Bush Loves Pinochet's Crappy Pension Reform.

[reprehensor]

Why? Because he's a knucklehead.

(That's Prezdint Knucklehead to you.)

Chile's Retirees Find Shortfall in Private Plan

By LARRY ROHTER

SANTIAGO, Chile - Nearly 25 years ago, Chile embarked on a sweeping experiment that has since been emulated, in one way or another, in a score of other countries. Rather than finance pensions through a system to which workers, employers and the government all contributed, millions of people began to pay 10 percent of their salaries to private investment accounts that they controlled.

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The Chilean example also makes clear that introducing private accounts does not solve a lot of the problems faced in the United States, Europe and Japan, where pay-as-you-go systems remain the principal means of government retirement support.

Over all, Chile has spent more than $66 billion on benefits since privatization was introduced. Despite initial projections that the system would be self-sustaining by now, spending on pensions makes up more than a quarter of the national budget, nearly as much as the spending on education and health combined.

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Among the admirers of the privatized system here is Mr. Bush, who on a visit in November called Chile "a great example" for other countries. On other occasions, he has suggested that the United States could "take some lessons from Chile, particularly when it comes to how to run our pension plans."

The main architect of the Chilean system is José Piñera, who was labor and social security minister from 1978 to 1980 during the Pinochet dictatorship. Mr. Piñera is now chairman of the International Center for Pension Reform, co-chairman of the Cato Institute's Project on Social Security Choice, and he has been a board member of several Chilean corporations.

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