Zorn points out that the debate over Social Security is more than one of accounting, but also one of values.
The problem is the Bush Administration is selling the idea as being just as secure and so opponents feel the need to point out it isn’t and demonstrate exactly why it isn’t, but I think that is the basic argument that most supporters of Social Security as it is now are making.
Two recent responses by more libertarian oriented supporters of privatization are certainly more honest about what privatization is about for them. First is Jacob Sullum’s piece in Reason that argues privatization isn’t about solvency, but of reducing the role of government in people’s live.
Although sold to the public as a pension system, Social Security is based on the forced transfer of resources between generations. It steals from the poor to give to the rich, and it substitutes dependence on a beneficent state for self-reliance and voluntary mutual aid. It may not be financially bankrupt, but it is morally so.
By contrast, private investment accounts represent genuine savings, as opposed to claims on other people’s money. There is no getting around the fact that requiring people to save also involves the use of force, but this sort of paternalism seems preferable to the predation at the heart of the current system.
And this is where Social Security is a conservative idea in terms of what Edmund Burke would say is conservative–a tie that binds generations.
?”Society is indeed a contract. Subordinate contracts for objects of mere occasional interest may be dissolved at pleasure — but the state ought not to be considered as nothing better than a partnership agreement in a trade of pepper and coffee, calico, or tobacco, or some other such low concern, to be taken up for a little temporary interest, and to be dissolved by the fancy of the parties. It is to be looked on with other reverence, because it is not a partnership in things subservient only to the gross animal existence of a temporary and perishable nature. It is a partnership in all science; a partnership in all art; a partnership in every virtue and in all perfection. As the ends of such a partnership cannot be obtained in many generations, it becomes a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.” (Reflections on the Revolution in France, 1790.)
Libetarians believe that those ties don’t exist except in to maximize freedom. I, and probably most others in the US disagree with that notion of what society is and should be.
If you accept Sullum’s underlying propositions about the nature of society, Social Security is predation, but if you see generations as not autonomous individuals, but a larger part of a contract, Social Security isn’t paternalistic, but a partnership.
In response to Zorn’s column, Michael at the Chicago Report responds,
Zorn is right. The issue is the paternalistic state of FDR and its dismantling under Gingrich and Bush. The issue is about who is in a better position to make decisions about life and retirement you or the government. The issue is about whether the government is going to treat people as adults with the power to plan for the future and think for themselves and thus expect people to treat themselves as adults. Or is the government going to treat us as children who’ve got to be told what to do, thus creating a race of man that cannot plan for anything because they’ve never had to. Zorn is right the Social Security issue about more than money its about the ideal of what the federal government should be. Its a generational battle between Reagan and FDR.
Given Michael’s views, this is about how I’d expect him to describe it, but it gives short shrift to the overall impact of Social Security. Social Security, as with most forms of social insurance, allows one to engage in riskier behavior with a safety net whether it be changing jobs or investing, one can take chances knowing there is a floor there if it goes badly. That is a good thing for a society and an economy.
The one issue I’ll take issue with is that social security discourages planning. This isn’t true–and the evidence is that if it did there wouldn’t be a financial planning industry as we see it today. Social Security is a portion of people’s retirement plan and it allows them to plan knowing that they have a guarantee they will not do worse than. Those that don’t plan are largely those at the bottom of the economic rung who most need the security of the system. If you were to remove required contributions, that money would likely be spent on more pressing needs for many working poor like child care, better housing or other necessity they aren’t doing well providing for now. Social Security guarantees them a minimum when they are older even if they haven’t planned, but for those with less pressure in the immediate term, there is a lot of planning that goes on. Before social security there wasn’t much planning by those for retirement who were poor because that was a luxury to them. Now, most died before retirement, but many did not.
Americans’ Future In One Plan
I know that most of you are busy to read my book. As I explained previously that Taman Health Plan (www.trafford.com) takes care of all the health care, Medicare, Medicaid and social security. It will threw away all bureaucracies out of window. Let me explain shortly how it works:
1- there will be no more health care insurance companies, no Medicare, Medicaid or Social Security. My plan will take care of all.
2- Basically will be only one Big Health care organization (Taman Health Plan or THP).
3- The center of the plan will be in Washington while the health departments in every state will be the branches.
4- One organized body will be taking care of the Health Care and long term care of all Americans replacing 1500 insurance companies, Medicare, Medicaid and Social Security.
5- This will allow us to provide a uniform service to all Americans every where in both inpatients, outpatients and long term care.
6- When you go to any Duncan Donuts branch your expectation is to have a fresh coffee and a donut with no long wait. We will try to provide a similar predictable service everywhere as Duncan Donuts. With having only one body will be able to do that.
7- The Capital of the plan will be the funds of Medicare and Social Security (before the bankruptcy of both systems). The maintenance will be a yearly tax from each of us (will replace our yearly social security and Medicare holding taxes). A percent of each of us go to his account cards and a percent go to THP itself. The money of the plan will be invested by the investing sector of the plan very likely in Wall Street.
8- We will have 5 ATM cards with a corresponding accounts. Card A (children), Card B (working group 18-65years old), Card C (Medicare card >65 years old), Card D (Medicaid card), Card E ( expensive medicines or investigations).We will have the health cards devoted to health care and long term care. Thus we will have: health cards, banks with accounts to each card and credit card machines in outpatients care and hotelling part of hospitals and nursing homes.
9- Cards will pay for the outpatient medical care including doctors, emergency room visits, investigations, medical supplies, pharmacies and the hotelling part of hospitals and nursing homes. While the medical part of hospitals and nursing homes will be budget by the plan itself.
10- In the first year of issuing cards: Card B and C (most of people) will have a bonus it could be a percent of their Medicare and social security withholding (70 % or so). We will try to be fair to every one but every one has to now that most of us already lost a lot of money with the HMO’s. For next year new comers to card B at age of 18 when first issued will have a bonus of 50,000 dollars. It will change every year by a percent a according to inflation.
11- every one of us will get a statement every one or two months of his card account. Card B account will phase in card C at the age of 65. If card C account is vanished Card D will be issued (hoteling part will be less luxurious). Only few of Card B will have card D if there account vanish most likely those with severe medical problems.
12- So basically most of us will have our own account Card B then card C. Say you are 45 and you have now in your account $ 200,000 you can take one or more years out of work, you Can retire early if you like and with your card you will control all the medical services and its prices.
13- With this card system we will end all bureaucracies of health care, Medicare and Medicaid. No one will stand between you and any medical or long term service (only your card). Shop around with you card, have early health care security and responsibility and invest in your health.
14- We will not need Social Security since after age of 65 we will be able to use our cards to stay in any nursing home each according to his account in card C or card D. So when you invest well in your health you will be able to enjoy a nicer nursing home when you get old (actually it will be also a kind of tourism).
15- The money in cards do not get inherited when we pass away but recycle in the plan to support the next generations.
16- The plan will have very positive effects not only in simplifying our care, save a lot of waste in health care, give early health care security and responsibility to Americans it will also have a positive effect on the economy, saving billions of dollars to Americans, creating jobs in health care and cutting outsourcing.
Very likely, you figure it by now I could have sold the plan to one of the presidential candidate before the 2004 election for millions of dollars (they already spent 2 billion dollars). It is my gift to the American people (it will help the healing process of the two worlds America and the Muslim/Arabs).
Maged Taman.
2/20/05