I was reading Matt Zeitlin on Social Security, a post in which he says:
The real problem with her argument is that Obama’s rhetoric on Social Security buys into a particular frame — that social security reform is an urgent agenda item — that really serves two purposes: One, to find a large “crises” that the David Broders of the world can blame on both parties and two, to create an enviroment where conservative proposals to destroy Social Security will become acceptable (Garance collected some great quotes to this effect).
This echoes the accusation that I want to "Destroy the public school system". There's an implication that conservatives have no reasons for this--just a wanton desire to destroy anything good, especially if it goes against their weird, talismanic belief in the markets.
Forgive me if I suggest that this itself implies a weird, talismanic belief in the superiority of the status quo. A lot of the articles I read from the left simply assume that the school system, or the social security is worthy of defense.
But I come neither to praise public programs, nor to bury them. To me, the programs are a means to an end: educating all of America's children, keeping the old and weak from starving. The question is, do they do a good job at reaching these ends, and at what cost?
If I were designing a system to serve these ends from scratch, would they look anything like the current system? No, obviously, because I'm a libertarian; my solution would look a lot like a means-tested voucher. But even a liberal trying to put together a school system or a retirement program would be very unlikely to design anything even remotely like what we have today. So why are they so hysterical about "destroying the system"? I'm interested in the people it serves, not the bureaucracy and the buildings.
But even a liberal trying to put together a school system or a retirement program would be very unlikely to design anything even remotely like what we have today
Perhaps. But while zero-based budgeting may have some merit, administrative heritage is a fact and zero based institution building is an irrelevant fantasy
Isn't a weird talismanic belief in the virtues of the status quo the definition of conservatism?
This echoes the accusation that I want to "Destroy the public school system".
Right. Liberal/left arguments with their opponents tend to be moral in nature: "The person I'm debating has evil motives."
Libertarian/Conservative/right arguments with their opponents tend to be empirical in nature. "The person I'm debating is stupid/misinformed/doesn't understand the economy or human nature or how the world works."
I'm not saying one is better than the other, nor that there aren't plenty of exceptions, but as a rule it seems to apply quite often.
This echoes the accusation that I want to "Destroy the public school system". There's an implication that conservatives have no reasons for this--just a wanton desire to destroy anything good, especially if it goes against their weird, talismanic belief in the markets....But even a liberal trying to put together a school system or a retirement program would be very unlikely to design anything even remotely like what we have today. So why are they so hysterical about "destroying the system"?
Do you genuinely wonder about that? I suspect you don't, but taking you at face value for purposes of this post, it's the same reason that gun owners don't trust gun control advocates who say they don't want to take away people's guns. They don't trust your motives and they don't believe that you'll stop partway down the slippery slope.
Same thing with pro-choicers not trusting pro-lifers who claim to "only" want to limit certain practices like D&X. Or liberals not trusting Republicans who want to "reform" Medicare.
In each case you can find some people on the other side who have confessed to more comprehensive goals, and so the defenders of the status quo have some valid reason to be wary of reformers - especially when the ideological predisposition of the would-be reformers is such that it's perfectly obvious that they wouldn't mind a bit if the 'well-intentioned reforms' just happened to go all the way and wreck the public schools/end Social Security or Medicare/ban all guns or abortions. Even if the putative reformers disavow such goals, at least some of their ideological comrades-in-arms have publicly embraced the goals in the past.
You yourself freely confess that you just want to see people educated and pensioned any way the market permits it, and you couldn't care less if the public school system/Social Security evaporated. So why should those who think the public schools/Social Security serve an important purpose, and that those purposes would be extremely difficult to achieve in their absence, give you the power to "reform" the schools/S.S. (or, same thing, put into practice the plans you've drawn up) and just hope that you (or your proposed radical reforms) wouldn't casually (if not quite intentionally) destroy them in the process? What have you done or said to reassure poeple that, if it turned out your reforms were damaging the public schools/S.S. without producing measurably superior educational/old age pension outcomes, you'd immediately disavow them and work to get us back to the old system?
No, but you probably would look around at other, more successful school systems, especially in other countries that are cleaning our clocks on test scores and consider emulating them. How many other countries use vouchers?
I'm not opposed to vouchers per se -- I think they should be tested in lots of districts nationwide to get a truly diverse sample data set -- but I also think it's a good idea to learn from what's been shown to work elsewhere.
