You're more liberal than conservative. I'm more conservative than liberal. Bless your heart, I agree with all of your points. At the end of the Cold War, other conservatives were making the same noises that you're making now. For their pains, their careers were destroyed by the people who run the current mainstream conservative movement. Let's take a look at those points of yours.
Points 1 & 2. Cut defense spending and all of the cool people will call you an isolationist. Sure, argue rationally all you want; the name will stick. Also, remember that the United States is bound by treaty to defend more than two dozen nations. That includes keeping bases in some of those nations. Those treaties will have to be renegotiated. Those nations will have to increase their own defense spending. Many of those nations have budget problems of their own. Have fun.
Point 3. Touch social spending and the cool people will call you a heartless bastard who cackles at the sight of starving widows in between gulps of baby orphan blood. Sure, argue rationally all you want; the charge will stick. Of course, this doesn't solve the money problem. Iceberg? What iceberg?
Point 4. Social Security is the third rail of American politics: If you touch it, you will die. Sure, argue rationally all you want. It will help as much as it ever has.
Long story short, the bureaucracy rules us. The administration of administrators who administer the other administers who supervise the people in charge of those who actually get real work done cannot make any concessions to reality. It would be like Gorbachev loosening the grip of Communism; one exit through the Iron Curtain and it's all over.
The Cool People will double down. They will continue to double down until it is physically impossible for them to continue doing so.
Thanks. I have no refutations to any of your comments. I know exactly what you mean.
One interesting thing about your first statement, "At the end of the Cold War, other conservatives were making the same noises that you're making now". A few years ago I had the opportunity to hear Francis Fukuyama speak. He was the author of The End of History and a later follow up book. I never knew it before then, but he was one of the founding members of the Neo-conservative movement. It was originally started by him and a group of like-minded sorts around a cafeteria table in some ivy-league college (Princeton maybe?). He went on to talk about how the ideals of what they founded were adopted and warped beyond recognition by the Evangelical Christian community in the U.S. and by other conservatives. What was remarkable about the talk was that at the end, he essentially repudiated everything he had originally written in The End of History.
I remember stories my grandparents told of growing up during the Great Depression. I also remember stories from my mom's family of 7 kids growing up poor in Rochester, NY in the post-war era. Perhaps I've inherited an attitude of bite-down and deal with reality from their history.
When Fukuyama was talking about the Evangelical Christians, I think that he meant their doctrine of "The Rapture" and how it motivates their support for Israel. It's scary just how much of their politics rotate around that. Seriously, Christopher Hitchens (yes, that Christopher Hitchens, the atheist) can get published in National Review because of his support for Israel and for wars to bring democracy to the Middle East. Meanwhile, the paleoconservatives (the guys who opposed these wars) have been airbrushed out of the conservative movement; vaporized, in the Orwellian sense.
It's downright eerie.
And it's gotten to the point where "extreme" right-wingers like Pat Buchanan are saying that the bankers and corporate executives are ruining America. Paul Craig Roberts, assistant secretary at the Treasury under Reagan for crying out loud, the guy who helped implement supply-side economics, sounds more like Noam Chomsky than George W. Bush, these days.
The string-pullers behind the conservative "movement" see the Evangelical Christians for what they are -- a bunch of easily fooled suckers. (Especially the non-denominational types) They are insecure, fearful people who respond to the crazy message that's being sold.
One of the big motivations behind the pushing of non-denominational, stupid christianity as you get these large flocks of people attracted to the personality of the leadership of their church, but there's no doctrinal basis. The Catholics or Lutherans have their issues, but they won't allow the psychotics to retain power within their religion.
Not necessarily. The traditional conservative nutjob string pullers are people who own natural resources. They are getting very rich right now -- and that's about all they care about.
The traditional patrician Republicans are getting owned.
So complaining about extremist theocrats is crass if they call themselves Christian, but civilized if they're Muslim? It doesn't matter what religion it is, it's still a destabilizing influence on what's supposed to be a democracy.
And Fox News had such a clear role in making the Tea Party into a meaningful political force that commenting on the connection isn't necessarily even a political statement - it's a historical statement.
They are insecure, fearful people who respond to the crazy message that's being sold.
