Sunday, February 13, 2005

More about FICA

Yeah, I know. Numbers is about the only thing more boring than politics, and the Social Security debate is awash in both.
Unfortunately, the national debate is the equivalent of a head of household taking care of similar boring details like bank accounts, wills, and keeping lifestyle in line with available income.

Matthew Yglesias has put together a few caveats that deserve study.

It's no shame that the vast majority of conservatives haven't thought through the detailed economic questions here. Doing that sort of thing simply isn't the job of "most people." It's outsourced to a small community of specialists. But what's telling is how hollow the small community of specialists is at its core. The rank-and-file are deferring to talk radio hosts and the like who are, in turn, deferring to more highbrow pundits (this is, I think, the sort of role I play in my small way on the left). The pundits think they're deferring to a bunch of trusted experts somewhere who've run the numbers. But it turns out that no one has run the numbers. It's a systemic breakdown throughout the movement with regard to the single largest program the federal government runs.

I have no intention of reducing to a couple of lines what it took him a longish post to explain.
His point is simple, however. The numbers being tossed about about "transition costs" are poorly arrived at and potentially inaccurate on several levels.

FDR wanted to design a program such that "no damn politician" would ever be able to eliminate his Social Security. You can think him a bastard for having done this, but the sleight of hand involved (known technically in the business as the legacy debt) was implemented in the 1930s and 40s and can't be wished away without the deployment of a Magic Privatization Time Machine. Roosevelt was very clever, and created a system that later generations can only dismantle at enormous cost that his foes aren't willing to grapple with.

And boy, did he ever succeed. In this year of the cock, according to the Chinese lunar calendar, the chickens are coming home to roost.

It seems to me that the country is at a point - to continue the comparison with family budgets - that it is no longer feasible to trade cars every season, strut about in the latest of fashions, look askance at store brands and plan expensive vacations two or three times a year. The time has come for the country to look more closely at how it' s tax revenue is being mis-spent, and start taking care of its aging parents like the rest of us.

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