Friday, November 16, 2007

Krugman on Social Security

When it comes to Social Security, today's column by Paul Krugman has him not-so-happy with one of our frontrunners. The column is titled Played for a Sucker. Obama supporters may want to avoid this piece.

But the “everyone” who knows that Social Security is doomed doesn’t include anyone who actually understands the numbers. In fact, the whole Beltway obsession with the fiscal burden of an aging population is misguided.

As Peter Orszag, the director of the Congressional Budget Office, put it in a recent article co-authored with senior analyst Philip Ellis: “The long-term fiscal condition of the United States has been largely misdiagnosed. Despite all the attention paid to demographic challenges, such as the coming retirement of the baby-boom generation, our country’s financial health will in fact be determined primarily by the growth rate of per capita health care costs.”

How has conventional wisdom gotten this so wrong? Well, in large part it’s the result of decades of scare-mongering about Social Security’s future from conservative ideologues, whose ultimate goal is to undermine the program.

Thus, in 2005, the Bush administration tried to push through a combination of privatization and benefit cuts that would, over time, have reduced Social Security to nothing but a giant 401(k). The administration claimed that this was necessary to save the program, which officials insisted was “heading toward an iceberg.”

But the administration’s real motives were, in fact, ideological. The anti-tax activist Stephen Moore gave the game away when he described Social Security as “the soft underbelly of the welfare state,” and hailed the Bush plan as a way to put a “spear” through that soft underbelly.

Fortunately, the scare tactics failed. Democrats in Congress stood their ground; progressive analysts debunked, one after another, the phony arguments of the privatizers; and the public made it clear that it wants to preserve a basic safety net for retired Americans.

That should have been that. But what Jonathan Chait of The New Republic calls “entitlement hysteria” never seems to die.


Which brings us back to Mr. Obama. Why would he, in effect, play along with this new round of scare-mongering and devalue one of the great progressive victories of the Bush years?

I don’t believe Mr. Obama is a closet privatizer. He is, however, someone who keeps insisting that he can transcend the partisanship of our times — and in this case, that turned him into a sucker.


We all wish that American politics weren’t so bitter and partisan. But if you try to find common ground where none exists — which is the case for many issues today — you end up being played for a fool. And that’s what has just happened to Mr. Obama.

There's some more good commentary on the Social Security issue here.


Curtis said...

Bruinkid, it's not only about finding common ground, but also creating common ground. That's what the 2008 campaign, and every other presidential campaign, is about--leadership! Perhaps after nearly eight years of George W. Bush, we have all forgotten what political leadership looks like.

I also don't see the virtue in opting for a pessimistic view that working with Republicans is impossible. As Joe Biden pointed out in yesterday's debate, there are plenty of Republicans in the Senate who oppose Bush's strategy (or lack of strategy) in Iraq, but due to party politics, they are too timid to oppose it forcefully. When we have a new president in 2008, whether it's Hillary, Obama, or Edwards, I think there will be significantly more bipartisanship on changing course on Iraq. That's not even optimism; that's just politics.

I also think it's unfair to singly attack Obama on calling for bipartisanship to fix social security. The Clintonians can correct me if I'm wrong, but I'm fairly certain that Hillary has also called for the creation of a bipartisan commission to come up with a solution for social security.

On the whole, I agree with Krugman. There isn't really a social security crisis. There is no impending social security apocalypse. However, that does not mean that inaction will suffice, which even Jonathan Chait admits. Ultimately, something will have to be done about social security. When it runs dry, policymakers will have to raise taxes or legislate some other kind of adjustment. Bruinkid and Krugman gloss over this aspect in their arguments.

By the way, Krugman totally ripped -off Jonathan Chait's "TRB" column in late October's edition of The New Republic. The only difference is that Krugman added some Obama bashing and left out the fact that even though there may not be a social security crisis, something will still have to be done in the future. If you're going to regurgitate someone else's arguments, you should at least have the decency to regurgitate the finer points of their argument as well. This is one of the most disappointing Krugman articles I've read. I usually really dig his writing, but this column is a heaping pile of bullshit.

Brandon Harrison said...

Anecdotally, I'd argue there is a Social Security Crisis. My girlfriend works for a Social Security Law Firm in Los Angeles and often is in charge of scheduling hearings. Unfortunately for many disabled people, there are not enough hearing judges to efficiently process Social Security Applicants because Social Security is underfunded. Most people must wait a year for a hearing, and when you have a serious life-threatening disability a year is just too long.