Sidney Blumenthal: On Social Security, Bush Is Borrowing from Alf Landon's Playbook

Roundup: Media's Take

Sidney Blumenthal, in Salon (3-3-05):

The coming defeat of President Bush on Social Security will be the defining moment in domestic policy and politics for his second term and for the future of the Republican Party. It will be a central, clarifying event because Bush alone chose to make this fight.

Campaigning in 2004 on the trauma of Sept. 11, he won by the smallest margin of any incumbent president in American history. The Electoral College map was little changed from the deadlock of 2000. While Bush barely took two states he had lost before (Iowa and New Mexico), he lost one to John Kerry -- New Hampshire. Bush's political advisor, Karl Rove, had forecast a fundamental realignment that would establish Republican dominance, but Bush's desperate political position required a series of tactics of character assassination against the Democratic candidate and culture war gambits on gay marriage, atmospherically organized around the fear factor of Sept. 11. The outcome was a strategic victory but not a structural one, and Bush's campaign further polarized the country.

In the chasm between his meager win and his grandiose ambition, Bush might have decided to form a government containing some moderate Republican and Democratic Cabinet members, claiming that the gravity of foreign crisis demanded national unity. But the thought never occurred to him. Instead, he bulled ahead in the hope of realizing the realignment that eluded him in the election.

Not since 1928, when Herbert Hoover was elected in a landslide, have the Republicans held the White House and such majorities in both the House of Representatives and the Senate. Bush acts with the urgency of a president for whom this political advantage must be seized now or lost forever. So he has decided to swing a sledgehammer at the cornerstone of the New Deal and the Democratic Party. The gamble would pay off in closely tying to the Republican Party the Wall Street banks that would finance the transition costs of privatization and the bond houses and stock firms that would be flush with new investments. But, most important, it would unravel the fact and idea of government insurance programs providing for the needs of the people as a whole. Once Social Security was cut into pieces, the Democrats would be left defensively representing the least politically powerful and most vulnerable -- literally the lame and the halt, the poor single mothers ("welfare queens") and minorities. The Democrats would be drawn and quartered on the wheel of broken entitlements.

Bush launched his initiative to privatize Social Security with a bang, promoting it in his State of the Union address and stumping the country at rallies. Rove has been put in charge of organizing the campaign as an extension of the 2004 effort. From the White House, Rove directs the lobbyists of K Street in Washington and the U.S. Chamber of Commerce, the National Rifle Association and the religious right. Suddenly, the Swift Boat Veterans for Truth have reappeared as warriors against the pro-Social Security AARP, smearing the seniors organization as anti-military and pro-gay marriage. And Tony Feather, a Republican consultant with longtime ties to Rove, has reemerged with a war chest of millions to spend through a front group called Progress for America, just as he did against Kerry.

Even the Social Security Administration has been inducted in the campaign. Five years ago, it sent out a routine annual booklet titled "The Future of Social Security": "Will Social Security be there for you? Absolutely." Now a new booklet has been mailed to tens of millions warning: "Social Security must change to meet future challenges." And it suggests that Social Security should not be regarded as a "foundation on which to build your financial future."

And yet the more the public has learned of Bush's plan, the more it has buckled. Poll after poll reveals that increased information leads to heightened resistance. Growing majorities oppose Bush's program, Bush's favorability rating has plunged to the lowest level of any president at this point in his second term, and trust in the Democrats has steadily risen.

In the face of public rejection, Bush retreats and attacks at the same time. He has announced that he is uncertain when or even if he will propose his own bill before Congress, while the White House says that the president will stage new rallies for the Social Security initiative that has yet to take any practical form.

Republican leaders have become studies in hesitation and anxiety. Senate Majority Leader Bill Frist declares that the "pacing" should be "determined by the American people." In a statement as fuzzy as he could manage, he explained, "In terms of whether it will be a week, a month, six months or a year as to when we bring something to the floor, it's just too early."

