Tuesday, January 18, 2005

Social Security: Viking Pundit has been Johnny on the spot lately on what passes for policy discussion in Washington. Here he is parsing Rahm Emmanuel, whom the Dems sent forward to spin on the subject this weekend.

My take on this is pretty simple, and it might surprise you. The GOP says, let's do private accounts. I'm for it, but the tiny amounts they're proposing to "privatize" are insulting. Meanwhile the Dems say that any privatization will result in unfunded mandates (which we have anyway, but I see their point) so we should, at the most, go for a typically Washingtonian and meaningless "reform" package based on accounting sleight of hand, maybe with a split-the-difference adjustment to the cost of living increase.

As I said, this may surprise you, coming from a libertarianish conservative, but what we need to do is raise taxes. Raise the payroll tax by a point. Raise the level at which payroll taxes cut out, too. (With an automatic sunset provision, by the way -- something that should be standard in every spending bill.) But -- and it's a big but -- raise payroll taxes only in conjunction with real reform. By which I mean the increase would pay for significant privatization. Second, we've gone long enough without means testing benefits like Medicare and Social Security. Remember all the rich and famous waterheads during the election who thought it was politically astute to say, "George Bush gave me a tax cut. I don't need a tax cut!" Well, why the hell aren't they saying, "Congress gave me generous Social Security and Medicare benefits. I don't need those!"

I'm not deaf to the several good points being made on the left -- and there are several, even if they're not being made very often. So I'll put my money where my mouth is: Raise my taxes. I'm unlikely to see benefits from Social Security, and I'm a little old for microscopic privatization measures to make any difference, really. So as long as I'm eating Tender Vittles in my golden years, I might as well advocate the idea that I be the last one to do so. While my desire would be to kill the program entirely, I know that's not going to happen. As long as it exists, it should, to the greatest extent possible, exist as a choice. The only road to that is to stop lying about how we fund entitlements.

Pay for it honestly, or kill it.

1 comment:

Razor said...

I think it was Volokh who did a great piece a while back on the fallacies holding up Social Security as we know it (I can't find the link presently). What he did was not riducule either the Left or the Right, but show that the things we think S.S. stands for, aren't really what it stands for. And how privatization doesn't actually undermine the purpose of S.S.

Okay, that was vague. The point was that S.S. is really not an annuity. What you pay now doesn't sit around for you to spend later - it goes to pay current benefits (or, more realistically, to pay other parts of the government backed by a don't-you-worry-rock-solid IOU). You don't get to spend your money; only the money of those younger than you.

In that light, privatization makes perfect sense. It's your money all along; and barring a complete collapse of all mutual funds, it will never disappear [whatever happens, the gubinment will never let you put that $$ in junk bonds, for instance], and you'll at least go into the future knowing you'll get something out of the deal.

Of course, then the ol' Treasury has to find a way to replace that pool of money it once used to balance the books *Cough* tax hike *cough*.