Advocacy Conservatism
By Robert A. Hahn Posted in Economy — Comments (76) / Email this page » / Leave a comment »
It is becoming increasingly apparent to conservatives that President George W. Bush is simply not on board with their cause. We know this because the newspapers and the blogs are filled every day with criticism of the President's obvious lack of concern over runaway federal spending, and indeed, his apparent indifference to the sheer size of the federal government.
Instead of championing fiscal discipline and smaller government, the President devotes his time to efforts that are mere distractions from the real isses that conservatives care about. Instead of railing at the Congress for its profligate spending bills, the President signs these pork-laden monstrosities as if they were nothing, and then wastes his time travelling around the country talking about Social Security.
You just knew there was going to be more below the fold
If the President will not advocate such simple conservative goals as restraining government spending, of what use are his other initiatives, such as the Advisory Panel on Tax Reform which is due to deliver its report at the end of this month? This will only provoke another needless debate over various forms of flat taxes and other simplifications which by themselves will do nothing to address the real issue, which is spending.
One can only conclude that the President is either, as his liberal detractors suggest, a fool and a bumbler, or he is competent enough but simply does not care about the real issues that conservatives want to see advocated, such as – Hello – cutting the pork.
After all, what is conservatism about if we don't advocate smaller government? We never get it, but it is vitally important that we advocate, loudly and often, on behalf of the things that are important to us. Indeed, conservatives have been advocating smaller government for decades, since before Barry Goldwater in 1964. And today the federal government is larger than ever.
Of what use to conservatives is the leadership of President Bush? Take his initiative on Social Security reform. This is just putting more lipstick on the pig. All it would do is change the nation's public pension system to remove money from an account that Congress can spend, to accounts outside the government that the Congress can't get its hands on. What does that have to do with the real issue, which is spending? Why waste our time making structural changes that would put the citizens' retirement funds outside the reach of Congress when we could instead be advocating for more spending cuts?
Now comes this "Advisory Commission on Tax Reform," and once again the President will go off on a tangential crusade to adopt some form of simplified tax code. Maybe a flat tax. Maybe the "Fair Tax." Maybe the National Retail Sales Tax. But once again, nothing to do with the real issue, which is advocating for more spending cuts and smaller government. Just look at this graph. It wasn't George Bush, but George Bernard Shaw who told us that a government that robs Peter to pay Paul will always have the support of Paul. As that graph shows, there are a lot of Pauls out there... more than ever. Fully a third of the people who filed federal income tax returns last year owed no tax whatsoever. These people are a natural constituency for ever-higher government spending, because government spending doesn't cost them a dime. No wonder they vote for it. To them, it's like free money. This means that we as conservatives need to be advocating even more loudly for spending cuts, and demand that President Bush join us instead of spending his time trying to reform the tax code.
The problem with Bush is that he's not a real conservative. He spends all of his time trying to get the retirement funds out of the spending pile and away from the government, and reducing the number of voters who can treat government spending as free money. When what he should be doing is going after the real problem, which is the spending. He needs to stop these efforts to actually fix the problem, and join us in directly advocating the death of Barney and the promotion of higher food prices.
It's either that, or the rest of us have to stop doing the same thing over and over again, expecting a different result. After all, it might not be the President who's got the wrong idea here. Maybe moving funds out of the so-called Social Security "trust fund" and into individual accounts would indirectly lead to lower spending because the Congress wouldn't have the money under its control... individuals would. And maybe tax reform would create a more politically hospitable climate for spending cuts, by subjecting the third of the voters who don't pay any income tax to at least some taxation so they aren't just voting to spend other people's money. As stupid as he is, this guy Bush is pretty crafty. You sometimes have to look twice at what he's proposing to make sure you understand what he's trying to get done.
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Our principles have just run smack-dab into the middle of reality.
We have been trying the usual stuff and haven't gotten anywhere. Maybe it's time for a change of tactics. Or do we conservatives like getting creamed in the press all the time?
Bush is at best inconsistently conservative - although every conservative is. And while ideological perfection is the enemy of the ideological good, it's hard to argue that Bush has advanced the cause of conservatism much in this country.
For instance, you argue:
he problem with Bush is that he's not a real conservative. He spends all of his time trying to get the retirement funds out of the spending pile and away from the government, and reducing the number of voters who can treat government spending as free money.
Which is only partially true. Yes, Bush has shown leadership on Social Security reform (but not enough to get it passed). However, he's also dramatically expanded the entitlement culture with his Medicare prescription drug benefit - meaning that more people are depending on the largesse of federal government. Not only was that bill a defeat for conservatism, it was the sort of thing we'd expect from a Democrat.
