To: "homestead AT lists.ibiblio.org" <homestead AT lists.ibiblio.org>
Subject: [Homestead] Social Security 2005
Date: Mon, 20 Dec 2004 09:49:24 -0700
William F. Buckley is one of my favorite writers. I find him refreshingly
and independently intelligent and original in his thinking. Here he offers
his perspective on the buzz topic of the day, social security reform:
December 17, 2004, 1:30 p.m.
Penetrating Social Security
William F. Buckley
Another theatrical setting for the ideological dispute.
It becomes clearer, day by day, that the talk about reforming Social
Security is an ideological debate. The New York Timess summary on December
17 is useful: Away from the conference [called by President Bush during
the week], some opponents of Mr. Bushs approach, mostly liberals who want
to preserve the current Social Security program, said in interviews that
the administration was exaggerating the scale of the problem to create an
air of crisis that justified radical but unnecessary changes like creating
private investment accounts.
The federal Social Security program was the crowning intervention of the
New Deal. It has always depended heavily on illusions. The first of these
was that money paid in to Social Security was actually being sequestered
someplace, subject to convenient materialization when contributors reached
senior age. A second illusion was that the program was designed for those
who would otherwise be in need. A third illusion was that money paid out
would correspond in some way with money paid in, and that the age at which
payments would be activated would coincide in some way with the age at
which physical decrepitude set in.
What happened, of course, is that Social Security became a general welfare
program. Year after year, politicians proclaimed it untouchable. In fact it
has been modified over a dozen times.
What the current fight does is give us another theatrical setting for the
ideological dispute. Begin at right-wing position A: There shouldnt be a
federal Social Security program. People should look after their own needs,
making arrangements with family, with employers, and with private insurance
companies.
Left wing position Z: Americans who reach a certain age should not be
concerned about income. Ours is a welfare society, and what welfare is
better earned, or more keenly needed, than old age assistance? So . . . pay
out the money when people reach a certain age and stop squawking.
Conservative critics pursue their long war of attrition. It begins with the
question: When should a recipient be entitled to receive money?
On this point the conservatives can hold the floor triumphant without any
problem, because history unmistakably affirms that it was contemplated by
the framers of the program that payments should begin at about the age at
which Americans begin to die, which Americans used to do in their early and
mid-sixties.
What came, of course, was longevity, ironic in that it brought not only the
happy prospect of longer lives, but also the unhappy prospect of hugely
increased medical expenses to make that life possible and, tangentially,
pleasant.
Here the liberals won the battle decisively payments would not correspond
with health. True, by the year 2027, Americans will start receiving
payments only on reaching age 67. But if the spirit of the whole
arrangement were faithfully exercised, payments would not begin until
approximately age 73. The fiscal problem would not evaporate, but it would
have been hugely diminished.
The assumption that moneys paid in would be put away was quickly
overwhelmed by reality. The government proceeded to spend Social Security
contributions, and acknowledged an obligation to replace them with cash as
individual subscribers reached payout time.
An opening for the conservatives: You have all this money accumulating in a
Social Security account. Never mind that its there not in gold bars but in
government I.O.U.s, why not let subscribers specify how some of these
reserves should be invested? That way two things are accomplished: You give
the subscriber a shot at a larger return (funds invested at private
discretion historically outperform government bonds), and you detach from
the Social Security fund a hunk of money now available to augment the
capital pool, thus yielding more employment, and a higher rate of economic
growth.
Opponents make the entirely plausible point: If you subtract, say, a
trillion dollars from the I.O.U. fund, youre going to have to come up with
the money to pay obligations in place. If, for example, Veterans Hospitals
are going to cost $250 million, which in the past had been generated by
Social Security payments, where are you going to go when those funds are
forfeit to the new system?
Taxation! the liberals say.
The conservatives respond: None of your business. Its the peoples money.
Dont act as if it were yours!
The objective of Mr. Bush is admirable. The complaints of the liberals are
real. We are dealing with a structure composed of lights and shadows, but a
structure which, within the next 38 years, has to come to terms with real
people, real money, resourceful politicians.