Jasper: the whole empirical vs. moral argument being a right vs. left thing is laughable when you consider the Republican party is dominated by religious conservatives who make precisely the kind of arguments you claim only come from the left. That kind of crap happens on both sides, as do more empirical approaches. (Terri Schiavo, anyone?)
Jasper, it's trivially easy to think of instances where the opposite of your "rule" is true.
Isn't a weird talismanic belief in the virtues of the status quo the definition of conservatism?
True! That's what so weird about the debate. The nonconformists aren't.
The reason, I think, is that this issue is political, not ideological. If your political opponents want to change something you don't care much about, your natural response is to defend it as is.
Democrats propose gay marriage; Republicans counter with a marriage amendment. Republicans propose school choice; Democrats fetishize the virtues of Neanderthal High.
Do I really mean to say that Democrats don't care about public education? Actually ... yes. Statisically, en masse, liberals are less likely to have kids. If you don't have kids, its not your issue.
I guess my last question about what you've done doesn't really address the larger concern, about status quo defenders fearing reformers in large part of what reformers' ideological allies have advocated. I guess it's two parts:
1. what have you done to reassure us about your personal motives, given what you've written in the past (and the fact that you're in no hurry to get health insurance for the 44 million without it, so inequities don't seem to bother you much); and
2. do you recognize the problem that your more ambitious like-minded friends, who openly want the schools/S.S. destroyed and don't care if the replacement arrangements are significantly less egalitarian, pose for your prospects of acceptance? and, if you do, what can you do to convince the defenders that you really and truly wouldn't have anything to do with such a radical program?
" So why are they so hysterical about "destroying the system"?"
Did you pay attention to the Social Security debate after Bush's re-election? Where was the cpncern for the people served from those siding with the President?
Nope, not in the United States. In the United States the people who are referred to as “conservatives” are usually the ones who would be called “liberals” in most other periods of American history and in most other countries in the world.
Once again, we are dealing with tribal loyalties. Zeitlin's tribe identifies with the buerocratic welfare state so strongly that its apparatus is part of his tribe.
Megan's making an arguemnt that there are better way to accomplish the goals the appartatus was set up to serve, but there can be no change that does not threaten Zeitlin's tribe.
Meagn's arguing means and ends - Zeitlin's fighting for the survival of his tribal indentity - thus the hysteria.
Conservatism in America is a bit unusual. Hayek famously opined that America didn't have conservatives. But I think Russell Kirk and others would acknowledge that a default presumption in favor of the status quo (at least insofar as it incorporates traditions and customs of longstanding) is an element of conservatism.
What people would those be again – the comparatively wealthier retirees who already get back far more from Social Security than they ever paid in FICA (and would continue to do so) or the younger and comparatively poorer workers who are projected to get back three fourths of what they pay into the system and would be the ones most helped by the President’s proposal?
Maybe in a Poli Sci exam in college. In the real world, not so much.
Derek: I'm not opposed to vouchers per se -- I think they should be tested in lots of districts nationwide to get a truly diverse sample data set -- but I also think it's a good idea to learn from what's been shown to work elsewhere.
If you're interested, here are a few good places to start your research on that point:
http://www.ccsindia.org/ccsindia/pdf/corinna-paper.pdf (summary of international evidence)
http://www.marginalrevolution.com/marginalrevolution/2003/10/vouchers_in_chi.html (Colombia and Chile)
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=583710 (another paper on Columbia)
http://www.naringslivsforskning.se/Wfiles/wp/WP578.pdf (Sweden)
http://www1.worldbank.org/education/economicsed/finance/demand/case/denmark.pdf (Denmark)
I think it's true that the words "conservative" and "liberal" have, in America, largely been reduced to brand identifiers for the republican and democratic parties. But I guess I'm unwilling to concede that in that process they've completely lost their meaning as words independent of their role as brands.
"Megan's making an arguemnt that there are better way to accomplish the goals the appartatus was set up to serve, but there can be no change that does not threaten Zeitlin's tribe.
Meagn's arguing means and ends - Zeitlin's fighting for the survival of his tribal indentity - thus the hysteria."
Yeah man, you should come out for the drum circles and hit up the peace pipe some time. We also have casinos.
