From: Brian Holtz [brian@holtz.org]
Sent: Sunday, June 26, 2005 6:37 PM
Subject: RE: Candidates - RE: Best LP issue: fascism or
entitlements?
The law specifies pre-funding. It requires an
annual premium. The "ramping tax rate" does not change that requirement.
There are
also laws requiring that Congress shall pass a budget before the start
of each fiscal year.
You say that Congress intended to under-fund the program from
the beginning.
I didn't say they intended
specifically to underfund the program. I said they self-servingly
set up a program in which each cohort funds the previous cohort,
instead of funding itself. They thus established the problematic
pyramid-like nature of the program from the very beginning.
If they did, they were stupid to specify mortality tables
in the very law, because nobody could prove the
under-funding without using mortality tables.
There were no
actual mortality tables in the law. Again, you're confusing a
legislative fig leaf with actual legislative machinery. In this
case, the actual legislative machinery was the ramping
schedule of contributions.
The ramping tax rate may show an intention to transfer money
from one generation to another.
I don't see how
it could not show such an intention.
Yet, that has
nothing to do with pre-funding.
To
clarify, "pay as you go" in the context of SS means that a
given cohort's benefits are not paid entirely from its contributions,
but rather rely at least in part on the contributions of later cohorts.
"Pre-funded" means that a cohort's benefits would indeed be paid
entirely from its contributions.
You continue:
If they did not include the
"premium provision" for legal reasons, what possible use would
that provision serve? If
obeyed, the provision would guarantee pre-funding. Yet if
Congress did not intend to pre-fund the program, why did they include
the appropriation provision?
To mislead people. Legislators do not
always reveal their true intentions in the language of the laws they
pass.
I do not support the status
quo. I would like to end social security completely. The
program you recommend, however, seems to increase government
power, rather than reduce it.
Then
why is it advocated by opponents of government power, and opposed by
proponents of government power?
It does not further the
ideal that SS was wrong in any way.
Sure
it does: by moving the system roughly half-way to one in which benefits
are 1) pre-funded by actual accounts and not just government promises,
2) funded for each cohort by the contributions of that cohort, and 3)
are paid from balances kept by name as the personal
inheritable property of the beneficiary. Adopting these
principles now clearly implies that SS was wrong not to adopt them
then.
Indeed, as defenders of SS and government
power rightly fear, even a limited system of personal accounts would
soon result in the dismantling of SS. Your current annual SS
statement doesn't compare your returns in the system to alternative
investments, but future such statements would show that contributions
to personal accounts have better returns than the traditional system.
Voters will quickly demand that their entire payroll tax be deposited
in their personal accounts. This is the nightmare of the socialists who
devised Social Security as "social insurance" that allows them to
engage in arbitrary social engineering by tinkering with benefit and
contribution rules. When SS becomes just mandatory retirement saving,
there won't be anything "social" about it any more.
I'm stunned that you could oppose the only
politically-viable rollback of America's most successful effort at
socialism merely on the grounds that a) it doesn't also make retirement
saving voluntary on day 1, and b) rent-seekers will complain that their
windfalls have been taken from them.
It divides the electorate
in half; those who rely on government payments, and those who profit
from government tax breaks.
Everybody becomes more
dependent on the government, not more free.
The plan trades 1) an unfunded promise
by the government to tax my children on my behalf for 2) a personal
inheritable account in my name that pre-funds my benefits. It's
untenable to say such a trade makes me "more dependent on the
government".
People should not have to
advance their economic interests through politics.
If
politics is how one's economic interests are being attacked, then
politics is how to defend them. Libertarians recognize the clear moral
distinction between using politics to keep what is yours, versus using
politics to take what is someone else's.
Do you really think my
children should have to decide to opt-in or opt-out of the government
program?
Such
a choice is better than the status quo. Personal SS accounts are
obviously the only politically viable alternative to the status
quo. I can only see one good reason to oppose such a plan on your
style of hypothetical political calculation: if the Republicans succeed
in rolling back the socialization of the retirement industry, that
would seriously blunt one of the primary LP critiques of the Republican
Party. But since I put America's interests ahead of the LP's,
that doesn't worry me at all.
BH: Such
comparisons with Nazis and fascists are specious, for reasons I've
described before:
Yes, fascism is a prominent
subject of both posts.