I wonder if the powers that be have been purposefully trying to jam media with lots of spurious messages about, "The Truth Behind The Lies," most of which are structurally similar to actual such messages, but otherwise are just junk.
you get these large flocks of people attracted to the personality of the leadership of their church, but there's no doctrinal basis.
Really, this sort of thing isn't that unusual. In places in the US like Cincinnati, with large populations having immigrated generations ago from Ireland, Germany, and Eastern Europe, you have large numbers of people who call themselves "Cultural Catholics." Do they agree with all of the doctrine of the Catholic Church? Heck, a quite a number of them disagree with most of it. Attendance at mass is really just one way they identify their group.
Given that much of the motivation for religious practice is really group affiliation, it's no wonder there's a lot of it organized around personalities.
> I also remember stories from my mom's family of 7 kids growing up poor in Rochester, NY in the post-war era. Perhaps I've inherited an attitude of bite-down and deal with reality from their history.
I have not much to add to your excellent comments, I just wanted to give you a heads-up. I grew up in a former Eastern-European country, and my childhood and teenage years were very much marked by the economic collapse of the post-communist years.
First, regarding the reducing of military spending by the US, I can still remember reading a very beautiful Soviet propaganda magazine in 1989 (with colored pictures and all) about how happy everyone was that the Soviet Army was getting out of Afghanistan and how about everyone will be happy. Then 1991 happened to them and the Soviets disintegrated under their own weight, in many cases leaving military units stranded in foreign territory because the money had just run out. I don't know what the moral of this story should be, maybe that it is never too early to cut military spending. You (the Americans) should do it now.
Second, I have nothing intelligent to say about your health-care system, but regarding Social Security I hope that you, the American people, will find a bunch of decent politicians willing to sacrifice their political careers over this. The reason being that when the money will run out (and at this rate it will definitely run out) no amount of blaming the other party or of accusing the Chinese or the Martians or whatever will make up for the fact that Government-run agencies will have no money to actual do their jobs (and no, inflation, i.e. indefinite printing of money will not help solve this, it will only make it worst). Again, I saw this happening in my country, ~20 years ago, social services going the way of the shitter and basically the entire Government-run infrastructure crumbling on its own weight. It wasn't funny at all.
Those horrible evangelicals and ... some other conservatives. Fukuyama chose a safe target. (Or not. I didn't listen to the speech.)
"Time magazine's Joe Klein has suggested it is legitimate to look at the religion of neoconservatives. He does not say there was a conspiracy but says there is a case to be made for disproportionate influence of Jewish neoconservative figures in US foreign policy, and that several of them supported the Iraq war because of Israel's interests, though sometimes in an unconscious contradiction to American interests:
"I do believe that there is a group of people who got involved and had a disproportionate influence on U.S. foreign policy. There were people out there in the Jewish community who saw this as a way to create a benign domino theory and eliminate all of Israel's enemies....I think it represents a really dangerous anachronistic neocolonial sensibility. And I think it is a very, very dangerous form of extremism. I think it's bad for Israel and it's bad for America. And these guys have been getting a free ride. And now these people are backing the notion of a war with Iran and not all of them, but some of them, are doing it because they believe that Iran is an existential threat to Israel."[75]"
I know I'm invoking Godwin's Law here, but wasn't "The Jews pushed Germany to WW1 and broke the economy" one of Hitler's excuses/propaganda peices? What's the difference between this argument and hitler's?
Why do you - as a conservative - consider it rational to cut social security? The program is popular and self-sustaining. and if you read the trustees' reports you'll see it has been in surplus and perfectly solvent since 1985. In a few years it will stop generating surplus revenue for a few decades as the baby boomers move through the system, but it isn't threatened with insolvency.
There is an ethical problem with using surplus social security revenues to fund tax cuts to non-contributors and then claim there isn't money left to pay back the workers who contributed in good faith. But this isn't a problem with bureaucracy so much as a problem with the Republican Party.
First, both parties have raided Social Security, not just Republicans. In fact, both parties have been complicit in the government's financial misfeasance for a long time.
Second, you mention the money "to pay back the workers who contributed." There was never any money to pay back. Social Security was always a pay-as-you-go system. Current revenue pays for current appropriations. There was never any "trust fund," another fact that smoothed the way for Congresscritters to raid Social Security and replace the surplus with Treasury IOUs.