House Majority Leader Tom DeLay, rhetorically echoing Saddam Hussein ("mother of all battles"), called Social Security the "mother of all issues." He added, "And it is going to take a lot of dialogue with the American people." When Tom "the Hammer" DeLay, who hangs a whip on his wall, pleads for understanding, the problem must be that the American people understand too much already.

For Bush and the Republicans, the problem is salesmanship. If only they hone the pitch, convince the wary customers that they really mean well, saving them from a bad investment and delivering a bargain, they will clinch the deal. Frank Luntz, a Republican consultant who has made a specialty out of wordplay, has advised them on how to make friends and influence people. In a memo circulated among the Republican leadership last month, he urged that Republicans appeal to emotions, not facts. The public, Luntz writes, wants "empathy rather than statistical declarations ... It is tempting to counter-attack using facts and figures. Resist the temptation." He reemphasizes: Social Security "is a difficult subject because there are many obscure facts and figures. Stay away from them!!!" No fewer than three exclamation points!!!

Republicans, says Luntz, should never use the word "privatized." They should substitute "personalized." "And PLEASE remember that you are NEVER talking about privatizing Social Security, nor are you advocating INDIVIDUAL accounts. You are talking about creating PERSONAL retirement accounts." Republicans should also talk about "personalized accounts" as being about "the future," he says, and remind people that "Social Security was built for a different America."

Another problem, Luntz instructs Republicans, is that the public is familiar with the gyrations of the stock market. "There is a difficulty ... in talking too much about the stock market. The American people are sensitive to the ups and downs of the stock market." So, he urges, Republicans should claim that that Social Security is at "larger risk" if it is not "personalized."

When all else fails, Republicans should simply resort to the fear factor: "September 11th changed everything. So start with September 11th. This is the context that explains and justifies why we have $500 billion deficits, why the stock market tanked, why unemployment climbed to 6 percent ... Without the context of September 11th you will be blamed for the deficit ... Link the war on terror to the economy."

But Luntz's rhetorical twists and turns, adopted by Bush and the Republicans, are hardly innovative. They are as ancient as the earliest arguments made by Republicans against Social Security when it was first introduced. Social Security is in crisis, Social Security will not be there, only the Republicans can save the system by privatizing it -- all these themes were advanced in the 1936 Republican Party platform. This yellowing document reads like the most recent Republican declaration:

"Society has an obligation to promote the security of the people, by affording some measure of protection against involuntary unemployment and dependency in old age. The New Deal policies, while purporting to provide social security, have, in fact, endangered it." The 1936 Republican platform claims that the federal government will not be able to meet its financial obligations to pay retirement benefits and two-thirds of the people will be deprived. It also insists that "the fund will contain nothing but the government's promise to pay" and is "unworkable."

The Republican candidate for president against Franklin D. Roosevelt that year, Alf Landon, governor of Kansas, was the first to run on "reforming" Social Security, which he dubbed a "hoax." Roosevelt's victory seemingly settled the question of Social Security and the basic programs of the New Deal. In every election afterward, the GOP split internally between conservatives, who rallied behind their standard-bearer, Sen. Robert Taft, and those who called themselves modern Republicans. When Dwight Eisenhower defeated the eternally disappointed Taft for the 1952 nomination, the conservatives crawled to a corner, embittered and despairing. Conservatives were convinced that overthrowing the New Deal must be accomplished through a long march through the Republican Party, also overthrowing modern Republicanism.

At last, in 1964, the conservatives grabbed the Republican nomination, and their candidate, Barry Goldwater, thrilled them by declaring his opposition to Social Security. Goldwater advocated privatization to deal with what he claimed was the system's crisis: "It promises more benefits to more people than the incomes collected will provide," he said.

In the closing days of the 1964 campaign, as Goldwater faced overwhelming defeat, his campaign purchased television time to broadcast a speech by a Goldwater supporter who was felt to be a more convincing salesman than the candidate -- Ronald Reagan. Reagan's speech was his debut on the national stage and the effective launch of his political career. The image remains; the words are mostly forgotten.

