--- On Wed, 5/13/09, Max B. Sawicky <sawicky at verizon.net> wrote:
> For deficit hawks, privatization is irrelevant. It
> doesn't fix
> anything they care about.
> It would have to be bundled with big benefit cuts to have
> the impact
> they are looking for.
>
> I agree the situation is worrisome.
>
[WS:] My hunch is that it is not about deficit - for military spending does not raise deficit concerns - but about party politics. I recently re-read Theda Skocpol's book "Social Policy in the United States in Historical Perspective" in which she argues that the outcome of social policy in the US is not as much shaped by capitalist opposition but by party politics. She uses historical examples of the Civil War veteran benefits (which at one point consumed up to 40 percent of the federal budget) and the implementation of the social security during the New Deal and post WW2 era to show that the main opposition to a truly universal program came from political parties rather than capitalists. According to Skocpol, the latter did not mind a universal social program paid for by general taxes as long as it applied to all capitalists equally without favoring or disfavoring any particular group of capitalists. However, political parties liked to keep it
discretionary because they could use discretionary control of social programs as a bargaining chip in political patronage and machine politics.
Interestingly, the main partisan champion of the Civil War veteran pension program were Republicans, who could use it as political patronage in the North to "buy" votes. Consequently, the opposition to this plan came from an unholy alliance of Democrats and Progressives who posed themselves - you've guessed it - as fiscal conservatives.
If Skocpol is right, I do not think much changed in that respect in the US politics. The party alignment might have changed, but the discretionary power of parties to shape government social policy is still great. Since SS is the only truly public program relatively independent of party politics (and patronage), methinks that the noises about SS "deficit" are not really about "fixing it" financially (e.g. by changing the input/output balance) but rather about politicizing it in line with other federal programs (e.g. housing or social assistance). The final outcome may be a reduction of benefits or a SS tax increase, but that will be incidental to the primary objective of greater partisan control.
Wojtek