This system was feasible when there were ten workers being taxed for each retiree receiving benefits. With the graying of the Baby Boomers, that ratio will approach parity. Another commenter on this thread mentioned that the best thing to have done to Social Security would be to build an electric fence around it. A good idea. Too late. Congress has fleeced it.
First, you're right, both parties have diverted Social Security surpluses. But only one party -- the GOP -- is trying to avoid paying it back, using the SS deficit as a tool to dismantle or alter the program.
Second, that doesn't change the social contract we have with people who have spent their entire lives paying out up to $6000 a year in wages to the fund.
Third, yes, while baby boomers retire, it will run a deficit. But if the surpluses over the last SEVENTY YEARS hadn't been diverted to the general fund, they'd have enough in the "lock box" (that Al Gore advocated for in the 2000 election) to pay for 'boomer retirements.
Look at the predictions made by FDR's guys in 193(4?) about social security. They are surprisingly correct. They saw this coming. The only thing they didn't do is force a segregation of funds.
>Second, that doesn't change the social contract we have with people who have spent their entire lives paying out up to $6000 a year in wages to the fund.
A good reason not to trust the government to keep a forced retirement account on your behalf. Someone is going to get the short end of the stick here eventually.
I would prefer that people own up to this and we set up an orderly, phased dismantling of the program, but that doesn't seem very likely. Politicians and head-in-the-sand populace apparently insist on a single disastrous collapse that leaves millions insolvent rather than admitting and accepting that there will be some controlled loss involved in a phaseout.
As opposed to forced retirement accounts you manage yourself? Make no mistake, no sane government would allow for completely voluntary contributions to any sort of pension or superannuation scheme - it'd be setting its country up for a massive economic and social timebomb as the majority of the population put present wants over future needs.
As for investing pensions in the stock market, I'll merely add that in Australia, where we've had superannuation for 20 -odd years, all usually invested in stocks, there were are a large number of people who thought they were going to retire in 2008 (my parents amongst them) who are now still working.
I strongly disagree that retirement accounts should be mandated by the government. If people won't save for retirement, they should understand that the government can't help them. This philosophy that the peon is too stupid and/or undisciplined to manage his own accounts and that the government must protect him from himself is what gets us into huge messes like this in the first place.
I understand this point of view, but at the end of the day, government policy needs to be based on what's going to work out the best for the public. It perhaps goes without saying that there are more than two approaches, but yours is one that I think we can rule out logically.
Psychologically, does it work? In general, if you tell a 22-year-old that in 40-something years he's going to really need some of the money he's making now (even if he feels like he's barely paying his bills), that he absolutely must set aside enough (and invest it wisely, assuming he has the wisdom to do so), will he manage to do it?
From what I understand of human psychology, the answer isn't "yes" nearly enough to make your solution palatable.
It sets up a good learning experience for him when he finally gets to retirement age and finds himself as a greeter in Walmart, but it's way, way too late at that point.
No one wore seatbelts before they were legally required (and still many don't, and many still die because of that dumb decision). People don't, as a rule, have a good grasp of the distant future and/or events that seem unlikely. How many people are still starting smoking, even though it says "cigarettes kill" in big black letters on that first pack they buy?
There are plenty of problems with the US social security system, but removing the safety net entirely to teach a lesson to people who fail to adequately prepare for their old age doesn't feel like a sound approach to me.
And whose idea of "best" do we use? The government is about ensuring a framework of freedom for its citizens to operate within, and if the citizenry refuses to be productive or healthy there's nothing the government can do about it.
Do you support alcohol prohibition? Alcohol leads to much more damage than even smoking from an emotional and psychological perspective.
What if, one day, the government decides that people who buy Japanese cars are a danger to themselves since they are costing the American car companies so much money by refusing to buy home-grown goods? The people just don't have the foresight to understand that buying Honda today means depression throughout Michigan tomorrow. Shouldn't we protect people from that eventuality by ensuring that they only buy domestic vehicles?