In fact, much of his talk was devoted to making the well-worn case against Social Security. It faced "fiscal shortcomings." It was not "insurance" but really a "welfare program." It was deeply in debt. Young workers could "take out a policy that would pay more than Social Security. Now are we so lacking in business sense that we can't put this program on a sound basis, so that people who do require those payments will find they can get them when they're due -- that the cupboard isn't bare? ... Can't we introduce voluntary features?" To conclude his argument, Reagan warned that a medical program in France was bankrupt and that this fate would befall Social Security. "They've come to the end of the road."

But when Reagan became president he jettisoned his denunciation of Social Security. In 1983, he signed a bipartisan tax and benefits bill extending its solvency until 2060. The ultimate conservative had used anti-Social Security rhetoric to galvanize his conservative base to gain office, but as president he joined his Republican predecessors in supporting the system. With that, he took the issue off the table for years. In 1996, Sen. Bob Dole never mentioned a word against Social Security, proud of having been a co-sponsor of the 1983 bill Reagan had signed.

Now, George W. Bush has sought what Ronald Reagan would not. Only Bush as president has attempted to make good on the reactionary rhetoric against Social Security since its inception. He has tried to dress up his effort as a "reform," as a "new idea," but the language, upon historical examination, turns out to be recycled from the 1936 Republican platform, the Landon and Goldwater campaigns, and words that Reagan discarded as president.

Bush's impending defeat on Social Security is no minor affair. He has made this the centerpiece of domestic policy of his second term. It is the decades-long culmination of the conservative wing's hostility against Social Security and the Democratic Party. Projecting images of Roosevelt and Kennedy cannot distract from Bush's intent to undermine the accomplishments of Democratic presidents. The repudiation of Bush on Social Security will be fundamental and profound and will shake the foundations of conservative Republicanism. Bush's agony is only beginning, if the Democrats in the Senate can maintain their discipline.

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Vernon Clayson - 3/23/2005

Moshe, I didn't intend to say anything else on this but I have to tell you some interesting news about Senator Harry Reid. He is on a trip to Iraq and he says the biggest surprise to him there is the number of men and women carrying guns - and this is on a military base in a war zone. That's a real surprise, I wonder if he has ever visited a police station in Nevada or Washington, D.C., he probably would be surprised that cops carry guns. I think he may have expected campfires, singalongs and perhaps even a 1960's Kum bayah in Iraq. He was also amazed that young guys there were lonely and wanted to go home, what and miss all that fun?

Marc "Adam Moshe" Bacharach - 3/18/2005

1) “what does the Democrats being "stalwarts in every election mean?”

It means that since the New Deal, Democrats have fervently defended social programs like Social Security in addition to many others, making your claim that they do not care about the issue of Social Security reform (the implication being that they really don’t care about its long term future) is simply not borne out by history.

2) “Social Security is a good program but it can only be propped up for so long on pay as you go. Reid and his ilk know this and know that it has to be dealt with but they are more interested in defeating anything Bush has his hands on. If they could somehow dismantle it entirely and blame it on Bush, it would be gone.”

Aside from your accusation, there is no evidence to support this claim, it runs counter to the entire Democratic party, platform, and members, and it entirely counter-intuitive.

3) “Gumby is good, the real Democrat powers in the Senate have molded him into an attack dog, a position he is completely ill-suited for.”

Perhaps you could share with me exactly who this mystery power is?

4) “I'm not going to write anymore on this as you are not malleable.”

Fair enough. See you next time!

Vernon Clayson - 3/18/2005

Moshe, Moshe, what does the Democrats being "stalwarts in every election mean?" I've been voting since the late 50's and don't recall that Social Security being on a ballot and the public never voted on any of its provisions. There was the LBJ new society addition of Medicare in the 1960's but the public didn't get to vote on that either. Social Security is a good program but it can only be propped up for so long on pay as you go. Reid and his ilk know this and know that it has to be dealt with but they are more interested in defeating anything Bush has his hands on. If they could somehow dismantle it entirely and blame it on Bush, it would be gone. Anyway, it was a toss up whether to compare Reid to Don Knotts as Barney Fife or Gumby, the malleable plastic figure. Gumby is good, the real Democrat powers in the Senate have molded him into an attack dog, a position he is completely ill-suited for. I'm not going to write anymore on this as you are not malleable.

