Why I Am Not an Economic Conservative

I know I do not fit in as an economic conservative/libertarian, because of stuff like this entitlements-doom-us article from a “National Center for Policy Analysis”, and the folks at reason.com who readily buy it, and Andrew Sullivan, who seems inclined to buy it.

Smart, credible people have convinced me that Medicare is an unsustainable course, financially, but also that Social Security is sustainable, either as is or with minor adjustments.  However, people like the National Center for Policy Analysis find it rhetorically convenient to lump the two programs together, apply somewhat pessimistic projections and seriously warped analysis, and thus declare the combined system a basket case and a threat to life as we know it.

It bears repeating: In 1983 a bipartisan major reform turned Social Security from a pay-as-you-go time bomb into a financially sustainable pension system. It did that by raising Social Security taxes to where they needed to be to fund the expected future benefits to the workers paying the taxes, and by raising the retirement age. It is no longer pay-as-you-go.  Surplus money is being accumulated by Social Security by design, as baby boomers continue to pay in big aggregate bucks now, as needed to provide for the big aggregate payouts that will be needed by that generation in retirement.

I would give econ libertarians this: Social Security ought not now be puffed up by instituting new Social Security taxes on higher incomes. If any fixes are needed, the impact should be fairly and sensibly distributed over the entire population of past, present, and future workers. The principle should remain, you pay in an amount sufficient to cover the benefits you are promised.


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