounts."

Today, Ferrara and Cato are having a nasty lover's spat: both would divert half of the 12.4 percentage points in taxes that workers and employer combined would normally pay into Social Security, instead into Wall Street- managed private accounts. But Cato openly calls for sharp cuts in retiree benefits; Ferrara says that openly backing cuts will defeat privatization in Congress (instead one should "disguise" the cuts).