Posted by: Donna
Matt Yglesias and Jamelle Bouie both have useful posts in helping to understand why conservatives want to dismantle Social Security so badly (why Dems may give in to their demands is whole ‘nother subject) and what is really at stake.
The Economy consists of adding up all the economically valuable stuff that happens. All the goods and services and labor that are bought and sold. And with most government spending, you can make some kind of case that the spending boosts The Economy. It boosts The Economy because we need infrastructure or educated workers or healthy ones. Even something like Medicare does something for The Economy because it subsidizes medical training and research. The Economy wants you to spend money on things that can be plausibly described as “investments” that drive future prosperity. And mailing a check to your grandma doesn’t fit the bill.
You’ve got this big scheme to levy taxes on working people who are participating in The Economy and transfer money to people who’ve dropped out of The Economy. They take that money and use it to pay the electricity bill and buy a cookie for their grandkids. If they didn’t get that money, they’d probably have to work longer and spend more years being part of The Economy. And they’d have to spend their working years being thriftier, and amassing more savings that (via the magic of the financial system) finance private sector investments in The Economy. So not only would lower taxes on The Economy spur more growth, but the mere fact of not sending your grandma those checks is good for The Economy. The Economy thrives on incentives (if you work, we’ll give you money) and desperation (if you want money, you have to work) and Social Security is a double-wammy, reducing the incentives of workers and reducing the desperation of the elderly.
Insofar that we’re even having a conversation over Social Security, it should be focused on those questions. In particular, it should be a discussion of whether we want to transform Social Security into a genuine retirement program, or leave it as a mere supplement to other income. I say the former; the decline of defined benefit pensions, combined with negative economic shocks, the volatility of 401(k)s, and the human propensity to consume rather than save has yielded a world where large numbers will lack the resources for a decent retirement.
Instead of working to answer those questions, we’re focused on ways to cut the program, which is to say, we’ve ceded the debate to the business leaders and their allies in government who see the program as an affront to the “proper” functioning of our economy. And let’s be clear, their vision of extremely bare bones income support is necessarily a vision for tremendous hardship—for the sake of more capital, they’re willing to turn the United States into a place where, if you’re poor or working class, you’ll almost certainly work until the day you die.
Peter G. Peterson is a billionaire hedge fund manager and, like other people who have amassed an ungodly pile of cash, he is devoted to a cause and spends millions of his own dollars promoting it. Except his thing isn’t de-worming poverty-stricken orphans or putting computers in every classroom. Oh no, Pete Peterson’s thing is that he is deeply upset that grandmas all over the USA are living too lavishly on that $1200 a month or whatever they get from Social Security. Peterson really has it out for that dastardly old age anti-poverty program, and the social safety net in general, but it probably wouldn’t go over too well if he admitted that openly. So Peterson endowed a thing called the Peter G. Peterson Foundation, which dispenses grants to people who come up with creative ideas to starve grandmas and others deemed useless eaters under the auspices of “solving fiscal challenges”. In other words, Peterson is a complete nut who should have no influence over public policy.
Yet he enjoys an abundance of influence right now, and has even managed to snooker some prominent Democrats and left-leaning think tanks, because once Barack Obama took office “the deficit” and “spending” emerged as the most important issues facing the country, at least as far as the Important People were concerned. Thus the time was ripe to push austerity and go after entitlement programs in the name of “balancing the budget”. So Social Security, despite adding $0 to the deficit, got put on the table as part of every Serious Plan – Simpson-Bowles, the “grand bargain”, the Ryan Plan, etc. Conservatives like Peterson are demanding cuts to Social Security for the simple reason that they hate it and the people on it, whom they believe to be useless to The Economy, as Yglesias says. As Jamelle Bouie says, we need to stop ceding the debate to guys like him.
Leave a comment