Social Security and “Moral Values”

by Will Wilkinson on January 14, 2005

I really liked this Jonathan Rauch piece in National Journal. His conclusion:

The 2004 exit polls suggested, to many conservatives, that “moral values” won the election for Bush. It may seem odd, then, that his boldest post-election priority is not abortion or gay marriage or schools, but Social Security. The key to the paradox is that Social Security reform is not, at bottom, an economic issue with moral overtones. It is a moral issue with economic overtones.

That’s right. I’m planning to write a couple longish essays on the moral dimensions of Social Security reform, which I think are far more significant than the immediate economic dimensions.

The strategy of the left is to try to spike reform on the model of the right’s demolition of Hillarycare. The big difference, as far as I can see, is that Hillarycare was popular at the outset, but not because it struck the ordinary Joe as some kind of moral advance, but because it seemed like free stuff. The anti-nationalization coalition I think effectively destroyed that idea that anyone would really get a good deal from it, and, perhaps more importantly, plucked several resonant American moral notes about independence, autonomy, and choice.

It seems that the pro-reform coalition in the present case faces broad skepticism about changing social security. However, other than scare tactics about market Russian roulette, the only moral arrow in the quiver of the left is a dull social democratic conservatism about preserving a moribund social insurance scheme. The case depends implicitly on the rather bizarre and unmotivated notion that taking care of each other means offloading responsibility onto the political class. I don’t think this tune really sings in the heart of Americans, no matter how “populist” the arrangement. The “save the New Deal” trope lost its luster long ago. So I don’t know how well it will fly. The best thing anti-reformists really have going for them is that people are risk averse and are wary of change.

On the other hand, the reformers have a moral message about ownership, independence, choice, and equality that I think may prove popular. A problem for the left in the Hillarycare debacle was that they had no adequately resonant response to the moral argument of the anti-nationalizers (not to mention the practical arguments). I don’t think they have an adequately resonant moral response in this case, either. So their success really depends on their ability to effectively plumb the depths of mammalian fear. Risky schemes! Grandma on cat food! Rapacious moneybag bankers!

Viewing 34 Comments

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    The bizarre thing about the surprisingly pervasive "This is an insidious plot by Bush to enrich his investment banker supporters!" schtick is that many of the same people who advance that argument are populists who demonize the rich.

    For them, when the rich make investments in companies, it's worker exploitation and an insidious plot to make rich people richer. When the poor have a chance to make investments in companies, it's an insidious plot to transfer money from the investors to investment bankers.

    Maybe there's something to that argument regarding volume of investment or something that I'm not getting, but as it's been formulated to me, it seems unpersuasive in the extreme.
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    Hehe, Justin, "as it's been formulated to me". By whom?

    Private retirement accounts have been tried in other countries like Britain, Chile, etc. The fees to administer these plans average about 20% of the assets.

    Assuming the workers half of Social Security taxes is about $300 billion a year now (it will get much bigger), that's $60 billion a year that will flow into the invetment bankers pockets under the current SS 'reform' plans.

    You call that "unpersuasive in the extreme?" You must be Bill Gates!
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    New Deal, New Wave, New Age...that's the trouble with naming something "New."
    Just sounds dated after a while.
    Reminds me of a corny joke I heard back in the early 80's: "If New Wave doesn't last, it'll be called Shortwave; if it does, it'll be called Permanent Wave."
    Guess some folks wanna make the New Deal the Permanent Deal.
    Kinda creepy when you put it that way, innit?
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    Monkeyboy--

    Stop using phrases like "worker's half". That is just some social democrat lingo to pretend that somehow only half of your social security comes out of the paycheck and that we are socking your employer for the other half. Come on.
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    Call it whatever you want...it's still $60 billion a year in welfare for the rich.

    Why force people to create accounts for the republicans to loot? Why not just eliminate the tax and let people decide what to do with the extra money?

    Isn't that the libertarian way?
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    Baby steps, monkyboy. Baby steps.
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    monkyboy: SS is welfare for the rich *today*. 20 year old burger flippers have 12% of their wages confiscated and handed to retirees who are on average much wealthier than they are.

