Sunday, May 08, 2005

How Not to Fix Social Security

On reading Mickey Kaus's post, "Let's Not Save Social Security," I had the following reactions to his nine points:

1. There's nothing inherently wrong with having a "universal" Social Security program that pays benefits to rich and poor. Yes there is, because Social Security itself is inherently wrong.

2.The only problem with this system is we can't afford it! We can "afford" it in the sense that we can impose ever-larger taxes on workers. But why should we do that when privatization would eventually remove the burden from workers?

3. We should be sticking it to today's recipients! Well, yes, if you think it's all right to renege on promises made, however rash those promises were.

4. Bush's proposed plan isn't quite 'means-testing'. So what? Means-testing may appeal to quasi-hardboiled socialists, but it's just a symptom of an essentially corrupt system.

5. Democrats would fiddle with the benefit schedules too! You bet they would. But why should they be given the chance to do so? Let's privatize Social Security before Democrats regain power.

6. Indeed, the Democrats' solvency plans are grimmer than you'd think. Any "solvency" plan that tries to preserve the essential character of Social Security -- a transfer-payment Ponzi scheme -- is bound to be grim. (See #2.)

7. We could radically cut the cost of Social Security. If complete privatization is out of the question, politically, the best way to cut the cost of Social Security is to make it a "safety net" for the truly poor.

8. Even a radical means test wouldn't turn Social Security into welfare. Any scheme that takes from the "rich" and gives to the "poor" is a form of welfare.

9. Do we really want to save Social Security now? Absolutely not! What we want to do is phase it out, as quickly as possible, in favor of a scheme that enables workers to make real investments in growth-producing stocks and bonds.