You're right in pointing out that entitlement spending, not pork, is the most onerous part of the expansion of government. However, it's much easier to reduce pork than it is to reduce entitlement spending. Inevitably both needs to be done, but its much easier to make the case that we need to reduce wasteful spending in a time of crisis than it will to make a political case for reducing entitlement spending.
all the Justice Department investigations on some prominent government figures? You've got Fitzgerald doing the Plame leak, the whole DeLay - Abramoff deal, and now this thing with Frist. I know they're ongoing investigations and everyone is innocent until proven guilty, but taken together the investigations point to a shady culture that's developed in the corridors of power.
and read the story again. Do you see a reference to investigations there? I think not.
This thread hijack is over, knock it off. Your first and only warning.
Social Security (SS) reform has not been rejected by any voters. It has been rejected by the main stream media. There were some anti-private account ads run by loonies on the left and several other issues took front stage. I think the fact that reform for SS has been downplayed by the media does not help the cause, however, the majority of younger Americans prefer private accounts. The predominating notion by Democrats has been that most americans just are not "smart" enough to manage their own money. Unfortunately, the poorer people in this country would be better off letting a monkey manage their stock portfolio than to allow the government to keep it under the current social security system. There have been no less than 30 nations that have private account based systems and each of these averages a 4% return compared to a 1.5% return for each dollar invested into the system. If American's new the truth, they would certainly vote for private accounts and reform. Why don't we put it to a vote and then see if the voters reject it. Simply because the congress has not moved swiftly enough, or has not concurred on the issue does not mean that voters have rejected it. For more data on Social Security stats and reports evidencing what has just been said, visit Conservative Pages Social Security.
as Bush has. Your post is like the left-wing conspiracy theories only in the opposite direction. Like maybe Bush is making the federal government bigger so it will be smaller.
So, what should conservatives have done? Voted for Kerry? Bush is far better than the alternative. And, although we want to see a smaller federal government, the fiscal conservative issues are not nearly as important as the social conservative issues. And there, W has been very consistent.
I agree the pork is too much and unfortunate. But spending on intra-structure is ill-defined as deficit spending. Too many people, including the media, misunderstand basic accounting. Building or improving a road is not an expense anymore than building a house is. Repairing New Orleans is not an expense. These are capital expeditures and can increase value and societal net worth (if done wisely).
Of course, government can - and often does - waste money. I hope, and believe, this administration does less of it, however.
If we protect this country by defeating terrorism and solving the problems in the Middle East (a plausible dream, despite what the MSM says) and if we create a business-friendly economy and tax system, "budget deficits" will not be a problem, as long as we don't waste what we spend.
But social security and medicare are true accounting nightmares. They are ponzi schemes that will not go away with a growing economy. Private accounts put a cap on benefits: you and your spouse get what you save and that is it (oh, if we could convert the entire system). This can both save money for social security and can transfer responsibility to the individuals, where it belongs.
Medicare is a different problem. But we can't get there until we solve social security . . . and keep the country safe in the meantime. Rebuilding destroyed cities and neglected infrastructure is necessary . . . but it does not create deficits in an of itself, so long as it is not wasteful.
Perhaps Bush won't solve social security and perhaps he won't win in Iraq (becuase the media and democrats and some republicans lack the needed fortitute), but he is our best shot at it.
Other than that, only the SCOTUS is really an important issue. Lighten up on the pork and how you define a deficit.
So, what should conservatives have done? Voted for Kerry? Bush is far better than the alternative.
Bush is the biggest spender since LBJ, but Kerry would have been worse? Why do you say that? Kerry favored PAYGO, which means spending must be paid for, which naturally puts a brake on spending. The GOP in Congress would also be freed from having to follow Bush's big spending for the sake of party unity.
One of the problems is, after so many decades of "New Deal" and "Great Society" politics, TOO MANY Americans are totally helpless without their precious big government. They're like children, that vote (and they're called Democrats.) They probably need almost as many decades to reform, to kick the begging habit.
And what "government schools" have done best over these many years is teach students what they should DEMAND from their government, not demand from themselves. It seems, the one thing that our public schools have done well is manufacture more dependents that look to government to solve their troubles.
