Social Security has a long-term funding gap that just keeps growing. Neither political party has a plan to pay for the promises we’ve already made to people contributing to the system. But Democrats are bringing a new idea to the table: make even more promises.
Almost all Senate Democrats have lined up behind a proposal by Elizabeth Warren of Massachusetts and Joe Manchin of West Virginia to expand benefits for current retirees. Liberals are exulting that Warren has shifted the politics of Social Security to the left: Where once we were debating cutbacks to the program, now we’re debating benefit increases. Too bad that also means the debate is shifting further away from fiscal reality.
Social Security is becoming a worse deal for each generation. Those now joining the workforce are expected to pay more into the system than they get out of it. Warren’s plan is to shower more money on the current generation of retirees, but without increasing the deficit over the next 10 years. That means, in all likelihood, raising taxes on current workers while also increasing the program’s long-run fiscal deficit…
Now, in raw politics, this is a good idea – you see, elder voters are increasingly trending GOP and they tend to vote very consistently…thus playing a huge role in the anti-Democrat blow-outs of 2010 and 2014. In 2016, which is expected to be a close-run race, getting a few more elderly voters to pull the lever for the Democrats might make the difference between President Hillary and President Walker. So, off we go: raise social security benefits for current retirees and hope that out of gratitude they vote for you.
Of course, as noted in the quote, this can only be done by increasing taxes on current workers and it would also, naturally, put a heavier strain on social security in later years. The bottom line is that social security just doesn’t work – it is predicated upon a very large number of working people supporting a relatively small number of retired people. Trouble is, the work force keeps getting smaller and the miracles of modern science are keeping us alive ever longer. My father retired in 1992 at the age of 65 and died in 2009 at the age of 82 – seventeen years of picking up the SS check. Suppose I live 10 years longer than my dad did…even if I retire at 67, that will still work out to 25 years of SS payments for me. And a kid of 25 today might easily live until his late 90’s, or even longer. Meanwhile, we’re not having all that many kids. The program eventually goes belly up. But what is that to Democrats? What they need is a way to buy votes now – what will happen later is irrelevant; whatever happens, their program to deal with it will be to promise more free stuff.
Ok, so how do we fight against this? Can’t just say, “screw the old folks”. That would just play into Democrat hands. We have to come up with some sort of program which both benefits the oldsters while also helping out the younger folks who are paying for the goodies. My preferred option is to start implementing a privatization of social security without being too explicit that full privatization is the ultimate goal (politics is the art of the possible, folks). Something along the line of “10% of the money you pay into ss, today, will go into a private account owned by you and your heirs”. Whatever we do, we have to do it well – because this will be a potent weapon for the Democrats in 2016.