How far do we take this? Why do we believe that the politicians have such a heightened sense of foresight and such impeccably unselfish motives? I don't vote for people so they can do my thinking for me, I vote for people who I think will best represent important core principles, like retaining individual free exercise of conscience (like the choice to buy American or foreign cars, even if it will cost Michigan a lot of jobs).
The attitude that we need the government to protect us from our own decisions is in fact extremely dangerous and insidious. Old people survived for thousands of years before the implementation of social security -- if the industrial society doesn't support old people well enough, we have to tweak it so that these things work instead of doing these grotesque hacks of taking > 10% of an average person's salary every year to pay to support your grandpa's RV tour of the US.
We don't use someone's idea of "best" purely based on their opinion. We make changes at a small level, we run studies, we actually find out what works, and stop futzing around with half-baked ideas of what will do what 20 years from now.
This is partly why I hate political discussions as-they-are-played... everyone has such strong opinions based on incredibly tenuous links to actual history, studies, etc.. Just "this is how it is, how it has always been, and if only I were in control I'd have this all tidied up right quick."
Of course I don't support alcohol prohibition. Haven't we tried that? Did it work? Also: we weren't talking about making smoking illegal, just about human psychology, and how people aren't logical. To actually give people better lives requires science, not "more laws" or "fewer laws".
I don't disagree with you on your other examples, generally, but I'll refrain from offering other examples that are obvious in the other direction... it doesn't get us very far.
"I don't vote for people so they can do my thinking for me" -- I half agree with this. I will gladly vote for someone who has thought and researched more deeply on important topics than I have, provided they can explain themselves and advance my own knowledge. In the end we are responsible as citizens for who we elect, so I do agree it's not much use to be snowed by anyone who uses big words or says they have the solutions.
For core principles, though... this is much trickier. Principles, in abstract, are useless. I agree totally with some of my older relatives' politics, when we talk only in terms of principles ("we need better education! critical thinking!"), but when we get into applying the principles we're miles apart.
"Free exercise of conscience", what does that mean in terms of specific issues? We should rely on lynch mobs instead of police? Citizen militias to take out unfair monopolies?
I'm in favor of encouraging responsible citizens who can think critically. I'm not at all convinced that your suggestions (inasmuch as I've seen them) would do that, based on what I know of human psychology.
I also have a suspicion that your idea of what social security payments will cover is a bit overblown. I don't have any living grandparents left, but my father is losing his house and has no medical insurance, in spite of social security.
Somehow, the Federalists have managed to change the conversation from, "should the state provide this service?" to, "should the government provide this service?" I don't quite understand why the state governments should not make their own choices, and people can move to the states that they find have the most acceptable laws to them.
I like the idea of removing power from the federal government in favor of states, but in the case of a service like social security, mobility between states could cause massive issues. State x would not have a safety net, prompting companies and workers to operate there for the tax break. State y, providing a safety net, would be swamped with retirees but not productive workers. Citizens would be hugely incented to game the system. I don't see how it could be sustainable.
If the discrepancies between state policies were large enough, I imagine you'd basically see white flight on a national scale. Essentially, supporting any type of social safety net would be optional for the people with the resources to move out of state. As a result, middle-class and wealthy people would flock to low-tax states without expensive social programs, leaving behind a higher concentration of needy people in the states with the stronger safety nets. What social programs remain would presumably go bankrupt while the nation's wealthiest individuals basked in the glory of their virtually tax-free lifestyles.
That is largely not the case with your neighbors to the north. In Canada only 1/3 of taxes are collected at the federal level, and some of that money is distributed to the provinces to spend (poorer provinces get a larger proportion of payments so they can provide similar services as richer provinces).
While there is some migration to the richest province, that has more to do with jobs related to the oil boom there, and the low taxes there are due to oil revenues.
One possible counterargument to the state-specific approach is that if you have a handful of states that really do well, a majority that do okay, and a few that really screw things up, it's unfair to the residents of the states that chose poorly. They may never be able to move to a better state because the decisions of their current state left them in a financial position too weak to afford life in a different state.
So what do we do with people at the end of their working years, who, through bad luck or bad design, ended up with nothing. Do we stand by and let them suffer and die?
This is not an issue for the government to address. I don't think that people should let them stand by and die, but good governments don't have the powers necessary to give out free money to people they think deserve it. Communities would be expected to handle it in the way most palatable to them. How much more room would Americans have for charity if their paychecks got 50% fatter due to eliminating income and payroll taxation?
