Wednesday, December 28, 2005

A Glimpse of the Social Security Debate to Come?

Everybody knows that the Democrats are eventually going to have to take a position on fixing Social Security. The whole fingers in the ears, lalalala its not broken we can't hear you act is so paper thin that even Democrats have trouble sticking with it. When the boomers retire and the largest slice of the public expenditures pie starts flowing directly into their pockets, I think its possible that there may be some kind of an impact on a proverbial fan somewhere. At or slightly before this time, the D's are gonna have to take a position. But what will it be?

Robert Samuelson of the Washington Post (bias beware!) has written a piece for RealClearPolitics in which he attempts to lay out a "moral" conflict at the root of the social security problem, and proper solution. Frankly, I was surprised to see this on the RCP site because I expect that Robert's position and justification will be the one adopted by the Dems whenever they get around to taking a position. Here is the meat of it, starting with the premise of "if we invented social security today":

People live longer, are healthier and have less grueling jobs. They can work longer and receive benefits later. We'd set higher eligibility ages. It's too expensive for government -- meaning taxpayers -- to support them for 20 or 30 years. We'd concentrate aid on the neediest and the oldest, including people whose longevity exhausted their savings. We'd regard this as a moral obligation of a decent society.

Well, if that's what present conditions suggest, why do we tolerate a system that automatically pays many people who are well off and in good health? The answer is that people who have been promised Social Security and Medicare benefits believe they have a moral claim to receive them, even if -- absent the promise -- their claim would be dubious. True, people need to plan their futures. But the moral logic also rationalizes self-interest and selfishness. The compromise is to unwind gradually those promises that no longer make sense and are ultimately unworkable.

Until we challenge this moral logic -- the crux of entitlement politics -- public opinion will resist change and our paralysis will continue. Meanwhile our resulting inaction compounds many future dangers of an aging society: higher taxes, slower economic growth, squeezed government spending for non-elderly programs and more conflict between younger taxpayers and older beneficiaries.

Reading that again, I am now flabbergasted that it was published on RCP - what I think of as a conservative leaning site. "Rationalizes self interest"??? As if self interest is somehow irrational, or immoral? Or somehow not the engine of global human progress and also a pretty good strategy for personal well being?? Well, Robert, allow me to retort:

The only moral obligation in question is that over many years, the government forcibly took money away from people and promised to give it back later. The morally correct solution is to give the money back.

Since this national ponzi scheme is so incredibly flawed, however, it faces a crisis point in the not too distant future. If we keep the moral obligation, then the economy may collapse. There is the conflict.

A moral solution devised by an upstanding and brave politician might be to reneg on the promise, but in so doing also scrap the program. Bush had it right with private accounts - if you are going to forcibly take money from people for their own retirement, it is somewhat better to allow them to control it. That also protects the money from being spent elsewhere. But this of course doesn't solve the short term problem, only the long term problem. The short term problem can only be solved by benefit cuts (i.e. breaking the promise) but breaking the promise because the system is fundamentally unsound DEMANDS that the system ALSO be fixed in the process. Private accounts are the fix.

Samuelson sees it differently, of course. The real moral obligation - the moral trump card, if you will, is - you guessed it - Need. Straight out the communist manifesto, Need creates a moral justification for taking. Its always the same with these socialists, these progressives, these robin hoods, these democrats: Big Government is here to fill your Need. That's why I think this is the position that the Dems will adopt.

Since they are going to play dumb for, oh, I dunno, probably another decade or so, that gives us conservatives and libertarians lots of time to formulate and hone our strategies, engage in vigorous debates, and really get it right. The one thing we can't possibly afford to do is to buy into the Need-based entitlement paradigm.


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