Sunday, June 15, 2008

Obama, McCain and Social Security

Here's an undeniable example of Obama contradicting himself. He made this statement during the MSNBC debate in October:
I absolutely agree that Social Security is not in crisis.
Here's what he said to the National Journal on November 8:
Senator Clinton says that she's concerned about Social Security but is not willing to say how she would solve the Social Security crisis
He went on to accuse Clinton of wanting to "avoid giving clear answers and getting pinned down," which he considers an "old way of doing business." The new way, it seems, is to say entirely different things at different times.

What I want to say today is what I've said before: Social Security is not in the kind of trouble many would have you think it's in. If you don't believe me, look at Al Franken's book The Truth -- with Jokes. And if you smirk at the idea of accepting Franken as a source on an economic issue, then check out his cited sources.

The bottom line: When Bush spread scare stories about the system going broke, he used fake information supplied to him by the Libertarian Cato Institute. The Libertarians want to get rid of Social Security for ideological reasons, and they will not balk at creating fake numbers in order to achieve that long-term goal. Blinded by the Beatific Vision, ideologists don't much care about what works and does not work in the real world.

Barack Obama's chief economic adviser on this subject is Jeff Liebman, of the Cato Institute.
"Liebman has been open to private accounts," said Michael Tanner, a Social Security expert at the Cato Institute in Washington, a think tank in Washington that advocates "free markets" and often backs Republicans.
Recently, John McCain made some noises about privatization which sent the "progressive" blogosphere into conniption fits. Strangely, the progressives offer nothing but excuses when Obama's adviser makes the same noises.

That dichotomous reaction is why I believe that we are safest with McCain as president, stymied by a Democratic congress. If George W. Bush could not upend Social Security at a time when his party controlled congress -- at a time when his poll numbers remained reasonably high and most people approved of the decision to invade Iraq -- then McCain certainly won't be allowed to get up to much mischief.

But Obama might. Too many Democrats view him through rose-colored glasses.


Anonymous said...

This is an interesting time in America. Following the recent and I suppose inevitable terms of trade shock, there is going to be a little less "cake" to go round. The deficit has to be someones expense. I would expect a fight around this issue. For the top percentile of the income distribution, the risks are very high that their taxes will rise, given the huge gains in their share of national income over the last 30 years. As ever, the only alternative is taxes on the rest, or cut their benefits.

So you would expect one hell of a ding-dong fight around the issue of social security or any question affecting transfer payments. This is now the truly important question that is coming. I sort of hope taxes do go up on the rich, which is really a matter of taxing corporations. The problem is globalisation. How do you discipline corporations when they can just up and leave? Anyways, this fight is so much bigger than party lines. I cant see how the traditional stance of parties can be constant in this environment.


Anonymous said...

I am quite familiar with the previously obtaining numbers on Social Security. And I have spent hours on-line arguing the 'no crisis' catechism, that, historically, the 'optimistic' Trustees' projection has been closer to reality than their other two more cautious projections, and that accordingly, there was a high probability that there would be no need to change anything about SS for its longer term solvency.

That's all been true, in the past.

I wonder if it's still true now, given the novel and horrible fiscal situation we now find ourselves in, courtesy of this world class failed presidency.

Forgetting the exact GDP magic number, but either 1.7% or 2.1% average real GDP growth was all that was required to ensure SS's solvency long-term (given a host of ancillary assumptions). We all used to argue, WHAT could collapse real GDP growth below such a low number, when the long-term 30-year average real GDP growth was 3.5%?

We may now see how that could occur: basically, blowing our patrimony on several misguided wars that nobody in power seems to want to really end. BHO is fully aboard ratcheting up the military actions in Afghanistan and Pakistan, which is a terrible idea.

So, it may very well be a good idea to do some of the more obvious 'fixes,' such as removing the current cap on income subject to the payroll tax for FICA, just as we have done that already for the Medicare part of payroll taxes (the 1.45% part of the 7.65% total tax).

I am not entirely convinced this is necessary, but the conditions have changed enough, with the dollar tanking and the national debt up some 80% over this last failed presidency, that it may at last be the case.


Zee said...

"Strangely, the progressives offer nothing but excuses when Obama's adviser makes the same noises.

That dichotomous reaction is why I believe that we are safest with McCain as president, stymied by a Democratic congress."

EXCELLENT observation!