I don't think everyone arguing with you is suspicious of your motives, Megan. Arguments that vouchers will destroy public education are not inherently arguments that people who support vouchers want to destroy public education. I, for one, simply believe you are wrong, and not evil.
Even advocating that public education be entirely performed by private contractors is not an inherently objectionable position. It is, however, objectionable in practice. A significant portion of our populace want public education to bolster their locally favored religious views. Destroying public schools is part of their agenda. When your arguements coincide with theirs, your motives will become suspect. It's human nature.
A lot of the articles I read from the left simply assume that the school system, or the social security is worthy of defense.
I always think of Terry Pratchett in Small Gods, where he remarks that people start off beliveing in a god, and end up believing in his Church.
Once people believed in achieving [insert nice thing here]. Now they believe in the goverment structure and policies designed long ago to achieve that goal.
They are no longer interested in other, perhaps better, means of achieving the original goal.
As navigator, scruggs, and tiparillo all point out, the actually existing proposals for Social Security "reform" that have been fielded so far in the US have been shoddy pieces of work that would have failed to ensure elderly Americans against the risk of poverty, while making it likely that wealthy Americans would profit hugely and that poorer ones would carry more risk. They did, however, guarantee the transfer of enormous amounts of wealth to the financial industry. And they were being pushed by a cadre of GOP leaders who had become notorious for their dishonesty and flim-flam bookkeeping and for the consistency of their devotion to the interests of the top 0.1% of earners and their indifference to the interests of the bottom 90%.
Plenty of liberals would be curious about methods of reforming Social Security with a Democratic President and Congress, and with about 5 years to cool off from the corruption of the Bush administration. At the moment, anyone, and particular a libertarian or Republican, who mentions Social Security reform prompts a hand-me-my-shotgun response.
A common pattern, ad. That's why you'll hear people talk about "the Mideast peace process" as if it were actual Mideast peace.
They are no longer interested in other, perhaps better, means of achieving the original goal.
Often because the people who are proposing changes have already shown their hostility to the original goal. No one trusted the good faith of Bush on Social Security because he didn't have a track record that showed that he cared what happened. If the solution is identified first, why trust them when they start to describe the problem.
On a different hot button here: If the AFT tells us that all will be well in bad school districts if only more money went to teacher salary, I wouldn't buy it. That doesn't mean that it won't cost more money to get good outcomes in districts full of children who are poor, live in a home with a language other than English as the primary language, live in broken homes, or otherwise have problems, but I won't automatically believe that better teacher pay, by itself, is a solution, not when the teacher union is the one proposing it.
"There's an implication that conservatives have no reasons for this--just a wanton desire to destroy anything good, especially if it goes against their weird, talismanic belief in the markets.'
Conservatives have an easily understood and logical reason for wanting to destroy social security.
For several decades, the trust fund has supplemented the federal general fund. This has allowed the federal government to cut income taxes significantly. These tax cuts have benefited the wealthy. Income taxes are paid primarily by the rich; payroll taxes are paid by the middle class. In 2017 or so, the money will change directions. The general fund will need to pay into the trust fund money it has borrowed. Tax increases are almost inevitible, and will fall more heavily upon the rich. If they can kill social security, the rich will save some money.
That's all there is. The rich want to pay less and the middle class wants them to pay more. All the appeals to philosophies of government and markets is smoke. The rich don't have the votes to get their way, so they need a mechanism to pull in more. I don't blame the rich. Everybody likes money. Too bad for the rich that more people will benefit if the government lives up to its promises on social security than if it reneges.
Megan asks why her ideas are treated with such hostility when she writes about social security and many of the commentors here reply, more or less, "because Bush/republicans/conservatves is/are/were bad".
So one's identity makes ideas bad?
(I would shorten this to "we don't care about your ideas - you are in the bad tribe, the one that wants to destroy our tribe", but hey that's me.)
Last I checked Megan is not Bush and is not a republican or a conservative.
So why all the hostility to her ideas based on an identity she doesn't have?
For several decades, the trust fund has supplemented the federal general fund. This has allowed the federal government to cut income taxes significantly. These tax cuts have benefited the wealthy.
I think you mean that the borrowing from the social security trust fund has allowed government spending to grow exponentially, while holding taxes fairly constant. You are never going to convince a libertarian that the government deserves a certain level of tax revenue (full funding).
