Thursday, January 06, 2005

One last try at Social Security

The NY Times and the ever reliable Paul Krugman have run good pieces on Social Security in the last week. (Why does The Note dismiss my man by calling him "one-note Paulie," especially in view of the monotony purveyed by that in-house organ?) Some fundamental questions remain.

These are, what are the purposes of privatization? I've heard only four, although all are framed by the "crisis" in funding of Social Security. The near term arguments are (1) we solve the funding problem by diversion of monies to private investment accounts; (2) "it's your money," so you should be able to do what you want with it. Diversion to private investment accounts is stupid because we can get the same results--higher returns on the money invested by the Trust Fund--without relinquishing the principle that animated the original New Deal move (we are our brother's keepers, also our sister's, our parents, and, in this case, our grandparents'). We do this by investing, say, 2% of everyone's contribution in riskier, higher-yielding assets than government bonds, but we do it through public (non-profit) auspices, not through Wall Street.

It's NOT your money, so get over it. Unless you want to live on an island you own, where you do all the "upkeep," stop pretending that taxes are by definition a bad idea. Do you want to live in a jungle? Try a tax-free state, where there are no social services, no public education. Christ, the so-called less-developed countries realized about 30 years ago that either they advertised their emergent infrastructure, a product of public policy, or they couldn't attract foreign investment. Is the US exempt from this developmental logic? Does Hobbes read as a contemporary columnist?

The other arguments in favor of privatization are more perverse. They go like this: (3) we will increase savings if we allow for private accounts rather than Social Security, and (4) we want to dismantle the New Deal as a relic of a static, state-centered past. The last argument is usually not made explicit except in the company of real men like Grover Norquist and Antonin Scalia, the guys who are willing to say, yes, we're smarter than the rest of you poor fucks, and we're going to engineer a world in which you won't have much to say about the future. But it is impending, it is implicit, in every argument against Social Security as a public project. Watch out. They're coming for you, and yes, they still beat off.

Ah, as for increasing savings. Why? If the "ownership society" Bush wants will increase savings rates, we'e all in for a real nightmare. The LAST thing we need is increased savings rates, no matter what the pathetic Peter G. Peterson keeps telling you. The best brace for economic growth in our part of the world is increasing consumption, NOT SAVING, as the figures and the forecasts keep telling us.

The key question then becomes, why don't we need more saving for more growth? Glad you asked.