Marc "Adam Moshe" Bacharach - 3/17/2005

Somewhere between your petty insults and partisan mud slinging was some actual points I thought I would address (no doubt in vein but here goes anyway):

1) “It's obvious he and his ilk don't really care about Social Security reform, or anything else the Republicans try to promote, he is interested only in getting something, anything, the president proposes to fail.”

Perhaps you misread Reid’s statement. Allow me to post it again:
“Democrats recognize that Social Security faces a long-term financial challenge. We are ready to work with President Bush to strengthen Social Security, but we need to get it right. That means doing no harm and not cutting Social Security's funding by diverting trillions of dollars.”

If you are having difficulty understanding the sentence, I will translate as best I can:
- Social Security needs fix’n
- Democrats want to work with Bush
- Democrats don’t want to cut funding to Social Security

If Democrats just “latched” onto Social Security, I might agree that they don’t really care. However, given the facts that the Democratic party has been stalwarts of the Social Security system from its inception in 1935 to every single election since, to suggest that they “don't really care about Social Security reform” is simply silly and flies in the face of all evidence. I would say however, that evidence of Republican attempts to undermine of dismantle Social Security have a great deal of historic and contemporary evidence, leading the rational observer to note that if either party doesn’t really care about SS reform (and I am not saying that they don’t) it cannot be anything other than Republican conservatives.

2) “Perhaps you haven't noticed it before but Harry "give-em-hell" Reid chooses to put his back up almost every day about something and I'm sure you haven't noticed that the president and those in his administration pay little attention and if they do, it is always in a civil manner.”

Actually, I haven’t noticed. Must be all the partisanship both sides have displayed over the past 4 years that makes it easy to miss Reid, particularly when his opposite number broke historical precedent to campaign against his predecessor, among other acts of egregious partisanship.

As for the president adopting a civil manner, it is a pity that Republicans such as yourself cannot learn anything from it, but choose instead to post ridiculous posts such as that last one attacking anything and anyone you happen to disagree with. Bush, as an astute politician, cannot be so crass and immature, and frankly, I doubt he would anyway.

3) “Harry also reminds me of another show biz character in his angry moments, Don Knotts on the Andy Griffith show, all puffed up and bristling in petulant anger.”

I actually smiled when I read this! You are the first person I have ever heard compare Harry Reid to a “show biz character.” I have heard people complain that he is boring, uninteresting, and bland, but NEVER compared to “Don Knotts on the Andy Griffith show, all puffed up and bristling in petulant anger.” I have never even seen Reid angry, although I wish I would more often.

Perhaps we are simply not talking about the same person, or perhaps your caricature of Democrats is so overwhelming, you honestly believe what you write. Either way, its funny stuff.

Vernon Clayson - 3/17/2005

Moshe, where's Catsam, your partner in slime. Social Security doesn't exist in a vacuum, individuals make the decisions and the myopic Harry Reid seems to be taking the negative side on anything that has to do with the president and the Republicans. It's obvious he and his ilk don't really care about Social Security reform, or anything else the Republicans try to promote, he is interested only in getting something, anything, the president proposes to fail. Perhaps you haven't noticed it before but Harry "give-em-hell" Reid chooses to put his back up almost every day about something and I'm sure you haven't noticed that the president and those in his administration pay little attention and if they do, it is always in a civil manner. Harry also reminds me of another show biz character in his angry moments, Don Knotts on the Andy Griffith show, all puffed up and bristling in petulant anger. Where's Catsam on this?

Marc "Adam Moshe" Bacharach - 3/17/2005

If Gallup is correct (and I have no reason to doubt that it is) President Bush should be congratulated once again for a skillful sales campaign. We will have to wait and see where the numbers go. The Washington Post reported that the more people learn about the plan, they more they dislike it. However, it possible that, as with other areas, Bush is able to convince a solid majority that this issue is what should consume their concerns right now. After all, this strategy worked very well in pushing for his tax cuts and his foreign policy, so who knows.

