A Good Program

Yglesias is blogging up a storm lately about how there is no such thing as a Social Security crisis:

I said liberals need to drive home the message that "There Is No Social Security Crisis." Chris Bowers, aiming for a more positive approach, thinks "Social Security Is Healthy And Successful," which has some merit too. I think the crisis mentality sort of needs to be addressed head on, but I like the positive approach and the reminder that Social Security is a good thing (successful!) and not just some program we happen to have.

Of course, all of his analysis (and go there to find to read it all, too much to link) talks about the accounting shortfall. Setting aside for the moment this important argument, it needs to be pointed out that SS privatization (at least for those of us who actually believe in liberty - not the guys currently contolling all branches of the government) is about more than just accounting. It's about the deadweight of wealth transfers. It's about growth. But most importantly, it about property rights - and the fact that when it comes to social security, you have none.

While the benefits are grossly progressive (ed. - this originally incorrectly read "taxes are progressive"), the whole program is as regressive as it gets. It's simple really - poor people work more years, they die younger, and they get less benefits. This hits African-Americans rather hard. Working women, who usually make less than their husbands, get the same benefit as stay-at-home women (for a given husband's income) - even though the workers have paid into the system and the non-workers have not. The list of inequities goes on and on, and they all come down to a lack of property rights.

But Matt says it works. It's a good program. Geez, if that is what a modern liberal thinks is a good program, I'd hate to see a bad one.

Social Security is problematic on many levels. To argue against privatization, one has to address all these problems.

Update: Andrew Chamberlain has advice for Democrats:

Stop fighting Social Security reform. Embrace it as a civil rights issue. Thanks to differences in life expectancy and earnings, African Americans receive dramatically less from Social Security than whites with comparable incomes.

The current system essentially transfers dollars from young African American workers to white retirees—up to $10,000 per person over a lifetime according to the Rand Corporation. Is it any surprise black voters favor private Social Security accounts in polls?

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Trent, While the payroll


While the payroll taxation is progressive,

In what sense? The marginal rate is either flat or zero, AFAIK.

Regards, Don

I meant to say "benefits",

I meant to say "benefits", not "taxes." It's corrected.

One way or another, we're

One way or another, we're going to have poor seniors, and we're going to have a welfare program for them. With that in mind, I don't think this forced retirement savings program is particularly libertarian - it's just another pile of forms to fill out every year. We already have IRA's and 401k's to encourage retirement saving.

I say phase out the whole SSA, and just establish Welfare For Poor Grannies out of general revenues. For me, the gains in simplicity would vastly outweight the injustice of government redistribution which, for those of us living on planet earth, is already happening and isn't going away anytime soon.

"I say phase out the whole

"I say phase out the whole SSA, and just establish Welfare For Poor Grannies out of general revenues."

Bingo. This idea seems to be gaining popularity, and it actually has a shot at getting some liberals on board, since it does away with regressive payroll taxes concentrates the payouts on the truly needy.

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Yesterday I claimed that Social Security reform was more than just making debits [...]