Derek -- scroll up for a comment that I left earlier but that just showed up. Thanks.
Perhaps, but she voted for Bush in 2004, and of course now she finds monarchy icky. Though many would argue Bush isn't (fiscally) conservative either, ISTR her biggest issue was Kerry's health plan.
Are there any good arguments for the current Social Security system? It's fundamentally can't work over time. Not everyone can get out more than they put in. Some generation (probably mine) is going to get screwed.
I guess to be fair, if you belong to the demographic that will get far more out than it ever put in that might not seem like a downside.
Megan, I'm with you on vouchers. I think they're an idea whose time has come (provided they are means test to avoid simply being a subsidy for the rich). But I must disagree with you about Social Security. The SSA's administrative costs are about 0.7% of benefits. There isn't any private pension fund that comes close to being as efficient. In fact, one of the reasons Bush's social security reform agenda went nowhere is precisely because they couldn't find a way to making it work without dramatically increasing administrative costs.
szr,
Schools are funded primarily by property taxes; those who own more valuable properties (presumably the "rich") pay more in taxes to support schools.
If we assume that the average government school cost per pupil is $10,000 and all pupils are offered a $7,000 voucher, how is that voucher a subsidy for the "rich" when offered to a "rich" pupil?
I'm wise to your game, Megan. You've hit upon a sneaky way to make liberals understand how libertarians feel when someone suggests monkeying with the market, haven't you?
SG, as I understand it, depending on economic growth rates, the Social Security system may start facing some serious problems in either about 30 or about 70 years, or not.
Call me in 10 years on this issue. Medicare, on the other hand, is a serious problem.
Mindles: there is nothing wrong with an ad hominem attack against terrible people. The Bush administration is riddled with corruption, scornful of the law, and slavishly devoted to the financial interests of the very richest people in America, at the expense of average Americans.
Democrats fully expect to control both the White House and Congress in little more than a year. What stops them from speculating now about what they'll do then, just as they've been doing about health care? All I've heard about SS is a bunch of what Brooks tacitly admits are lies about how it doesn't need reform at all.
Brooksfoe: You're right, it is getting hard to tell the Bushies from Democrats.
Hi Ed Reid: Good question!
In the places where vouchers have been implemented, like Milwaukee, the problem was the generally horrible conditions of the public schools. Rich people sent their kids to private schools anyway, or moved out of the city to an affluent suburb with high property taxes and an excellent school system. The poor in Milwaukee were largely stuck with miserable public schools.
A voucher that wasn't means-tested there would have been largely a subsidy for the rich who were sending their children to private schools in Milwaukee anyway. It is true it wouldn't impact people who moved out to the suburbs, but Milwaukee's school system only controls the Milwaukee school system. And so, means testing those vouchers makes a lot of sense.
I'm all for education options for the poor so they're not stuck in crappy schools. I'm not in favor of a program that isn't means tested because then it becomes, in large part, a transfer of public money to affluent citizens with children who want to live in the city.
szr,
There is no such thing as "public money".
The school taxes being paid by the "rich" in Milwaukee who are also sending their children to private schools are, in total, a subsidy by those "rich" to the "non-rich" in Milwaukee who are sending their children to government schools.
The fact that conditions in the government schools are horrible is not a reason, is not even a tolerable excuse, to continue forcing children to use them. I have to question, however, whether the problem is the condition of the buildings, or the conditions in the classrooms resulting from a lack of discipline and the "mainstreaming" of students who should be receiving "special ed".
Those who suffer most are the bright and motivated children of non-rich parents who are denied the opportunity to learn up to their full potential. We are already paying a horrible price for our failure to educate these children properly; and, that price is increasing daily.
Ed:
Let's first focus on our areas of agreement (since I suspect we're actually pretty close on this issue). We both are committed to public education - and by this I don't mean public schools specificly, but the social goal that all children in this country deserve a quality education no matter what their family's financial situation.
We also both believe that this commitment to education means that the children of poor families should have some mechanism via which to be assured they are recieving a quality education. The most common model, a public school system largely funded locally, has seriously broken down in some places (like Milwaukee), even if it is enormously successful in other parts of the country.
We also both agree that vouchers are one way to give children of poor families in such a broken school system a way out. Why not give them the resources to attend a private school?
