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Loosey-goosey Hits the Wall Chapter 1: After the Welfare State

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Social Security Grand Strategy

by Christopher Chantrill
March 01, 2005 at 9:45 pm

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IN THE CURRENT campaign for Social Security reform, we should not lose sight of the forest for the trees. All the talk about trust funds, caps, IOUs, actuarial scoring, and bankruptcy is mere ritual, the rich symbolic pageantry of the national Social Security cult. Beneath the solemnities Social Security is just another government program. Actually, it is two programs. There is the FICA tax program that imposes a tax upon American workers and American businesses. Then there is the Social Security benefit program that sprays out checks to certain Americans that meet complex eligibility criteria. There is no necessary connection between the two, whatever the reform opponents say.

We must ignore the distractions and think about what we want and about how to get there. What we want is to cut taxes and reduce the government’s benefit programs. We want to entice Americans off the liberal plantation and encourage them to build their own family farms.

What we want, long-term, is to dismantle the rule of the experts and replace it with an ownership society in which mediating structures flourish luxuriantly between the individual and the megastructures of big business, big government, big education, big foundation, and big labor. With Social Security, we want to take the 15 percent of Americans’ wages presently going to the federal government in FICA taxes and give it back to them so they can spend it on themselves. If it makes everyone feel better we will agree to force Americans to save what they get back in taxes rather than spend it.

Any deal that comes out of Congress this year that cuts some money out of FICA and gives it back to taxpayers is a worthwhile down payment on this strategy. If President Bush gets a deal that digs four percent out of FICA tax payments for young people this year, we win. If he gets two percent, we win. Either way, we have got the camel’s nose under the tent.

Many commentators, including the president, have talked about 2018 as the year when the Social Security problem begins as the program starts to pay out more than it takes in FICA taxes, or later at the moment in 2042 when “the entire system would be exhausted and bankrupt.” But this is misleading.

Social Security doesn’t suddenly become a problem in 2018. It is a problem right now. Social Security and Medicare keep getting bigger, as a proportion of federal spending, every year. The checks must be funded with tax monies or with borrowing. Every year they crowd against other programs that politicians and constituents want, and every year the moment when real spending cuts or real tax increases will be necessary gets closer. From the Republican point of view, the sooner the better.

But from the Democratic point of view, the future is agonizing, according to Matt Miller:

“How do we propose to make the health and pension programs for seniors sustainable while also paying for needed nonelderly initiatives? And how do we do all that while keeping overall taxes as a share of GDP at levels that don´t hurt economic growth (without pushing taxes beyond levels Americans are likely to support)?”

You have to feel sorry for the Democrats. All of a sudden noisy Republican boys are out in the street knocking baseballs around, and any moment a ball will be coming in through the front window. Whatever happened to those nice polite Republican children from back in the 1950s?

Here’s what happened. Republicans woke up one day, felt the hair on their chests, and decided that it was Morning in America. It gradually dawned on them that if they accidentally broke the windows of the welfare state, nothing would happen. Ever since 1980 (with one dreadful relapse in 1990) they have cut taxes first and asked questions later. Republicans have realized that the welfare state is the Democrats’ problem. If the Democrats want money for health and pension programs they should raise taxes, as they so brilliantly did in 1993. Let the Democrats rush out and fix granny’s windows. Republicans have bigger fish to fry, like madcap schemes to bring democracy to the Middle East.

Democrats are genuinely shocked by President Bush’s strategic boldness. They understand tactics, like saying “I have a plan” in presidential debates, or mau-mauing presidents of Harvard for valuable sinecures. But they are overwhelmed by the president’s calculated risks in war, tax cuts, deficits, judges, and now Social Security reform. Coddled and softened by their tenured jobs and guaranteed pensions they are frightened by people with the fortitude to create a vision, formulate a strategy, and sustain it to completion through inevitable dangers and setbacks. In strategic terms, as understood by the late John Boyd, this means that Republicans can usually get inside the Democrats’ OODA loop and beat them like a drum.

Social Security reform isn’t a problem for Republicans. Social Security reform is a problem for Democrats.

Christopher Chantrill blogs at americanmanifestobook.blogspot.com.

Buy his Road to the Middle Class.

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Faith & Purpose

“When we began first to preach these things, the people appeared as awakened from the sleep of ages—they seemed to see for the first time that they were responsible beings...”
Finke, Stark, The Churching of America, 1776-1990

Mutual Aid

In 1911... at least nine million of the 12 million covered by national insurance were already members of voluntary sick pay schemes. A similar proportion were also eligible for medical care.
Green, Reinventing Civil Society

Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State

Living Under Law

Law being too tenuous to rely upon in [Ulster and the Scottish borderlands], people developed patterns of settling differences by personal fighting and family feuds.
Thomas Sowell, Conquests and Cultures

German Philosophy

The primary thing to keep in mind about German and Russian thought since 1800 is that it takes for granted that the Cartesian, Lockean or Humean scientific and philosophical conception of man and nature... has been shown by indisputable evidence to be inadequate. 
F.S.C. Northrop, The Meeting of East and West

Knowledge

Inquiry does not start unless there is a problem... It is the problem and its characteristics revealed by analysis which guides one first to the relevant facts and then, once the relevant facts are known, to the relevant hypotheses.
F.S.C. Northrop, The Logic of the Sciences and the Humanities

Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.”  —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison

Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism

Action

The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action

Churches

[In the] higher Christian churches... they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm

Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh

Living Law

The recognition and integration of extralegal property rights [in the Homestead Act] was a key element in the United States becoming the most important market economy and producer of capital in the world.
Hernando de Soto, The Mystery of Capital

presented by Christopher Chantrill

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