    "Why not just eliminate the tax and let people decide what to do with the extra money?"

    Precisely. Also means-test the benefits. That way Social Security becomes just a safety net for those who actually need it, not a fraudulent retirement plan.
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    Brian, SS is hardly welfare in its current state. The workers who are retiring now have been paying into it their whole lives. For 20% of retirees, their SS check is their only form of income. For another 40%, SS checks go towards such basics as rent and food.

    Micha, if libertarians think that allowing the republicans to loot hundreds of billions of dollars is just a necessary evil on the way to eliminating SS entirely, they are fools.

    Bankrupting the US government will lead to anarchy here and in the rest of the world, not a libertarian paradise. The desire of libertarians to become fiscal martyrs who don't care who they take down with them makes them no better than Muslin fundementalists.
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    monkeyboy,

    "Why force people to create accounts for the republicans to loot? Why not just eliminate the tax and let people decide what to do with the extra money?"

    You're right, and that's the only right answer.

    Do you actually favor it, or is this merely a cynical political tactic?
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    John, I'm an old school libertarian who believes in a balanced federal budget. Why are government finances in such a mess?

    Between 2001 and 2004:

    Corporate income taxes have fallen from 26.6% to 22.6%

    Personal income taxes(excluding Social Security) have fallen from 14.2% to 10.8%

    At the same time, the federal budget has increased 34%

    Private Social Security accounts will actually increase the size of the federal budget. What is needed is cuts in the federal budget and increase in taxes to bring the system back into balance.

    Anyone who proposes anything else is just selling something.
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    Zero out the DEA budget, while legalizing and taxing currently illegal drugs, and you have a libertarian solution to the deficit. Sadly, that's a pipe dream. Oh well, whatever, nevermind...might as well fuss about social security instead.
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    Bankrupting the US government will lead to anarchy here and in the rest of the world, not a libertarian paradise.

    False Dilemma. What if anarchy is a libertarian paradise? Then we should want to bankrupt the government as quickly as possible.

    The desire of libertarians to become fiscal martyrs who don't care who they take down with them makes them no better than Muslin fundementalists.

    Awesome. Agree with me or the terrorists win. I love that argument.

    I'm an old school libertarian who believes in a balanced federal budget.

    I've never met a libertarian who thinks that debt born by a thief is a more heinous crime than the act of theft itself. (With the moral implication that a person should steal from innocent third parties to pay his debts.) Can you name any prominent (or even not-so-prominent) libertarian thinker who shares your belief that taxes should be raised to balance the budget?
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    Why tax drugs? Why is it drug users' collective responsibility to pay off debt created by politicians and their supporters?
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    What if anarchy is a libertarian paradise? Then we should want to bankrupt the government as quickly as possible.

    Hehe Micha, let me take a few guesses about you:

    You are young. Early 20s?

    You go to a college supported by the government.

    When you go anywhere, you travel on roads built by the government.

    When you flip a switch, power is delivered to you from a government built power plant.

    When you use the bathroom, your shit is carried away by a government built sewer system.

    And when you post in support of anarchy, you do so on the government developed and built internet.

    But...you think all taxes are theft!

    Hehe, live a little, gain some experience in the real world, and then talk about morals.

    Libertarian 'thinkers' support cutting government spending before cutting taxes. Otherewise, libertarianism just becomes generational rape...
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    What will Micha do?!? He's been hit with the devastating "hey, you drive on government roads!" debating point...
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    When you use the bathroom, your shit is carried away by a government built sewer system.

    Septic tanks: Making the world more libertarian, one toilet flush at a time.
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    Septic tanks: Making the world more libertarian, one toilet flush at a time.

