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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (98488)	2/3/2005 2:10:53 PM
From: LindyBill	Read Replies (1) \| Respond to of 793682

The Conservative Philosopher - Social Security Reform and Power (WFV) On the t... By Bill Vallicella Social Security Reform and Power (WFV) On the topic of Social Security reform, you may have noticed how conservatives play ‘progressives,’ while liberals play ‘reactionaries.’ Why is this? Why is there so much vehement opposition to SS reform? Before I answer my question, I want to review the remarks George Bush made last night during his State of the Union address. Bush gave three reasons for voluntary, privately owned SS acounts. The first was that a greater return can be expected on the money invested in such accounts as compared to the same money ‘invested’ in the SS system. The second was that privately owned accounts can be transferred at death to some party specified by the owner. The third reason was that the money in such accounts, being owned by the one who contributes to them, is relatively safe against government seizure. Bush also specified five guidelines for these private accounts. First, the money contributed to private accounts would be invested in a conservative mix of stocks and bonds. Second, investment fees would be kept low. Third, steps would be taken to mitigate the effects of market fluctuations. Fourth, the pay-out would occur over time and not in a lump-sum. Fifth, a maximum of 4% could be contributed to private accounts. Thinking about this proposal, a fair-minded person should be able to see how reasonable it is. This impression of reasonableness ought to be reinforced by the poverty and inanity of the liberal counterarguments. Harry Reid (D-NV) could do little better than to label the proposal ‘Social Security roulette’ and then make a lame joke about Las Vegas being in his district. Paul Krugman this morning on Amy Goodman’s Democracy Now show spoke of money being "diverted" (his word) into private accounts. This language of diversion, much loved by some liberals, betrays the liberal-leftist presupposition that the money a person earns does not belong to that person, but to the government, and that special argument is needed to justify a person’s keeping of his own money. That is precisely backwards: The onus is on the government to justify its taking of our money; the onus is not on us to justify our keeping of it. (I know that there are liberals who maintain that the government is us. But that is a proposition so manifestly false as to be beneath refutation.) Many love to reach for the following strawman argument. "Privatization involves putting retirement money into the stock market, which is no better than risking it in Las Vagas." But no privatization plan involves putting the money in the ‘stock market’ if by that is meant one or a few risky stocks. One could do it like this: 60% goes into an index mutual fund pegged to the Wilshire 5000; the remaining 40% into a bond index fund that tracks the Lehman bond index. Worried about market fluctuations near retirement time? Then rig up a balanced index fund with a life-cycle feature: the balance shifts over time, going from 60/40 to 50/50 to 40/60 to 30/70. Or whatever. If I can figure this out, surely the policy wonks can do even better. Another trick many liberals and leftists use is to speak of ‘privatization’ when the proposal is one of partial privatization. A cognate trick, a Ted Kennedy favorite, is the use of ‘dismantle’ when the correct term is ‘reform’ or ‘improve.’ I don’t have the time or the stomach to go through all the bad arguments, but let’s look at one more. Karen W. Reyes, writing for the The AARP Magazine (March/April 2005, pp. 32-33) says that the following is a "myth": "The fund starts getting into trouble in 2018." 2018 is the year in which SS benefit payments are expected to exceed payroll deductions. This is not a problem according to Reyes because "from 2018 through 2027, incoming tax revenues combined with interest earnings will still be enough to pay benefits and build the trust fund balance." Let’s think about this for a moment. Interest earnings are supposed to make up for the shortfall predicted to begin in 2018. But who will be paying this interest? Why, another part of the government! And where will this entity get the money? It is not as if there is a huge storeroom over at Treasury filled with stacks and stacks of the lean green. The money to make the interest payments to the trust fund will have to come from raising taxes. This implies that the tax payers will be the ones paying the interest on the debt instruments deposited in the trust fund when the money that went into the trust fund was immediately taken out again to pay for general government expenses. Got that? I say ‘debt instruments’ because, if I am not mistaken, these are not U.S. Treasury bonds as Reyes falsely asserts (p. 34), but funny bonds, some sort of government-internal IOU, an instrument that cannot be bought and sold on the bond market. (If I am mistaken about this, please leave a comment with appropriate links.) Now let me answer my opening question: Why the vehement opposition to SS reform? Given that the arguments against it are worthless, it is appropriate to psychologize. So here goes. Liberals and leftists want power above all else, and to gain and maintain power, it helps to have the populace dependent on them for handouts. (Conservatives want power too, but in order to implement ideas, and not merely for the sake of power. Of course, this requires further argument. ) If there are private accounts, then people have less need of big government and those who profit from it. Private property is the foundation of individual liberty. The more private property (including private retirement accounts), the more liberty and the less need for liberals. The less private property, the more need for big government liberals to dole out to people what they need from the common pot. It’s about power, its gaining and maintaining. theconservativephilosopher.blogspot.com