Thursday, June 09, 2005

What does Bush really want about Social Security?

Is Bush really giving up on private accounts? Maybe. But he is not giving up what he wants.

Josh Marshall has the issue pegged.

"What President Bush wants is to phase out Social Security. That isn't just rhetoric or words designed to put the other side off their footing. It's really the truth of the matter. Social Security is a social insurance program with guaranteed benefits for Americans when they retire -- benefits of a level to provide a baseline of support in old age. The very concept offends the president, as it does many of his supporters. The key is guarantees, which are the essence of security.

"Privatization was the first and most obvious way to phase out Social Security. If privatizing doesn't work, he may try just going at it directly -- not just by cutting benefits, per se, but by cutting the rate at which Social Security keeps up with the actual costs of living in the United States. And that distinction is key since over time it will be whittled down to nothing."

Bush has gotten his head handed to him on private accounts. It was a conservative "neat idea." It is clear now that it won't fly. He will simply go to other, less obvious ways of phasing out Social Security, as Josh goes on to describe.

At its base conservatives what to phase out Social Security to shift risk from the government to the middle class and poor. By doing this they can reduce the expense to government and permit the wealthy to face lower taxes. It doesn't matter to them that many of the poor and middle class will end up worse off because of this abdication of government responsiblity.

This is oddly exactly the opposite of their arguments why laissez faire capitalism is good for society and government intervention is bad. The essence of that argument is that unfettered business is much more capable of quickly responding to changes in the market. So what do the conservatives want to do?

They want to remove uncertainty and risk from businesses and the government by shifting it to labor. Yet it is businesses and government which are large enough to deal with unpredictable changes in the markets by spreading the risks over time and larger numbers of people. Individuals are much less capable of dealing with those changes.

Labor cannot efficiently deal with the all of the risk and uncertainty in society and the market. The safety net, including Social Security, is necessary to allow labor to focus efforts on their jobs instead of simply survival. It allows labor to get the benefit of spreading risk to many people.

But that is my attempt to get to the basic reasons why Bushs' desire to destroy Social Security guarantees is bad for society. Go read Josh Marshall for his excellent analysis of the current political tactics Bush appears to be using to phase out Social Security.


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