"Why is Social Security Under Examination?"

This is the title of a post of a diary at another site, one of no particular interest on its own because it just puts people on the wrong road.

A straight out analysis of the economic numbers underlying Social Security ‘crisis’ shows pretty clearly that there is no ‘there’ there. To the extent that there is a gap between future projected income and cost it is small, distant, based on pessimistic assumptions, and totally fixable even if we waited years to take the first step. You can show this on paper or in pixels and I have spent much of the last six years doing that here and there and mostly without numeric push-back, the counter-arguments tending to be thematic and not number based at all.

So why do they push this? Well simple, the Right cannot afford to have a Social Security system that is perceived to be working going forward. They can survive people liking Social Security as is, after all they can spin that as people just enjoying a Free Lunch via that ol’ Backwards Transfer pushed by the nice folk at AEI, that just helps their overall ‘mushy headed liberal’ narrative, a modern day Grasshopper and the Ant. What kills them is to find out that the Grasshopper actually has an actuarial sound insurance policy in his back pocket, and one guaranteed by the Federal government, such a realization might lead the rest of the ants to doubt the ‘Big Government is not the Solution, Big Government is the Problem’ message being spread by the Ant Queen and her Drones.

In 1993 the anti-Social Security narrative revolved around Trust Fund Depletion, which was a real event which would have real consequences, if not as significant as people would have them (see ‘Rosser’s Equation’ at a Google near you), but by the late 90′s Trust Fund Depletion had been pushed so far out in time even as the cost to address it steadily dropped that there grew the need for a new crisis narrative. And so ‘Phony IOU’ was born. But otherwise nothing much had changed, the definition of ‘crisis’ was malleable but the solution was always the same: we needed to Destroy Social Security in Order to Save It.

Typically people on the Left tend to assign three motives for the desire of the Right to ‘reform’ Social Security. One is to get their hands on the assets in the Trust Funds. This is a total category mistake, those assets though real as real are not tappable in the way this narrative would require. A second is to get their hands on surpluses going forwards. Well this is the same mistake with a slightly different twist, cash surpluses which were as real as real could be in 1999 are existentially different today. And a third motive advanced was the fees that would be generated on private accounts. Well I don’t think this pencils out as well as people would think at least for the accounts of people in the lower 50% of income, if it were a pure scheme for extracting account fees they wouldn’t be pushing for universality, but instead for opt-out for higher-income workers.

Nope in my opinion the fundamental motive for opposing Social Security is not driven by greed as such but instead an ideology that depends crucially on the perception that Big Government is always and everywhere a failure, and that the bigger the counter-example the higher the risk to that overall paradigm. If Social Security was just headed for the cliff, its enemies would just stand back and watch it go, arguably this is where they were at in 1993. It is only when they see the coach driver beginning to get the team under control and steer it away from the cliff that they have to jump in and try to spook the horses again.

Which is why people asking why the actions of Social Security opponents don’t seem to be particularly helpful in guiding the stage coach away from the cliff are asking the wrong question, looked at in that way their actions don’t make sense at all. On the other hand if you flip it around a lot of things become clear, there being more than one definition of ‘fixing’.

Tags: Comments (22) | |