There's an interesting argument from Friedrich Hayek (who's usually considered libertarian-leaning) that that approach is actually less pro-individual-liberty than a government safety net is, because it coerces people to stay in collectivist-type communities like ethnic groups, churches, etc., even if they would prefer to leave them, due to the dependence on the safety nets those groups provide. He argues that having a minimal government safety net would give people more freedom to choose their associations within society, since e.g. leaving the Mormon church would no longer mean losing your main safety net.
You could devise a means tested welfare for elderly people. There are a lot of perfectly wealthy, perfectly capable people who retire at 60 whatever for no apparent reason other than ss and tax advantaged accounts make it seem like its time. I am a big fan of retirement, and I think safety nets for the disadvantaged are a good idea. I don't think we need a retirement safety net, however, or to make a retirement an entitlement.
The trouble with means testing is that you drain support for the program from the parts of the population with the most political clout. In other words, how long does SS last when rich people get nothing for what they put into it?
I've always viewed Social Security more like catastrophic insurance than a future income stream. What do you get out of insurance? Hopefully, nothing because if you find yourself needing to exercise it, something has not gone according to plan.
I agree with means testing, but think it would have to be something that slowly phased in over a long period, and proportionally to smooth discontinuities so that people could shift their behavior to match expectations.
Actually retirement accounts are demand leakages. For example quantity theory of money gives us MV=PY money * velocity = prices * quantity of goods/services produced. So if money is squirreled away in retirement accounts it is no longer circulating in the economy and in order to maintain the same level of economic activity we have to 'make up' for the lost M. So retirement accounts are a drag on the economy.
Retirement accounts aren't usually held entirely in cash except very near the end. For younger people the bulk would be invested in equity i.e. funding businesses and thus being fed back into the economy.
Its money taken out of circulation that could have otherwise been spend on consumption. Buying IBM stock in my IRA doesn't do much for the economy compared to taking the same funds and buying an IPAD or 100 happy meals.
A legislative body can't force a segmentation of funds on their own! (I always laughed when my state legislators promised to do this.)
Such a decision is overridable by 50%+1 of the legislative body--that same number that is would take to spend the money.
Okay, yes, a constitutional amendment would work, but I suspect most legislators proposing a "wall" like the one in question would be lukewarm to the idea.
How, exactly, do you propose "paying it back"? Social Security is already a TERRIBLE deal for current workers. The only options are to either limit benefits to retirees, who are already getting more than they paid in (payroll taxes are higher now than they were before 1983), or to make Social Security an even worse deal by taxing current workers even more.
1. Social security reform was a core part of the Democratic platform in 2000. "I will keep Social Security in a lockbox, and that pays down the national debt and the interest savings I would put right back into Social Security." (Al Gore, Oct 4, 2000). Put simply, the Democratic policy aim was to divert the surplus into paying off the debt while preventing lower interest rates from spiking government borrowing/spending by also putting interest savings into the trustee account. You can compare this with the Republican plan at your leisure.
2. Your characterization of the "feasibility" of the social security program is wildly inaccurate. Seriously, instead of turning yourself inside out trying to claim that Republicans didn't setup a system that had workers pay MORE into the system than they were taking out for 30 years, why not just roll back the Bush tax cuts and call it a day?
I think it will take more than rolling back the Bush tax cuts. If no entitlements changes are made, it would take roughly twice the GDP of the entire world:
"Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent." –Richard W. Fisher, Dallas Federal Reserve President, May 28, 2008 [1]
I agree that Americans pay far more for health care than they should. I agree that Bush's medicare giveaway to industrial pharma was grossly irresponsible and that it has contributed a massive amount to the crater that currently is US fiscal policy. And I do not honestly know how people who consider themselves conservatives could support either that or the tax cuts, especially when the United States was on course to actually pay off its national debt.
Returning to the issue of social security, the statistic Fisher cites comes from Table IV.B6 of the trustees’ report, which is extremely conservative in its assumptions (assuming essentially zero productivity growth over the next 50 years) and thus - even at the worst - would require only a minor tax addition to permanently solve without reducing benefits.