I think where we disagree is whether this should be a blanket voucher program that gives the same amount of resources to children from poor families as children from more affluent families. If I understand you correctly, you think it should be the same, regardless of the family's financial conditions, and I'm arguing that it should be means-tested (likely on a scale - e.g., those making less than $20,000 would get a voucher for $10,000 per child per year; those making 20k to 40k a less generous voucher; etc, until we reach say $100k, at which point they don't get a voucher.).
My reasons for wanting a means-tested voucher are as follows:
(1) Resource requirements make a bigger difference to the poorer families. A child from a family living in poverty is more resource constrained on getting a quality education than a child from a more wealthy family
(2) At least one policy goal of our educational system is to expand opportunity, and it has limited resources. So the expanded opportunties offered children from poor families to attend a private school is very large; while it is unlikely to expand the opportunities of children from wealthy families, who even in the absence of a voucher program, would be sending thier children to a private school. So in terms of maximizing opportunity per pupil, you get way more bang for you buck from giving it to students from poor families.
(3) A public education system has to be agreed-to as fair among the entire local community. The chances of achieving a voucher program at all drop if the less affluent members preceive the motives for reform as being largely driven by personal economic motives of those who already send their children to private schools. I'm not saying that is their actual motivation, but if that is the preceived motivation, reform becomes more difficult to implement, and we're stuck in the same problem as now (children of poor families are forced into crappy schools; children from more wealthy families still attend private schools).
According to the 2007 SSA report:
"The financial condition of the Social Security and Medicare programs remains problematic; we believe their currently projected long run growth rates are not sustainable under current financing arrangements. [...] Projected OASDI tax income will begin to fall short of outlays in 2017"
2017...that's only 10 years off, which is a lot closer than your projection of 30 or 70 years.
Not to say that your 30 year projection of difficulties fills me with glee, as that's when I'm scheduled to start collecting. But even if it's 70 years, somebody's still going to get screwed.
At it's core, SS is effectively a Ponzi scheme. It would be illegal to run an SS-type system privately, why is it good when the government does it? It doesn't matter how you tweak the formula, at some point there won't be enough new money coming in to pay out the promised benefits. Can you explain why this is a good thing?
SG - I think you're wrong to call the 2017 date a problem. The whole point of the Greenspan commission (appointed by that pinko commie President Reagan) was the build up a trust fund in order to deal with the boomers retiring.
Well, the trust fund has been built up for the boomers who are starting to retire. The fact that outlays don't balance out with payroll tax intakes isn't a problem. SSA will cover the gap by cashing in assets from the trust fund.
The trust fund is expected to be exhausted by 2042 assuming an economic growth rate of 1.7% (well below the historic average), which is why people think it is more likely that, in its current form, it will last 70 years.
That doesn't sound like much of a crisis to me.
Slight correction to the above - the trust fund is expected to be exhausted by 2041, not 2042.
"The SSA's administrative costs are about 0.7% of benefits. There isn't any private pension fund that comes close to being as efficient."
This is versus a private system which would return around 10%, not cost the pensioner. CLEARLY a much better solution.
That being said, the potential medicare problem is much bigger, and we don't even have an accounting gimmick to wave in its face.
szr,
We do agree on a lot. We agree on "public education" vs. "government schools". We do disagree on vouchers.
If a "rich" person sends his or her child to a government school, the existing school system spends the same number of dollars educating that child as it does educating a child of "poor" parents. I fail to understand why, if the community is willing to spend the same amount on all children in the government schools, it would not be willing to spend the same amount to educate them in private schools.
szr, I'm unsure if the following comment was meant ironically:
But on the assumption you weren't being ironic...Those trust fund "assets" that you refer to are non-transferable Treasury Bonds, i.e., the government owes the money to itself. When it comes time to cash in those "assets", the government can a) raise taxes, b) cut spending or c) borrow money in order to produce the funds.
These are exactly the same choices and at the same magnitude as if the trust fund didn't exist. Functionally the trust fund is nonexistent. In 2017 the hard choices start and it only gets worse from that point on.
I read the link, and it suffers from a fundamental contradiction. If we accept the premise that the SSA trust fund is an accounting gimmick, there is no SSA crisis at all. Why, you ask? Because SSA becomes just another government program, and who really cares if it doesn't take in enough money via a dedicated tax as it pays out? Lots of government programs fall into that category (like, say, Defense, or National Parks).