Bush has other problems too. It was hard for President Reagan to slow that runaway budget train, while fighting a cold war at the same time. And fighting worldwide Islamic terrorism is no easier. I think President Bush has decided that he can only fight one world-war at a time. Both Reagan and Bush had Democrats (lots of Democrats) ready to throw big rusty wrenches into the gears of government if they got pushed too hard on spending cuts. That makes it a very complex process. Cutting the size of the federal government, FOR REAL with no accounting tricks, is going to look the American Civil War II. When that happens, there won't be time for other wars, on other shores. There may even be bloodshed.
And the reform was good tax reform, reducing rates and loopholes. Not just spin.
that there are questions about how Conservative the President is. I think it goes beyond fiscal conservatism, socially, he could be more conservative (I remain skeptical about Judge Roberts) and What's up with immigration.
But hey, weren't people saying the same things about Ronald Reagan at about this time of his Presidency?
I'll give him this, he has had to deal with some of the worst disasters in history. So far I think he's getting a "B-" time will tell if this ends up an "A" or a "C"
Not a week ago he wrote a long and quite eloquent piece about how Mr. Bush was a visionary leader with his plan for a huge federal response to Katrina. Now he is one of the president's harshest critics? I don't buy it.
It's either that, or the rest of us have to stop doing the same thing over and over again, expecting a different result. After all, it might not be the President who's got the wrong idea here. Maybe moving funds out of the so-called Social Security "trust fund" and into individual accounts would indirectly lead to lower spending because the Congress wouldn't have the money under its control... individuals would. And maybe tax reform would create a more politically hospitable climate for spending cuts, by subjecting the third of the voters who don't pay any income tax to at least some taxation so they aren't just voting to spend other people's money. As stupid as he is, this guy Bush is pretty crafty. You sometimes have to look twice at what he's proposing to make sure you understand what he's trying to get done.
Did anyone actually read his last paragraph? Nick is saying the same thing he said in his previous "heresy", just in a quieter sort of way. Last time he was nearly burned at the stake for what he wrote. Nick has wised up, but he's not given up.The long prelude criticising Bush is a smokescreen. Last week he writes how small government is a dead issue, and now suddenly it is the cornerstone of the conservative cause, and should be trumpeted from the rooftops? No way. The last paragraph, and I, Heretic is where the meat of his argument lies.
... for bothering to read the article before commenting.
Re: Social Security (SS) reform has not been rejected by any voters.
Well, no, they haven't voted on it, but every poll, not to mention the various "town meetings" held earlier this year, have shown a high level of public skepticism and outright distrust. Pretty much what people felt about ClintonCare in 1994: everyone and his brother wanted to see some sort of healthcare reform but the proposal on the table displeased everyone.
Do I think Social Security needs to be reformed? Yes indeed! But now is simply not the right time for it. Were still too close to the market meltdown of Y2K and private accounts are not going to fly. Moreover I suspect that it's going to take a Democrat to do the job, much as it took Nixon to go to China. And that's not impossible either sincet he Clinton administration was trending in that dircetion late in the 90s.
that any tax reform undertaken now is more than spin and rhetoric! Otherwise it would hardly be worth the effort.
but the GOP had won the congressional races the same, we'd have good spending restraint for the same reason we did in the 90s: the gridlock of divided government. Of course the $64,000 question is whether Kerry would have been reliable on national security, and I well understand people's fears there.
... among those whose literary absorption rate is under the lesser of 100 words/2 paragraphs.
Re: But social security and medicare are true accounting nightmares. They are ponzi schemes that will not go away with a growing economy.
A growing economy accompanied by some sensible reforms like raising the retirement age and pegging COLA raises to prices not wages would indeed resolve the problems of Social Security quite handily. Medicare however can only be reformed in the context of total healthcare reform.
after this brilliant commentary?
- I'd agree that there are questions about how Conservative the President is.
Who is it you think you're agreeing with?
a clue until he reads a poll about whatever he needs to have a clue about. The man is an intellectual vacuum and a moral blackhole.
Because those who do bother to take that second look and actually think things through would find out that he is NOT selling out principle on things he has proposed.
It's not just Katrina - it's No Child Left Behind, it's his guest-worker program, it's even the prescription-drug benefit they added to Medicare.
This is not a swipe at Mr. Danger - but rather at a common, garden-variety smallish woodland troll who appears to have been dispatched to write his "How I Got Banned at RedState" Kos diary - which should appear in 3... 2... 1...
as the loser of admirers, rather than the President, as you may have inferred (or not), there is doubtless a strong correlation! And yes, it's a shame.
of Jonathan Swift's "A Modest Proposal"; kudos to you Nick Danger.