If that does happen, and he does manage to get majority support for his plan, it will not change my opinion of it. If there is one thing that I have learned in the past 4 years, it is that majority opinion does not wise policy make. Of course, only time will tell and since he has no specific plan that he has presented, we are left only with the vague concept of private accounts, which will do nothing to fix the system shortfall and will drive us deeper into debt.


John H. Lederer - 3/17/2005

I just saw this summary of a Gallup poll this am, but I don't have a link to the poll yet:
"Gallup has released more polling data on Social Security and it is newsworthy.

When respondents were asked, “Do you think it is — or is not — necessary for Congress and the president to pass legislation THIS YEAR to make changes to the Social Security system?” 51 percent responded yes, 46 percent said no, and 3 percent had no opinion.

Secondly, respondents were asked, “Suppose Congress and the president do pass legislation to make changes to the Social Security system this year. Do you think that legislation should — or should not — include a provision that would allow people who retire in future decades to invest some of their Social Security taxes in the stock market and bonds?” 58 percent responded yes, 37 percent responded no and 5 percent had no opinion.

Gallup polled 1,004 national adults over the age of 18 for their survey."

Marc "Adam Moshe" Bacharach - 3/16/2005

What on earth are you talking about? This is not a debate over Harry Reid, it is a debate over social security, on which Harry Reid enumerated the position of Senate Democrats. Your rant of insults directed towards Reid is entirely irrelevant, both to social security, as well as any other conceivable topic that I can think of.

Vernon Clayson - 3/16/2005

Wow, Harry Reid has time to read this drivel and respond to it? That's amazing, certainly a man for his time and he came from tiny Searchlight, Nevada, a son of a miner and a child there wants to emulate him; I gathered that from his soporific response to the president's State of the Union message. Harry didn't mention his nickname during that dreamy message that as a child he was called "Pinky", but can you believe how omniscient his childhood friends were, realizing even then that he was inclined toward socialism. Since wrapping himself in the cloak of minority leader he has commenced snarling epithets at Republicans. They aren't shouted like Ted Kennedy does, Harry's epithets are more whispered, a little like Clint Eastwood rasping his lines through thin lips in a cowboy movie, he even has taken to squinting his eyes like Clint. Harry doesn't compare to John Wayne, even dead John Wayne isn't as boring, but I can almost see Harry, with that staged whisper he has affected, saying to Bush, like John Wayne in True Grit, "Fill your hand, you SOB."

Marc "Adam Moshe" Bacharach - 3/16/2005

I would agree with you were it not for the fact that Democrats are not making that claim. Acknowledging that Social Security faces problems is not the same as supporting that it is now our number-one priority or that private accounts are the only solution. On the battle for Social Security, I would bet that it is not the Democrats who risk looking like "complete fools."

"Democrats recognize that Social Security faces a long-term financial challenge. We are ready to work with President Bush to strengthen Social Security, but we need to get it right. That means doing no harm and not cutting Social Security's funding by diverting trillions of dollars."
-- Senate Minority Leader Harry Reid

Tom L Cox - 3/16/2005

There is a problem and demographics has alot to do with it. As boomers retire the ratio of wokers to beneficaries continues to change today it is around 3 to 1 and it will drop over the next generation to 2 to 1. That will also put pressure on the 3% of our total social security tax that goes toward Medicare.

It is an issue that has to be addressed and the Democrats are going to wind up looking like complete fools if they continue to claim there is no problem.

Marc "Adam Moshe" Bacharach - 3/16/2005

I agree, but with one catch: fixing the system, be definition, does not mean destroying it and many advocates of private accounts really wish to do exactly that. If social security does not retain its "social" nature (in that everyone contributes) and its "security" (in that it will definitely be there for retirees), then people will not support the so-called reforms.