I do not much like your suggestion that since the Republicans instituted tax cuts the surplus is gone and there's nothing we can do about it, but will add only that if Gore's proposal had been adopted (Republicans at the time were championing the terrible idea of dumping social security funds into the stock market while cutting top-end taxes), even the "infinite horizon" figure would be nowhere near where it currently is and it would likely be possible to reduce the payroll tax or increase benefits. And given all this, I don't know how to reconcile your claim that this is not a Republican problem with the fact you claim to be a rational fiscal conservative.
I quite agree with you (and Fisher) that the Social Security system's problems are solvable (you might have confused me with winestock). My point was that SS is a distraction–Medicare dwarfs the other entitlement liabilities–and it will take more than rolling back the Bush tax cuts to bring about budget surpluses.
Social Security has very well defined costs that are manageable if you implement some reforms.
Medicare is a another story altogether. Fact is, a 1960-style PPO for every old person just isn't sustainable when health costs rise like 13% per year.
You do realize that most Treasury IOU's are also called bonds, right? There are also two trust funds that comprise social security: the old-age fund and the disability fund. They each buy special issue securities from the government, but have also bought public bonds in the past. The securities have always been paid back with interest. If the Federal gov't ever didn't pay one of these securities, it would be a default by the gov't.
It would be interesting if these funds could invest (limited amounts) in some other type of security, but for now, they are limited to Federal securities. Imagine the sway on the market a $2.7 trillion fund would have.
The bonds will be paid, but future Congresses can decide at any time to cut benefits to recipients. That's the conflict. Perhaps analogous to lending your boss a large amount of money-- he now has the incentive to cut your wages so that he can more easily pay back the loan.
Also, remember that the United States is bound by treaty to defend more than two dozen nations. That includes keeping bases in some of those nations. Those treaties will have to be renegotiated. Those nations will have to increase their own defense spending.
Not having read the North Atlantic Treaty, I don't know that the US has any special obligation above and beyond the rest of the NATO members. Yes, the US is obligated by treaty to defend Latvia, but by the same token Latvia is obligated by treaty to defend the US. American deployments to Europe are likely above and beyond American treaty obligations.
the US is obligated by treaty to defend Latvia, but by the same token Latvia is obligated by treaty to defend the US
And, in fact, the only time that Article 5 of the NATO treaty -- the mutual self-defence article -- has been invoked was after 9/11, when the US used it to drag the rest of NATO into Afghanistan.
He said, "A good chunk of the post-9/11 air patrols in North America were flown by allied aircraft."
The article says:
" Five NATO planes have arrived at Tinker Air Force Base in Oklahoma City, Oklahoma"
and:
"Most of the United States' 30 AWACS, based at Tinker, have been flying around-the-clock surveillance of U.S. airspace..."
In my opinion, the phrase, "a good chunk of" is dubious. In a few minutes of Googling, I could find no indication of how many missions (if any) those NATO planes flew.
Not true. NATO staff discussed Article 5, decided that it was appropriate, spoke to Colin Powell, who supported it, and by the time the NATO council met to approve the draft statement concerning Article 5 George Bush had also signalled his support for it.
I wasn't denying that NATO passed Article 5 for the first and only time in its history after the 9/11 attacks, and I wasn't denying that the US supported it. I was referring to the arm's length at which the Bush Administration held our NATO allies during the early stages of the Afghan war. The resulting hard feelings made it more difficult for Bush to get cooperation from those same allies during the run up to the Iraq War. This is a fact and was a common talking point at the time among liberals and others critical of Bush's foreign policy.
Fred Kaplan:
"Aside from letting a handful of NATO's AWACS radar planes come help patrol American skies, Bush's response was a shockingly terse: Thanks, but no thanks; we'll handle it by ourselves. Marc Grossman, the undersecretary of state for political affairs, later admitted to the Washington Times that the United States initially 'blew off' the allies. Douglas Feith, the undersecretary of defense for policy, said that the United States, in the Times' words, 'was so busy developing its [Afghanistan] war plans that it did not have time to focus on coordinating Europe's military role.'
"The effect, of course, was to alienate the allies just as they were rediscovering their affections. As London's conservative Financial Times later put it, 'A disdainful refusal even to respond to a genuine offer of support from close allies, at the time of America's most serious crisis in decades, spoke volumes about its attitude to the alliance.'"