In other words, the fact that SSA will pay out more money than the payroll tax brings in just doesn't matter any more than the National Parks cost more to run than the admissions fees bring in.
I would say also if you accept the premise that SSA trust fund doesn't exist, then you're essentially saying that Reagan and Greenspan conspired together to pull off the a huge tax increase on the working poor and middle class. The highly regressive payroll tax was created precisely to build up the trust fund. So are you saying is that Greenspan conned the working poor and middle class into paying billions of dollars every year for no reason other than so taxes of the wealthy could be lowered?
szr,
I'm obviously confused.
The SS dis-"trust fund" pre-existed Reagan and Greenspan, as did the Medicare dis-"trust fund". Both are "creations" of Democrat presidents and Democrat controlled Congresses. I understand that Reagan and Greenspan recognized that the payroll tax was insufficient to fund the system on an actuarial basis and worked to raise the payroll tax to correct that perceived problem.
Also, how did the Reagan/Greenspan period increase in the payroll tax lower the taxes of the wealthy.
szr:
You got it. It doesn't matter that SSA pays out more money than it takes in payroll taxes, except for the fact that the additional money required has to come from somewhere. That is where the problem comes from. The crisis does not necessarily occur in SS, but SS precipitates it.
BTW, there's a couple of other options than the three I listed above. The government could also cut benefits or inflate the currency.
Still, none of them seem like good options. Or do you want some combination of higher taxes, increased borrowing, cuts in other programs, cuts in SS benefits and higher inflation? Those are the only choices I can see.
BTW, it's a mistake to lay this solely at Reagan & Greenspan's feet. The '83 "reform" was definitely a bipartisan consensus. But if it makes you happier to blame the evil Republicans, go ahead. I still blame FDR for introducing this insane Ponzi scheme in the first place. I also blame current Democrats for bitterly resisting any attempts to address the problem while failing to present any alternatives of their own. The current system will fall eventually, it's only a question of who it's going to fall on.
Ed: the reason I say it was a tax shift from the wealthy to the poor and middle class is that the payroll tax (which is regressive) went up substantially in 83; and the income and capital gains taxes (which are progressive) went down in subsequent years. So if social security is just a government program no different than defense, enacting the Greenspan commission recommendations (of higher regressive taxes) and using the the money from that tax to give tax cuts to the wealthy (by lowering the progressive tax cuts) amounts to seriously increasing the tax burden on the working poor and middle class on false pretenses, and using the additional revenue to reduce taxes that primarily impact the wealthy. I guess that's okay if that is your policy goal, but it would be an unbelievably dishonest way to achieve it.
If, on the other hand, we take seriously the idea that Greenspan and Reagan really were securing the future of social security (which I do), then the fact that politicians in both parties were unwise with the general revenues shouldn't be an argument for screwing retirees and disabled persons out of their checks, it should be an argument against the kind of crap that is going on in the general revenue side of things. Like the war in Iraq; unfunded tax cuts; a prescription drug benefit; and SCHIP. Will this happen? Probably not. The bipartisan consensus that emerged in the late 90s for balanced budget and debt reduction (sometimes, perhaps unfairly to Republicans, called "Rubinomics") has largely disappeared and I blame President Bush and his Republican enablers for this. They were all for fiscal discipline until Bush was in office, and then suddenly discovered how much fun it is to spend money and never looked back.
Worse still, the latest Democratic budget doesn't go back to Rubinomics, as I'd hoped, but goes WAY back to the 80s Congress.
And so I'll say it again - the Presidential candidate who publicly endorses Rubinomics and a return to fiscal sanity will be the winner of the prestigious szr primary.
On the first point, yes. The main difference being that SS' deficits right now are actuarial - they haven't been paid out to beneficiaries in cash, but there is the need for a $6 trillion reserve (and $30 for medicare).
I'd say you are not completely wrong about holding people responsible. Taking in more revenues gave the government the potential to create an actual reserve, along the lines of what we ask the private sector to do. The problem is we borrowed the money from SSA and spent it, which is the doing of many generations of politicians from both sides of the aisle.
One might also blame the designers of these systems, and all successors, for the horrible design of these systems which function mechanically like Ponzi schemes.
