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Bush needs to address straw man opponents on Social Security reform

Pres. George W. Bush comes and goes from Shreveport, leaving a number of newly-persuaded supporters of his plans to reform Social Security. As long as he stays on message, detractors should fail in their attempts to stop progress.

Even though the president hasn’t submitted a formal plan, his opponents concerning his trip to Louisiana have begun the wholesale manufacture of straw man arguments to try to distract and deflect the public intellect from understanding the problem as his plan. Presented here are several of them, and why they fail.

Here we have two for one. Although the main purpose of this author’s appeal, from the leftist Economic Policy Institute, is to argue that Social Security now as constituted does not discriminate racially against blacks, he also introduces two specious arguments against the plan. First, he notes that the chunk of Social Security spending that goes to the disabled portion of payments makes up a considerable portion of payouts and implies reforms put this at risk. Second, he applies the same argument to survivor benefits.

Regarding the first, the president has not suggested that the disabled portion of benefits be altered in any way. Note that the only conceptual difference between the disabled and the retiree portions of Social Security is that the disabled part can be triggered at a much earlier age (however, one must qualify with a sufficient 10-year work history and get medical proof that disability prevents one from working on a basis that could support oneself financially). The same trends will buffet this portion of Social Security as for retirees, but the same philosophical solution as for the other (transitional costs to make up the trust deficit plus voluntary shifting of funds to privatized accounts that in the aggregate will earn more, meaning greater funds left over to spread among those not shifting some of theirs to keep the system solvent).

While there is no change scheduled for the disabled, survivors actually will benefit more under the president’s plan. The dirty secret the author doesn’t reveal is that now, unless the recipient already is receiving payments, survivors don’t get them. Further, the 10-year qualifying work history requirement means someone could pay in for nine years, nine months, then dies, and all that contribution is swallowed into the system with the survivors never seeing a penny of it back. Under the president’s plan, from the moment any money is put into a privatized account, the survivors can get it back at any time.

Then there are these criticisms (interspersed among these letters), both parroting the Democrat mantra that there’s not really a problem. One argues the trust fund will not be “depleted” sometime around 2042, but only that prior to then any excess in the fund (presuming it has all been put back; see below) will have been drained and by this time outflows will be larger than inflows into the program, with the latter only about 80 percent of the former.

All true, but the author conveniently fails to point out that when this point is reached, the several hundred million dollars per year deficit being run cannot be allowed to exist. So, one or all of several things must happen, (1) cut overall benefits by raising the retirement age, (2) cut monthly benefits, (3) raise taxes on those working to support retirees, or (4) raise taxes on everybody (realistically, only the middle class and above), in order to make up the deficit.

(This gives us insight into the liberal Democrat mentality. To them, Social Security is not a crisis, but an opportunity, using the deficit as a method to justify even greater confiscation of the people’s wealth into the hands of the government. Never forget the liberal mentality is to control the people’s resources, thus their liberty, so they can control the people.)

The other asserts an easy solution to the problem, simply to remove the $90,000 cap on earning taxable to Social Security. The way the system works now, eventual benefits (assuming one puts in 10 years and makes it to retirement age; fails on both of these and you get nothing back) come in proportion to wages, but capped at $90,000. By getting rid of this ceiling, from some people much higher amounts will get paid into the system, reducing the looming deficit.

But then these advocates fail to take the next logical step, by raising also the eventual benefits received by these higher payers in proportion to the additional resources they put into the system, an alteration which will not do anything to change the system’s monetary problems. In proposing only increased payroll taxes but not increased benefits for those contributors, they perform a neat trick: they turn a system designed as insurance into one of wealth redistribution (once again exposing the liberal mind’s true agenda here). For that reason, this “solution” is unacceptable.

Then we have the comments of the brilliant Sen. Mary Landrieu, who has complained elsewhere that the transitional costs are not included by the president in his plan and here that an unspecified past “bipartisan” solution proved to work while the president’s ideas won’t.

Well, let me specify what she meant by the bipartisan plan in 1983 which she was afraid to put in print: that was a payroll tax increase, the last hike of 20 since the system’s inception. Once again, Landrieu would rather raise your taxes so she can get her hands on your money than support a system that empowers you as a citizen.

And, of all these straw man arguments, perhaps the biggest is that the president’s plan does not address transitional costs. The costs are those to pay back the amounts borrowed out of the Social Security trust fund by the government and will runs in the hundreds of billions of dollars. But the fact is whether the president’s ideas about Social Security reform ever make it into law, the transitional costs will have to be paid. They have nothing uniquely to do with his plan.

Bush need not concern himself with these flimsy critiques. He just needs to emphasize a plan with the following:

  • The privatization aspect is only partial and totally voluntary, and not even available to those 55 and older

  • The disabled will be unaffected by the plan
  • Survivors will benefit because any thing put into the privatization part will be entirely recoverable at any age
  • Administration costs will be much lower for the privatized portions
  • Returns will be greater because the funds into which the privatized portion can be put will be very stable and, taking historical data into account, over any 10-year period (mirroring the work history requirement) none of these investments ever has performed worse that the government’s return on Social Security monies

    With well over half the public now having their resources invested in ways just like Bush is proposing, if he stays on message, the public will see the disingenuous nature of these critiques and give majority support to his ideas.

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