Saturday, August 20, 2005

Simplifying Social Security Debate


I am no expert on the topic, and do not so pretend, but the outlines are quite plain, I think.

The Republican Party is no longer a small government party. They have been spending, and spending, and spending some more. That is what happens when you give all three branches of government to one party.

Deficits and debts are not good things. They can be temporarily incurred, but not forever. I don't know for sure why the Roman Empire collapsed, but America looks set to lose its number one position by overspending and overborrowing. The party is not going to end with a bang, but a whimper. You can't swipe a credit card forever.

On Social Security, instead of debating if the money thus collected should at least partly go to private accounts, why not encourage the rich (and famous) to save part of their earnings towards the same end? The stock market can always use some more money. That is how stocks go up, when people pump in more money into the stock markets. The demand and supply sometimes cuts itself off the real earnings and value of a company.

So you leave the social security tax for the purpose it is intended, and you encourage people to save in addition. You could even design tax credits and tax write-offs to thus encourage savings.

Social Security makes mathematical sense, statistical sense, just like car or health insurance. As soon as you drain away the pool, you are draining away the collective benefits. In non diplomatic talk, the Bush talk on Social Security Reform is an ideology taken too far, too much to its logical end.

There is parallel here between private accounts, and school vouchers. I am all for competition, but it should not be done in a way that students who are already strapped for resources will end up with even less resources. Vounchers, by definition, will benefit a select few at the expense of many others.

This is not to suggest I tow the Democratic line on these two issues. I don't.

The Republicans are wrong. The Democrats have not offered alternatives. Homework time.

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