    Hehe, anon. I laughed so hard when I read this I almost filled my pants, striking yet another "blow" for libertarianism!
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    monkyboy,

    Roderick Long nicely debunks your nonsense:


    [W]ell, look, [government is] not really a coercive monopoly. It’s not as though people haven’t consented to this because there’s a certain sense in which people have consented to the existing system – by living within the borders of a particular territory, by accepting the benefits the government offers, and so forth, they have, in effect, consented. Just as if you walk into a restaurant and sit down and say, "I’ll have a steak," you don’t have to explicitly mention that you are agreeing to pay for it; it’s just sort of understood. By sitting down in the restaurant and asking for the steak, you are agreeing to pay for it. Likewise, the argument goes, if you sit down in the territory of this given state, and you accept benefits of police protection or something, then you’ve implicitly agreed to abide by its requirements. Now, notice that even if this argument works, it doesn’t settle the pragmatic question of whether this is the best working system.

    But I think there is something dubious about this argument. It’s certainly true that if I go onto someone else’s property, then it seems like there’s an expectation that as long as I’m on their property I have to do as they say. I have to follow their rules. If I don’t want to follow their rules, then I’ve got to leave. So, I invite you over to my house, and when you come in I say, "You have to wear the funny hat." And you say, "What’s this?" And I say, "Well, that’s the way it works in my house. Everyone has to wear the funny hat. Those are my rules." Well, you can’t say, "I won’t wear the hat but I’m staying anyway." These are my rules – they may be dumb rules, but I can do it.

    Now suppose that you’re at home having dinner, and I’m your next-door-neighbor, and I come and knock on your door. You open the door, and I come in and I say, "You have to wear the funny hat." And you say, "Why is this?" And I say, "Well, you moved in next door to me, didn’t you? By doing that, you sort of agreed." And you say, "Well, wait a second! When did I agree to this?"

    I think that the person who makes this argument is already assuming that the government has some legitimate jurisdiction over this territory. And then they say, well, now, anyone who is in the territory is therefore agreeing to the prevailing rules. But they’re assuming the very thing they’re trying to prove – namely that this jurisdiction over the territory is legitimate. If it’s not, then the government is just one more group of people living in this broad general geographical territory. But I’ve got my property, and exactly what their arrangements are I don’t know, but here I am in my property and they don’t own it – at least they haven’t given me any argument that they do – and so, the fact that I am living in "this country" means I am living in a certain geographical region that they have certain pretensions over – but the question is whether those pretensions are legitimate. You can’t assume it as a means to proving it.


    Libertarian 'thinkers' support cutting government spending before cutting taxes.

    Who are these "libertarian" thinkers? Can you name one self-described libertarian who opposes cutting taxes because balancing the budget is more important? (Julian Sanchez is the only self-described libertarian I know of who has made a similar argument, and he made it with various caveats attached.)
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    Micha, I think I made it in the Dec 26 Philly Inquirer.
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    Wow, Micha, funny hats and "Libertarian Anarchism", what the hell is this? I feel like a Japanese World War 2 veteran who goes on vacation in the Phillipines and finds some of his old comrades hiding in the jungle, thinking the war is still going! And they have gone insane...

    Take a seat, I've got some bad news for ya, WE LOST! Hehe, libertarianism is a failed ideology.

    Come on, look around. People are being thrown in jail for 30 years because they sold a bag of pot, our troops are slaughtering innocent Iraqis in the name of 'freedom', and the federal budget grew 34% in the last 4 years. Jesus, it's over, pal.

    Might as well sell out to the Rebublicans and write stories about how private Social Security accounts are going to 'shrink' the government if you are going to live in fantasy land. At least you'll make a few bucks doing it.
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    Why not just eliminate the tax and let people decide what to do with the extra money?

    Isn't that the libertarian way?

    Yes! Shrink Social Security, don't "privatise" it.

    - Josh
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    monkyboy,

    Hehe, libertarianism is a failed ideology.

    If you believe this, why do you continue to call yourself a libertarian?

    Will,

    My mistake. Well-reasoned article, though I still side with Friedman.

    Josh,

    I interpreted McClain's proposal to be his favored end-game, and not a second-best, politically feasible compromise. An end to the drug war with drug taxes is better than the existing regime, but an end to the drug war with no drug taxes is even better. So too, the best solution to the problems with Social Security is to get rid of it completely, but a political compromise may be second-best.