Capital Commerce: Long odds on Social Security plan
The odds seem to be going against President Bush's ambitious plan to change Social Security. Various news accounts report that Republicans in Congress have told the White House to look for an escape route. "We are stuck," South Carolina Republican Sen. Lindsey Graham told the Washington Post.
It seems that the GOP is having a tough time getting its act together even on the issue of Social Security solvencytweaking benefits or the retirement age so the system doesn't go bustand that issue is considered a far more politically viable approach than allowing workers to divert some of their Social Security payments into private investment accounts.
But you don't have to rely on pundits or politicians to tell you Social Security reform is dead in the water. At Intrade, an online betting market based in Dublin, bettors are giving just a slender 6.5 percent chance that any sort of Social Security privatization bill will be passed this year. Further out, the odds improve a tad, with bettors willing to say there's a 21 percent chance that a bill will be passed by the end of 2006.
That's still a long shot, though. To put the numbers in some context, the betting market thinks the chances of a privatization bill being passed are about the same as Osama bin Laden's being captured or killed this year.
How much stock should you place in these predictions? Well, studies have shown betting markets to be more accurate prognosticators than professional pundits and analysts. And during the 2004 presidential election, Intrade markets correctly predicted both a Bush victory and the correct winner in all 50 states and the District of Columbia.