However, if Bush or anyeone else proposes a plan to truely fix social security, rather than essentially get rid of it, I would be more than happy to consider supporting it.

John H. Lederer - 3/16/2005

Seems to me that the key question with social security is whether we "fix it" or "patch it".

Social Security as it is now (carefully avoiding the true, but polarizing words :"pyramid scheme" <g>) is very vulnerable to any changes in demographics. Those changes can easily upset any "patch" and mean that any combination of small scale modifications that seem to solve the problem can be wiped away by rather small changes in demographics. An unfunded pension plan has a lot of vulnerabilities. An unfunded pension plan in which the plan initiator can neithe control nor accurately predict how many retirees there will be nor its future income is asking for trouble.

I think, for instance, that it is probable that in the next 10-30 years we are going to see some dramatic advances in medicine. Any substantial advance in cancer, heart disease, or cell regeneration would devastate social security-- each 1 year increase in longevity above the current predictions is equivalent to a ~6% detrimental change in social securities finances.

The fix is to prefund it. Prefunding doesn't cost any more than an unfunded pension plan, but it does require us to take care of the ~4 trillion in unfunded liabilities the present plan has accrued.

So...the key question is a simple one -- do we patch it or do we fix it?

I think that the public if presented with that choice might well choose to fix it.

Marc "Adam Moshe" Bacharach - 3/16/2005

“Those three beliefs augur well for Bush in the long run.”

This is true, but unfortunately, those polls cited above are swarmed with bad news for the president, not good.

56% disapprove of how Bush is handling Social Security and although this does not get into specifics, that number has been steadily increasing from 40% in June.

You can blame the media if you like, although given the fact that they have refused to correct virtually any misstatement the administration has made during the campaign and during the lead up to the Iraq war, I hardly think that their inability to correct something Democrats may have said to be unusual. Furthermore, as factcheck.org has pointed out, if the media told the truth about what both parties say, I would bet the bank that conservatives would simply yell liberal bias.

Only 10% think Social Security should be the highest priority this year, with Healthcare beating it by 6 points and “something else” only trailing by 5 points. I agree.

As for the 71%, you might be surprised to hear it but I agree with that, and would be one of those people who believe that “If changes are not made…the Social Security system is heading for a crisis down the road.” I don’t know of any Democrats who does not accept this reality. The caveat “down the road” makes it difficult to imagine who the 29% of the people are who do not accept this.

The poll about major changes seems a little tricky, since the number of people who think major changes are necessary drops to 48% when courpled with the question of whether or not the system is in a crisis at all. I suspect that when people are asked what kinds of changes are needed FIRST, they are more likely to assume major, while when people are asked if it is in a crisis or not first, the fact that such a thing is in question leads them to step back from major changes. That is my theory anyway.

The final bad poll number in this litany of bad news for Bush (save, perhaps, the three you cite): Democrats beat out Republicans as doing a better job handling Social Security by 12 points.

As for the quote you provide, how true it is! I have long suspected that the only reason Bush’s tax cuts, Iraq war, and other policies are supported (or at least never strenuously opposed) is because why the heck not? It doesn’t cost us anything, we just borrow, borrow, borrow. Americans want to have their cake and eat it to and with president willing to finance current politically popular actions, why not simply put it off until he is well out of office along with many supporters of these policies.

As I have said before, Americans are an extremely reactionary group of people. Tell them that they have to give up something to pay for the tax cuts or that war actually costs a lot of money and that money has to come from taxes, and THEN we can judge what our priorities are.

John H. Lederer - 3/15/2005

If I read the Wahington Post poll correctly:

71% believe social security is headed for a crisis

67% believe major changes are necessary

56% support "a plan in which people who chose to could invest some of their Social Security contributions in the stock market"

Those three beliefs augur well for Bush in the long run.

However a majority don't like the way Bush is handling it, or support his proposals.

Bush has not made concrete proposals at this point. I suspect what you see are a great many people objecting to what the Democrats (and, frankly, the Washigton Post given its repeated mischarcterizations) have stated Bush's proposals are.