But my concern remains. Let's grant that everything you've said is true and correct; Bush is playing a deep game of trying to change the way that conservatives run government. He's playing go, and we're stuck playing chess. Fine.
My concern remains in that his successes to date have indisputably increased spending. You peg your hopes on initiatives that have yet to be passed and signed into law. It occurs to me that Congree is awfully good at spending money, and awfully bad at reforms in Social Security, Medicare, Medicaid, and the tax system. If Bush is able to get Social Security reform done, if he's able to reform Medicare, if he's able to overhaul the tax code in such a dramatic fashion, then everything may turn out the way you hope.
But what if he loses on all the big battles, while winning on all the spending battles? What if he only succeeds in getting NCLB, Prescription Drugs, and Katrina/Rita Relief & Rebuilding passed, while tax reform and SS wither on the vine?
This round of questioning isn't so much about the President. It is more about the Republican Party in general. It's more about the Congressional leadership and the rank & file in decisionmaking positions. If Bush is playing the deep game, are they playing along? If SS is any indication, they're not. And we fiscal conservatives need to be concerned about that.
-TS
This is a great debate and one that I have not decided on but lean a bit left from the purist position as so greatly articulated by Walter Williams, while also admitting that Dubya and the pork GOP house has been too liberal even within the neo- camp.
http://www.townhall.com/columnists/walterwilliams/ww20050921.shtml
see Goldberg and sSantorum/Smith links and would love your thoughts. What keeps ringing in my ear are the oft recited George Will critique of the American people as philosophically conservative but operationally liberal majority (middle class tax perks, etc) and the deafening silence of actual proposals to cut. Although i did note the recent proposal by house repubs and the pork cut proposals.
But isn't the real money in medicaid/medicare/soc sec?
love all your thoughts
that some others caught on to that clever packaging of thos story. The bulk of it is certainly legitimately an area of concern to us, but in the last paragraph, you give us reason to think that the light at the end of the tunnel is not a train.
There is a method to W's madness. Even the Px bill is part of a reform long term. W's way may be the only realistic way to wean us all from the govt tit.
Nick Danger: where's the fire?
The liberal/conservative thing is a smokescreen -- Bush's governing ideology is retention of power. Ideology is merely a means to that end --
This was a very nice little article, and a good read. Nice job.
has taken such a risk free course with the Iraq war and soc sec reform. For the dangers of status quo maintenance see the dem party decline under Bill Triangulation Poll Driven Clinton
and prevent defense in the NFL.
- My concern remains in that his successes to date have indisputably increased spending.
You know, I'll bet that concerns him as well. Here are all these people who have been screaming for years about cutting spending, who say they want smaller government; who last year couldn't even score a hit on the Corporation for Public Broadcasting.
So he comes out with a proposal that is sorely needed anyway, that is a Good Thing just on its merits, but also has the amazing properties of taking money away from the Congress so they can't spend it and starting us down the road toward privatization and eventual elimination of a major government bureaucracy.
And what does he get for this? Grief from the Democrats, sure. He expected that. But what about all the people who wanted smaller government? Where were they? What about all the people screaming for less government spending? Where were they? What about the two generations that are out there right now who know for a fact that they are going to get screwed by the current system? Where were they?
Who has the Congress really heard from on this matter? Screaming liberals. The media. The AARP.
What were all these Fiscal Conservatives doing while this proposal to shift money out of a government slush fund and into private retirement accounts languished on Capitol Hill? I know, because I watched it. They were picking at the nits. They harrumped that what we really needed to do was abolish Social Security altogether, as though that was gonna happen in one fell swoop.
While Cinnamon Cindy got all the media attention down in Crawford, the President flew out a couple of times to make still more speeches to drum up support for this proposal. Is this helping? No. Conservatives would rather crab about spending money on hurricane victims ("Look at those idiots who have lost their homes! It's their own *#&#% fault!") than do anything useful to take money away from the Congress.
Day after day we watch the left drive itself into the ground because all they do is complain. That's all they can do, because they don't have any leadership and they don't have any ideas.
We have a leader, and he has a great idea. But instead of helping him get this great idea enacted into law, all anybody wants to do is complain about the idea and complain about him because he isn't complaining, too.
I do not see this as being especially useful behavior.
Bush was re-elected because he ran as a war president -- given the razor-thin margin of victory, it is unlikely that he would have a second term if it were not for the votes from those who did not what to change leaders in wartime. And social security is a non-starter: as soon as it became evident that it was an albatross around Bush's neck (i.e., loss of political capital), he dropped the subject.