As for who gets ripped off - well, that still remains to be seen, we haven't paid these liabilities yet, so we haven't yet taken the money. The real injured party is whoever repays the looming debt from these systems. So, taxpayers and general holders of dollars, to be sure, as it will be done through some combination of taxes and inflation. But which taxpayers?
The only thing that's certain is it won't be the ones who are dead when the bill comes.
brooksfoe wrote: Mindles: there is nothing wrong with an ad hominem attack against terrible people. The Bush administration is riddled with corruption, scornful of the law, and slavishly devoted to the financial interests of the very richest people in America, at the expense of average Americans.
Literary Sudoku, or a MadLibs session gone wild? Whatever it is, you've got to share your wisdom. This copy of Partisanship for Dummies isn't doing the trick anymore, and I'm ready for a next-level instructor!
On means testing: The problem with means testing is that programs for the poor become poor programs. There is no such thing as “charity;” there is only self-interest masquerading as charity. Because the poor lack the political power to defend their own self-interest, no anti-poverty program can endure until it finds a powerful patron.
Query: How much does HHS spend on food stamps each year? Answer: nothing. Food stamps is not a HHS anti-poverty program; it’s a agriculture program, run out of the Ag Department, masquerading as an anti-poverty program. Ag interests have kept that program going throughout the decades. But when the Ag Department’s budget was getting squeezed, what was the first thing they looked to cut? Sugar subsidies, maybe? Of course not; those subsidies have even more powerful defenders. You know the answer: food stamps.
What keeps an anti-poverty program like Social Security from getting axed during budget wars? It has a powerful patron: the voting public. But if you means test Social Security (or any other program), must voters will recognize that they no longer have a self-interest in supporting the program, and it will be led to the slaughter house.
Does this mean that some amount of Social Security dollars are “wasted” on people who don’t really need them? Yup. But that’s no different than any other big anti-poverty program.
Like so many libertarian ideas, means testing is a great in theory. But given libertarians' appreciation for markets and the power of incentives, I'd think they'd be able to understand how policy works in Washington (and elsewhere). If you want to design a program that helps the poor, you're going to have to plan to pay "protection money" to a powerful political interest. The trick is to maximize efficiency: not to eliminate the protection money, but to reduce it to just enough to ensure political protection.
Evaluated from a realistic standard, Social Security has proven to be one of the most powerful anti-poverty programs ever devised.
Zrimsek, if the defense budget continues to grow at the current rate, it will swallow 100% of GNP within 30 years. Do we need defense budget reform? I'd say yes, but not for that reason; obviously, we will halt the growth of defense expenditures when it becomes necessary to do so. The liberal consensus on Social Security is that we will change it when changing it becomes necessary, not 70 years ahead of time when it's not clear whether changing it is necessary.
The "trust fund does not exist" argument has an obvious corollary: if you think of things this way, benefits will simply be paid out of taxes, so the immediate priority is to massively reduce the deficit to slow the growth in future interest payments on the debt and thus ensure Social Security commitments can be met without an abrupt hike in tax rates. The most efficient way to reduce the deficit would be to greatly increase taxes on the rich, who have most of the income, and can afford the taxes. The argument that we need to be paying down the national debt because of upcoming liabilities has been a Democratic argument since 1992. Clinton raised taxes to pay down the debt for this reason. Bush claimed in 1999 that there was no need to continue paying down the debt, that we could take the money in tax cuts right now and spend it -- and Greenspan helped him claim that the risk of budget surpluses was a positive danger to the economy.
If taxes have to be raised in 15 years to pay for Social Security, there will be 2 ways to explain it. The first is that we failed to treat the Trust Fund as real: we calculated budget deficits without removing SS payroll taxes, allowing ourselves to believe we were running merely large deficits when we were actually running spectacularly huge ones. The second would be that the Trust Fund was never real, in which case we should have simply been paying down the debt in the expectation of future entitlement liabilities. In either case, the culprit is clear: the Bush tax cuts of 1999, which killed our last chance to get the Baby Boomers to pay into the Trust Fund, or pay down the debt, before they retired.
Obviously, I mean the tax cuts of 2001, proposed in 1999.
Megan... why don't you just run for public office and be the next Bobby Jindal? (Isn't he a libertarian?) You can be the girl mayor of Washington, DC or something.
I don't subscribe to your politics, but I think you'd make for a great, refreshing voice in the marketplace of public policy.
Just don't turn it into a career. Serve a couple of terms and then bail.