(The similarity between the "thanks but no thanks" phrase used by Kaplan and the one used by me is a complete coincidence. I found this article this afternoon when googling for something to support a rebuttal.)
The thing with Social Security is that it's such a huge, tempting cookie jar for Congress to reach into -- remember that this is a program that easily runs a surplus when we just leave it the hell alone. So instead of cutting it, how about we build a big damn electrified fence around it? ;)
Except for the gaping hole in the fence, which dictates that the trust funds have to invest in Treasury bonds. Which means the money goes in and straight back out again, and that threats of default carry an implicit threat of "Social Security won't be able to pay out".
Thus far the risk of investing the SS surpluses into any investments other than US treasuries far out-weighed the risk of the US choosing to make SS forgive the debt incurred by said treasuries.
I've often argued that SSA should be allowed to invest some portion of the surplus (perhaps 10-20%) in AAA-rated municipal bonds. Perhaps the downgrade today will prompt more people to consider this.
Isn't reducing the conflict of interest a small price to pay for slightly higher risk? Currently, Congress can "save" money by cutting benefits to Social Security receipients and use that money to pay off the bonds owed to Social Security.
Congress can't actually divert revenue from SS. The way that cutting benefits affects the budget is that the SSA uses more of the payroll tax to buy more bonds, rather than paying the revenue out as benefits. The government still has to use non-SS revenue to pay off prior SSA-held bonds. Thus, once SSA collects less from the payroll tax than they need to pay out (which will happen soon, and may have already happened due to the Making Work Pay tax cut), cutting benefits will not reduce the budget deficit at all, because the SSA will need all of the revenue from the payroll tax and all of the revenue from its maturing bonds to pay out benefits. In order to use any payroll tax revenue (via SS bonds) for non-SS programs, they would have to make unrealistically large cuts in benefits. So, in short, that well will run dry soon enough, and you won't have to worry about it.
your choice of words suggests that you're a follower of thoroughly-discredited pseudophilosopher ayn rand, and as a consequence i strongly encourage you to read:
and not skim and look to argue. read charitably and see if you can still buy into her ideas, after reading some articulate people dissecting them (and seeing rand's defenders try and fail to defend via the comments sections).
Point 3. I don't know who these cool people are that you're talking about, "liberals" I assume. I find it hard to believe they will call you heartless if you socialize your health care to make it cheaper and available for all. http://en.wikipedia.org/wiki/File:Total_health_expenditure_p...
The argument is much that you can't just socialize the health care, you have to tear it to shreds and then paper-mache it back into a more serviceable shape. This is a process that takes time, and would leave people scrambling all over the place. Trying to do it while reducing damage results in monstrosities like Obamacare, and the current situation.
Sure there's a difference between isolationism and occupying multiple nations across the globe. You know that. I know that. Try telling that to the neocons and watch your reputation get ruined.
The neocons are not nice people. They will call you names for all kinds of silly and/or evil reasons. And they will demand that you think of them as the Righteous Good Guys every step of the way.
Points 1 & 2. Cut defense spending and all of the cool people will call you an isolationist. Sure, argue rationally all you want; the name will stick. Also, remember that the United States is bound by treaty to defend more than two dozen nations. That includes keeping bases in some of those nations. Those treaties will have to be renegotiated. Those nations will have to increase their own defense spending. Many of those nations have budget problems of their own. Have fun.
Point 3. Touch social spending and the cool people will call you a heartless bastard who cackles at the sight of starving widows in between gulps of baby orphan blood. Sure, argue rationally all you want; the charge will stick. Of course, this doesn't solve the money problem. Iceberg? What iceberg?
Point 4. Social Security is the third rail of American politics: If you touch it, you will die. Sure, argue rationally all you want. It will help as much as it ever has.
Long story short, the bureaucracy rules us. The administration of administrators who administer the other administers who supervise the people in charge of those who actually get real work done cannot make any concessions to reality. It would be like Gorbachev loosening the grip of Communism; one exit through the Iron Curtain and it's all over.
The Cool People will double down. They will continue to double down until it is physically impossible for them to continue doing so.