Talking Points Memo: by Joshua Micah Marshall

Social Security:

Monomaniac Joshua Micah Marshall has turned his laser-beam focus on the issue of Social Security reform. Well, actually, he's turned his focus on the issue of putting a stop to any attempt to have Social Security reform.

This is not surprising. Social Security is the strongest bastion of socialism in America. With Welfare reform having taken place, it is the one program left to satisfy someone whose political preferences run toward European-style "social democracy." If you lose this ground, you lose it all.

It happens that Grim is an enemy of the whole "social democratic" program. Aristotle notes that 'a proper upbringing' is necessary to having the correct understanding of arete, a word that encompasses both "excellence" and "virtue" in the modern English. Social democracy, because it redirects responsibility and power from the individual to the state, produces the exact opposite of a proper upbringing. It produces a set of expectations about how the world should work that undermines the qualities necessary in a free man.

This objection stands regardless of the practicality of the program -- it is an objection to a welfare system that works, as much as to a welfare system that is broken. Arguing that the program works well doesn't change the fact that what it does so very well is ultimately unhealthy.

However, this philosophy does have exceptions at the margins, and Social Security happens to occupy one. Programs to care for the aged offer little threat to the character of the nation or her citizens, as the character of a man of sixty-five is largely formed. We've observed that there is still some threat in this regard ("Where'd you get all the money?" "The government. I didn't earn it, I don't need it, but if they miss one payment, I raise hell!"). Still, if that is taken into account and adjustments are made to lessen the effect, this is a place where some government involvement can do more good than harm. Social Security reform could be meaningful simply by instituting a strict means test. Only the truly poor elderly would get money, in the medium future; in the near future, we would have a declining scope of payments, so that those who have been relying on Social Security would not be let down.

The needy elderly can thereby be cared for, but the percentage who rely in some fashion on Social Security will be low enough that it won't produce a large faction prepared to vote itself largess from the public treasury, as Sir Alexander Fraser Tyler warned us at the outset of this adventure. Expenditures for caring only for the needy will be far lower than current expenditures, which are outrageously high because the program is structured to make Social Security the "right" of all Americans.

The alternative route -- private accounts, so that "social security" money becomes instead privately owned assets -- is also satisfactory. It addresses the needs of the elderly, prevents the voting of largess from the public treasury, and preserves the principle of individual responsibility and power. It doesn't do it as well as simply leaving the money in the hands of the people to start with, naturally, but it seems a reasonable compromise position. As with any compromise, neither side is really satisfied. The democratic socalist will find the whole thing less satisfactory than guaranteed payments from the treasury; the individualist will find the paperwork and hassle of working with the government to manage his account frustrating, and wonder why he can't just please manage his own money without interference. Those of us who feel that society has a duty to care for the elderly will be satisfied, though, regardless of whether we feel the government should be the agency fulfilling society's responsibility.

All that said, there is one part of this discussion that I find astonishing. The debate seems to be focusing itself on defining the precise moment at which Social Security becomes insolvent. Advocates of the maximum position say that it won't be for decades; advocates of the minimum say that, in just five years, the program will stop producing more revenue than it expends, and it's all downhill from there. This is a cynical way to argue, on both sides.

The minimal position is correct to say that the "watershed moment" is nearby, and that this will require certain measures to be taken by, say, 2042. The longer we wait, the sterner the measures have to be. But words like "crisis" derail the whole point of this argument, which is that we don't have to have a crisis if we address the situation now.

The maximum position wants to make only half of that last argument: 'we don't have to have a crisis.' That is not true unless we undertake reform in the near future. You can't have only half the argument.

It is no good to argue that a crisis is "decades away" when you are talking about a retirement plan. Those are meant to be planned decades in advance. Informing someone of the age of twenty that there won't be a crisis until they are at least 62 years old is not encouraging. That's just when they are going to need to avoid a crisis.

Pushing the crisis date back a few years, if it can be done at that point, really only makes things worse. For a thirty year old today, hearing that the money may run out when you're 72 should be alarming. That will be when you're good and retired and have no real option of returning to work should the money run out. Hearing that it may not happen until you are 75 is not very comforting; indeed, the only comfort to be derived from this argument is the hope that you might manage to die before the crisis arrives.