A Stitch in Haste

It's been quite a while since I blogged about Social Security reform, mainly because there's been nothing to blog about. Congress has been busy with more important matters, like square dancing around judicial nominees ("seven on a side, all jump the aisle, nominees been waitin', too long a while, grab your partner, dosey-doe, time for a compromise, here we go..."). Oh, and Terri Schiavo and lynching apologies, not to mention taking vacations.

Anyway, I've grown hopelessly pessimistic about true reform and especially about private accounts over the past few months, mainly because of the utterly pathetic way the Administration has been marketing their ideas. I'm ambivalent about the Pozen plan -- it makes an already extremely soak-the-rich progressive redistribution scheme even more so (I have previously described the Pozen plan as "progressivity squared"), although politically it probably makes a lot of sense.

And now there is word that Congress has given up on any Social Security reform until further notice.

Anyway, today over at Government Bytes, Ross Kaminsky (who also maintains his own blog) sums up nicely the current state of affairs:

The blame for the current situation lies squarely with President Bush and his advisers on Social Security who have spent far too much effort talking to people about investment returns and when this line crosses that line instead of emphasizing inheritability, choice, fairness and even the basic human dignity involved in controlling the results of one's own labor.

Exactly. I have often said that the White House should reduce the Social Security debate to the following idiot-proof (and liar-proof) talking points:

--The "trust fund" is a fraud. A piggy bank full of IOUs from yourself to yourself is worthless. Yet that's exactly what the "trust fund" is.

--The system starts losing money in 2017, give or take. The government will have to make up that shortfall, and there are only two ways to do so: raise taxes or increase the deficit. Delaying reform only makes matters worse.

--Stop using the b-word! Saying Social Security will go bankrupt is not only inaccurate but also plays straight into the opponents' hands, since they can then respond with charges of scaremongering.

--Social Security confiscates one-eighth of workers paychecks. One-eighth. As in, "12%" of every paycheck. If you care about the working poor, then you simply cannot support the current system and you cannot call it a "success." You're lying if you say otherwise.

Regarding private accounts:

--Any program would be voluntary. As in, "voluntary." As in, "no one would ever be forced to invest in the stock market if they didn't want to." As in, "anyone who likes the current system can stay in."

--Any program would have a cash or money market option, so workers could still accumulate some personal savings without having to invest in the stock market. Even the White House website only mentions "a conservative mix of bond and stock funds," but not a cash option. Very stupid.

--Social Security is biased against blacks (life expectancy differentials), women (spousal benefits discourage working full-time) and of course gays (no spousal benefits under federal DOMA). Emphasizing this point would have undercut key segments of the Democratic opposition. An opportunity squandered.

--All the projections, assumptions, rates of return and other "facts and figures" mean nothing, absolutely nothing, if you die before reaching retirement age. In that case your rate of return is exactly zero (except for a rather insultory $255 death benefit).

These are not difficult concepts. They are easily packaged into talking points and sound bites. Because they are practically axiomatic, they stand up almost by themselves against the lies and distortions from the AARP, Rock the Vote, Big Labor and even the master of intellectual dishonesty, Paul Krugman.

And still this bass-ackward White House blew it.

How depressing, and how maddening.