JD said:
> Max notes that the Cato Institute's > intention is to dismantle the public
> sector . . .
>
> Though Max is generally right in his description, I think that it's wrong
> to take the Cato Institute's own rhetoric too seriously. Given that one of
> the members of their board -- Rupert Murdoch -- is one who eats at the
> public trough in a big way (taking advantage of the publically-owned
> airwaves), it's more reasonable to see the Cato Institute as pushing free
> enterprise for the poor and middle classes (dismantle the public sector)
> but socialism for the rich (including military suppliers).
Those fellows over there are true believers, quite unlike Murdoch, who's a latecomer to the institution. They have always been pretty militant against 'socialism for the rich' in my experience.
Your point about airwaves may not conflict with their doctrine, though this is a sufficiently interesting issue that I could be wrong about it, if they don't see the airwaves as public property. They might reason that the government's only role is to play traffic cop, not to use this role to extract rents from broadcasters.
Gar L. said: <<You said (and I am paraphrasing from memory -- the disadvantage of subscribing in digest form, you cannot easily find an old post) that the basis of the opposition to social security was it's progressivity and thus that proposals to increase that progressivity play into the hands of it's opponents.>>
Yes though I was not as explicit as warranted. One aspect of progressivity is simply the pattern of net transfers in the program -- taxes minus benefits. The Right reminds better-off people of what they already know: if their payroll taxes were invested like their other savings, they would be much better off still.
The other aspect of progressivity is more subtle.
Social Security provides insurance against the contingency of a lifetime of low earnings. The Right attacks this by rallying people who have figured out that this is not going to be their problem, much like organizing the holders of fire insurance to demand their premiums back if their houses don't burn down. It's an "I got mine" posture, but it is not explicit.
The surface rhetoric is to compare part or all of Social SEcurity to savings, under the assumption that the worker lives to retirement and enjoys sensational good fortune in investments. Even if one deflates the savings claims, the comparison gives away too much: namely, that the worker has some moderate to high level of earnings. In the womb, so to speak, nobody knows if they will do that well. Risk aversion supports an insurance system.
So in both senses progressivity is under attack, though the implications are not equally obvious in both cases.
<<If I am distorting your meaning please correct me -- but that does not seem a valid point. Ending progressivity may be a motive behind these forces -- it is not their means of winning popular support. Any time I run into some one who opposes social security, they usually claim "there won't be any for me when I retire".>>
Upper-income people have a motive in dismantling the system because at this point in their lives, they can be confident their own disposition of payroll taxes would increase their wealth more than SS benefits would. "Upper" in this context applies to a pretty broad spectrum of the population, not just rich people. It includes young people who are "upper" in their minds, in the sense that they expect to be in this situation, whether justified or not. These are the audiences I've been dealing with, debating privatizers.
The people who are gulled into supporting privatization because they are afraid SS "won't be there" in my view are much the smaller and less politically significant of the constituencies. "It won't be there" is a pretty easy argument to knock down. It assumes that there are no payroll taxes, hence no workers, in the economy.
<<I have never run into any working or middle class person who hates social security because it has a net redistributive effect. In fact making social security more progressive would indeed build popular support. >>
This is possible but not obvious to me. It also presumes no better use for additional tax revenues, which I would disagree with.
<<Now let's examine Carrolls proposal step by step
1) removing the wage cap and taxing all income not just wages
Not bad politically -- I can't see someone making 30,000 a year objecting to someone making 90,000 having their taxes raised especially if it ensures that social security will be there. And it is certainly would "save" social security>>
The question is whether the approval of the yea's would overrule the disapproval of the nays. Intensity of feeling matters in politics, not just numbers of interested parties. Point 2, I don't think there is any basis for your assertion that it would "certainly" save the program (which, we should keep in mind, doesn't need saving in the conventional sense).
<<2) exempting the first 50,000 in income-- a lot of people pay more in social security than they do in income tax. Even a 25,000 dollar exemption would turn social security into a progressive tax. A very small part of the national income goes to people making 25,000 a year and under. Removing the wage cap and including non-wage income makes up for it and a lot more besides.>>
Note that you're talking about eliminating a payroll tax (on the employee side, at least), shifting all this into the income tax, then creating a zero bracket (the $25K). There's still the issue of political support. A second is that the program turns into a tax-and-transfer exercise, rather than insurance. We know there is support for social insurance. We don't know, and have serious reasons to doubt, that there is support for a straight tax and transfer program.
<<3) 75,000 guaranteed income -- plain nuts -- we could not do that under socialism, let alone capitalism. But why not raise and equalize the benefits, to the point where all recipients would get the same and 90% or 95% would receive more than under the current system. EPI contains some number crunching gurus. For that matter so does this list. Why not see how high you can get the benefits and make the numbers come out with the above new tax structure.>>
Why is there not a generous public assistance program in the U.S.? I would say, for the same reasons the proposal above will not happen.
<<Now if you want to build a pro-social security movement you can do it on the basis of a proposal that would raise benefits and lower taxes for the vast majority,>>
It's not obvious that taxing upper income people more would finance an ample, equal, universal benefit for "the vast majority." Nor is it true in my view that this is the best use of booty derived from the rich.
<< . . . eliminate social security race and gender bias and put in a "stable" basis even given the privatizers assumptions. I think you might well get some popular support around a proposal like that. And I'll bet it would be the privatizers turn to say "wait a minute, there's no hurry, we have 75 years." Well?>>
Christian said:
<<i agree that social insurance is and has been different from "welfare," if we understand that as afdc (or tanf); the latter is public assistance, rather than social insurance, and carries with it the stigma that maggie and frances mentioned. but there's still the fact that both are both forms of what marx calls *verausserung*, an alienation of the state that "buys off" both its functionaries and citizens. having more or less gotten rid of one, capital now wants to appropriate the other. so, while i get how important it is to argue to secure (not save) social security, and that part of that project (at least in public) would mean distinguishing it from "welfare" (and the semiotics of decadence that go with it), wouldn't you also want to "save" public assistance? to say nothing of a public sector?>>
In reply to the last question, absolutely, though rather than try to revive the old welfare system, which we all know had many problems, my interest is in motivating a new system. The EPI book "Reclaiming Prosperity" has a chapter on welfare reform that I like. (didn't write it myself).
Also it should be noted that we are a long way from the elimination of public assistance in the U.S. The big hit has been on AFDC, and the change thus far is more structural than a reduction of actual expenditures. There has certainly been plenty of suffering and injustice under the present 'reform,' but there is still a lot of remaining public assistance. AFDC was smaller than Food Stamps, and both together were smaller than Medicaid. There is also SSI. The host of smaller programs (e.g., housing, nutrition) are taking hits, but the total absolute reduction in spending for this sort of program is probably less than $15 billion annually, which is a lot of money for Bill Gates but fortunately a limited share (e.g., 10 percent or so) of total means-tested spending in the U.S. I haven't checked these numbers, so I welcome more precision and plead guilty to approximation.
Now please don't regale me with anecdotes of suffering under the new system (and you know who you are). I'm not denying them. I'm talking about aggregate spending amounts and the basic structure of the programs.
Cheers,
MBS