The arguments above about who destroyed the trust fund are a great example of why we need private accounts. Individuals would have the power to protect their portion, while the actual general fund deficit would be more visible and not hidden behind the "unified budget" calculations.
Again, remind me of the reason why it is better to have the government squander the entire trust fund than give individuals the power to protect their share?
Why not have private Soc. Security accounts?
1. Higher transaction costs.
2. Moral hazards. If people invest in risky things and win, they keep the winnings; if people invest in risky things and go broke, government is left with the problem of providing for them. Yes, libertarians would propose to solve this problem by simply letting such people starve, but experience suggests that – for better or worse – the US population is not willing to do this.
3. Eliminates sources of funds for other, non-retirement aspects of Soc. Security, especially disability insurance. This is just one of the many reasons why we can’t make simple comparisons between returns on Soc. Security and returns on other retirement accounts.
Yes, the US has used the Soc. Security trust fund to finance government operations for years – that is, the US has used the trust fund as a substitute for higher taxes. So if we wanted to put Soc. Security revenues into a trust fund that could not be appropriated for government spending, then we would need HIGHER TAXES. A vote for private accounts is, all else being equal, a vote for higher taxes.
There is no Magical Fiscal Fairy handing out free lunches: The money put into private Soc. Security accounts, and presumably stimulating economic growth, would be more than offset by the money removed from the economy through higher taxes to offset the deficit created through the elimination of the Soc. Security trust fund. I say “more than offset” to reflect the fact that private accounts would have higher transaction costs than the current system. The only industry that would be guaranteed to see growth would be the financial services industry.
Would this be good policy anyway? It would tend to replace the regressive FICA tax with the progressive income tax. And it would tend the make government more transparent. Whether these benefits would offset the costs, I can’t say.
Apparently because it allows people to ride their favorite partisan hobby horses (see brooksfoe above: "In either case, the culprit is clear: the Bush tax cuts of 1999"), apparently forgetting that politicians of both parties have abused the trust fund. Or that the only reason Clinton ran surpluses is because he was spending the SS trust fund.
(None of that should be read as defense of the federal government spending under the Republicans, only as a reminder that neither party has clean hands.)
The current SS system is fundamentally and fatally flawed. It's a chain letter: send 12.4% of your income to the government and they'll put your name on a list. The people currently at the top of the list will get your money, but in 40 years your name will move to the top and the government will send you money. There's no investment of the funds, no growth, you have no property rights associated with your contribution, and eventually demographics must turn against you. I don't know why anyone defends this system. The goals of the system, sure, but not this implementation.
Forgive me if I suggest that this itself implies a weird, talismanic belief in the superiority of the status quo. A lot of the articles I read from the left simply assume that the school system, or the social security is worthy of defense.
You're exchanging one talismanic belief for another...namley the belief that you (or some think tank) has infinite knowledge and can work out all the consquences of a new proposal. Hence policy is just a matter of comparing powerpoint bullet points to see which is better.
But if you don't hold that weird talismanic belief then the superiority of the status quo becomes apparant. You don't have to figure out the consquences of the status quo because you already know what life is like right now. Since your projection of what life would be like if policy X is introduced is not guaranteed to be correct, you insist on a higher standard of evidence for a proposed change than if you were trying to just come up with a policy in a vacuum.
This is actually a conservative position; the status quo needs to be assumed innocent until proven guilty while the new policy is presumed guilty until proven innocent!
1. Conservatives tend to believe that when it comes to society, if it isn't broken don't fix it. Progress isn't inevitable because not all changes end up improving over what existed before.
2. What works in terms of education in other countries may not necessarily translate to here because of cultural differences.
3. Why shouldn't we want to destroy Social Security over the long term? It is funded by an extremely regressive tax and the retirement benefit can be achieved simply by requiring people to set up and contribute to 401k's. That way, instead of getting a 2% return on their money and losing the capital they can get a higher return and keep the capital. Sure, people currently in the system deserve to get the money they are depending on from SS but we can stop enrolling new people. Shortfalls would be covered from the general budget.
4. Medicare was a really bad idea and is a significant factor in both the rapid increase of health care costs over the last several decades and the looming problem of Social Security insolvency. Thus it should be abolished.
5. Other things currently funded through payroll taxes should be switched to other funding sources, preferably tariffs.