The Washington Post editorial board recently prescribed a sugar-coated Satan sandwich — a delicacy previously served up by Republicans, hat tip to Rep. Emanuel Cleaver, D-Mo., — that would destroy the Social Security system.
"Whiskey Tango Foxtrot!"
Social Security is the most popular of civilian federal programs. Per an AARP-commissioned poll, as many as 96% of Americans consider it "either the most important government program or an important one compared with other government programs."
Why so popular? Because it is a brilliantly designed social insurance program in which we pay premiums in return for benefits. Nothing even remotely unconservative about it.
Libertarians never tire of pointing out that the internal rate of return on our Social Security premiums is low. True.
But wrongheaded.
Social Security was designed to be, and is, insurance, not investment. Meaning: Our benefits are based on our contributions. Not earnings.
A supermajority of Americans understands, leaving only a superminority of libertarians, progressives, cranks and curmudgeons (myself excluded) complaining.
Now comes The Washington Post calling for the conversion of the super popular social insurance program into a politically unpopular welfare program: benefits based on need, not contributions.
The Post's Editorial Board in full, loopy, Magisterial Mode: "Created in 1935 during President Franklin D. Roosevelt's first term, Social Security epitomizes modern America's commitment to a more humane democratic capitalism.
"As the New Deal intended, Social Security by and large provides retired workers with a decent standard of living. Americans aged 65 and up were once the poorest age group in the country; they now have the lowest poverty rate, thanks largely to Social Security.
"Unsurprisingly — and, to a great extent, justifiably — Social Security ... enjoys near-sacrosanct political status."
Then ... the Post serves up its poison pill by proposing "tweaking benefit formulas to trim how much high-income households get and increases for the most vulnerable."
This surely comes from compassion. Or ... sentimentalism, from which FDR was blessedly free.
Yet it's a sure-fire way of eroding the "sacrosanct" political support for Social Security, putting it, in the long run (in which we are all dead) into a death spiral.
Who else, besides me, would be horrified by this feckless proposal? FDR.
In his 1934 message to Congress he stated: "Security was attained in the earlier days through the interdependence of members of families upon each other and of the families within a small community upon each other. The complexities of great communities and of organized industry make less real these simple means of security.
"Therefore, we are compelled to employ the active interest of the Nation as a whole through government in order to encourage a greater security for each individual who composes it ... This seeking for a greater measure of welfare and happiness does not indicate a change in values. It is rather a return to values lost in the course of our economic development and expansion ..."
Not mere rhetoric. FDR had convened an expert Committee on Economic Security (CES), which, per the Social Security Administration, "did a comprehensive study of the whole issue of economic security in America, along with an analysis of the European experience with these perennial problems.
"Their full report was the first comprehensive attempt at this kind of analysis in many decades and it stood as a landmark study for many years."
Well done, CES executive director Edwin Witte, who wrote of his presentation of the package to FDR, "He [the President] felt committed to both unemployment insurance and provisions for old age security and also wanted the committee to explore thoroughly the possibilities of a unified [package] social insurance system affording protection against all major personal hazards which lead to poverty and dependency. ...
"He also stated that all forms of social insurance must be self-supporting, without subsidies from general tax sources ..." (Emphasis supplied.)
Friedrich Hayek, too, would be horrified. From the libertarian bible, Hayek's "The Road to Serfdom": "Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance — where, in short, we deal with genuinely insurable risks — the case for the state's helping to organize a comprehensive system of social insurance is very strong."
A rare grand conjunction between the pragmatic left and the pragmatic right. One which The Washington Post proposes to destroy.
This is so obviously a bad idea that even the mighty Washington Post won't succeed in conning the Congress, or President Joe Biden, into throwing Social Security into a death spiral.
Still. Tsk tsk!
As I previously wrote here, we can save Social Security, Medicare and Medicaid by raising our real economic growth rate.
Not by raising taxes.
Or cutting benefits.
And certainly not by converting Social Security into welfare.
Ralph Benko, co-author of "The Capitalist Manifesto" and chairman and co-founder of "The Capitalist League," is the founder of The Prosperity Caucus and is an original Kemp-era member of the Supply-Side revolution that propelled the Dow from 814 to its current heights and world GDP from $11T to $94T. Read Ralph Benko's reports — More Here.
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