With the exception of abolishing the ceiling on taxed income, every other proposal (raise retirement age, change benefit calculation, raise taxes, etc) is quite unpopular. Support for abolishing the ceiling is the same as support for private accounts. Who was it who coined: "don't tax you, don't tax me, tax that man over under the tree".


Marc "Adam Moshe" Bacharach - 3/15/2005

From the NYT that I thought I would share:


Marc "Adam Moshe" Bacharach - 3/15/2005

I agree with your options, although I would add that there are far more choices available to us than the two you offer. Numerous other reforms have been recommended, including investing a portion of social security into investment options that yield greater returns, restructuring social security on the basis of need, etc. although I suppose those other options could be included in your option #1 so if so, forgive the redundancy.

I do not agree with your political analysis of a Bush defeat. Already, many Republicans are shying away from any overt support for any Bush proposal because their support will likely come to haunt them in the next election. Thus Bush’s defeat will be very expensive politically, but only for those who supported it. IF Bush’s proposal is enacted, then perhaps the Republicans who supported it will be forgiven if things start to go well.

Americans, generally speaking, are reactionary and prefer incremental change rather than radical restructuring. This is as true when it comes to foreign policy (short of some major national event like 9/11) and it is true of domestic policy. This is why neither Bush nor the Republicans are being punished at the polls for economic policies that have ballooned the deficit and shrunken the value of the dollar and this is why the Democrats, particularly as the minority party, have become so risk-averse. Americans may admire Bush’s boldness, but polls indicate that they aren’t very interested in implementing his program.

Furthermore, I think many people recognize that while Social Security is a problem that should not be ignored, it does not exist in a vacuum, but exists along side numerous other economic problems that are in far worse shape and have a far shorter amount of time before they become major economic crises.

To use an analogy: think of a car with a over a quarter tank of gas, a broken transmission, a muffler coughing up black smoke, and non-functioning headlights. Now think of a mechanic telling that person that the greatest priority right now is getting more gas.

John H. Lederer - 3/15/2005

(please excuse the repeats of prior messages... still haven't figured out what causes them).


I suppose it is a matter of how long run the long run is, how complete the switch to private accounts, and how you define the prolem. Obviously a 100% switch to private accounts solves the entirety of the social security problem when the last person due money under the old system dies.

But that is not my point. Forget about private accounts for the moment.

Social security is in trouble. We have two choices:

1) Move now with a combination of tax increases and future benefit increase reductions (possibly by increasing retirment age, changing formula, etc). and invest the money in non-government investments or

2) Wait and have a very ugly moment in the future where we do (1) only to a much greater degree.

Now, suppose the democrats derail Bush's proposals. How well will 1 or 2 sit with the public? What will the public think about who should decide where to invest the social security surplus?

In other words the democrats aim and goal, as suggested by Blumenthal, may be the political aim of defeating Bush's proposals (though notice Bush has no well defined proposals out there), not solving the problem. If they succeed -- they then have to solve the problem, because the problem is real.

Solving the problem involves pain and it will involve some form of investment of temporary surpluses in the private economy (whether by government or individuals). So we'll eventually see the Democrats have to start making very unpleasant proposals. Bush's defeat may be very expensive politically.

John H. Lederer - 3/14/2005

is that the problem of social security is still there.

Marc "Adam Moshe" Bacharach - 3/14/2005

is that the problem of social security is still there.

From factcheck.org:
"Even the White House now acknowledges that individual accounts alone do nothing to shore up the systems long-term finances. In the most detailed briefing to date on Bush's proposal, a senior administration official said on condition of anonymity that individual accounts would have a "net-neutral effect" on the long-term fiscal outlook, thereby leaving the system no better off than it currently is and still headed for PFA's "iceberg." And in the shorter term, individual accounts would create a new financial problem because they require massive federal borrowing to pay benefits as workers divert a portion of payroll taxes into their own accounts."


John H. Lederer - 3/14/2005

is that the problem of social security is still there.

John H. Lederer - 3/14/2005

is that the problem of social security is still there.