It's like in The Army, you know – The Great Prince issues commands, founds states, vests families with fiefs. You do remember that record, right Bradshaw?
Bush's Social Security proposal takes money away from the government and starts us down the road toward weaning people away from a government-administered pension system. Ultimately this would lead to the abolition of the crown jewel of the New Deal.
And you say Bush's governing ideology is retention of power. You're not part of the solution, are you? You're part of the precipitate.
Kerry advocated that the UN decide when the US can defend itself, repeal of tax cuts, and ran as war hero. No liberal conservative differences?
Losses are losses since 1994, whether described as razor thin or not.
The 40% msm poll pres is about to get his man on the libs last bastion of power and continues to commnad an army that kills terrorists everyday rather than seeking indictments agaist them as Kerry desired.
The real polls that matter are on election days and the left has less babies and has for over 40+ years. And the differences are real.
Off to spend the tax cut!
I believe in a government administered pension system, as do the overwhelming majority of Americans. I believe that Social Security is one government program which works very well. It prevents people from starving in old age and in the event of a spouse's death. I regard these as good things.
The issue is that due to changing demographics (i.e., more retirees and less workers to support them) the system needs to be adjusted to stay solvent. This can be done with relatively modest increases in payroll taxes and equally modest reductions in benefits.
Bush is trying to have it both ways: he is marketing his plan as the best way to save Social Security, yet when you look under the hood, he has chosen a quick route to gut the plan. As they say: how can you be in two places at once when you're not anywhere at all?
- Kerry did not run on a platform of giving the UN veto power over US decisions. You are misquoting him and taking him out of context.
- What is contradictory between being a liberal and being a war hero?
- There is a vast difference between a 500 vote margin in Florida along with a 500,000 vote loss in popular vote compared with Nixon/McGovern or LBJ/Goldwater. LBJ and Nixon had mandates.
- Kerry did not advocate indicting soldiers.
great points
I think the key statement you made was regarding starvation prevention.
That was what the original purpose of soc sec was and had it stayed that way, as a "supplement" as FDR described, we wouldn't have as big a problem.
The real fear that I think the liberals have is that Bush's plan would democratize capitalism, making all American's stock holder property owners!! In one sense, this is the ultimate culmination of Jefferson's dream.
And the psychological effect would be the death knell of dependency liberalism, ie socialism.
And Bush's proposal is means tested!
that the US must meet before using force, that required foreigners to grade?
No contradiction, just that it wasn't that Dubya "ran" as a war president. It was the fact that we are at war and didn't want to give the reins to a misprounouncer of Ghengis Khan traitor. (he met with the vietnamese enemy leader in paris where he adhered and gave aid and comfort before 2 witnesses)
Mandates? Vast difference? Ask Kerry and Saddam.
Kerry
advocated a return to an emphasis on crimnal prosecution of terrorists as opposed to war.
Is this the same Nick Danger who wrote this?
http://www.redstate.org/story/2005/9/19/111143/226
The one who proclaimed Bush to be a fiscal genius?
The one who rejected smaller government as a feasible goal of today's politics?
The one who thought huge spending increases were fine as long as they were "squirted" at conservative programs?
Just checking.
The fear is not that all Americans become property owners -- rather, the fear is that Americans who are financially vulnerable are subject to the whims and fluctuations of the stock market -- I would argue that Social Security, as it exists today, is also means tested and it works very well --
- Is this the same Nick Danger who wrote this?
Yep. Are you one of the guys who didn't read the article before hitting 'Post'??
The bottom line is that we are all vulnerable to economic downturns whether we own stock or not. Plus, Bush peoposed that such a small % be vulnerable and then only voluntarily.
Bush's plan would greatly enhance soc sec progessivity.
The real risk of Bush's plan is Congress getting to choose the safe stocks! and the very real unkown of so much stock being less subject to market decisions to buy and sell.
Which is why the best solution may be a greatly scaled down soc sec program that only addresses stravation prevention and an optional sepatrate plan that allows full private control.
great discussion by the way
Well, obviously it depends how you structure it -- my suggestion would be to have the Social Security trust fund (and not individuals) have a percentage of assets in US and international stock markets -- that way the risk is broadly diversified, and presumably managed better than individuals doing it by themselves.
The broader issue is how to make Social Security solvent for the long term. Bush himself admitted that privatization would not affect the solvency of the system. The only levers to make the system solvent are to increase taxes and/or decrease benefits. If Bush were a true leader, he would advocate this.
"I believe in a government administered pension system". SS is not a pension program, it is a welfare program paid for by current SS tax payments. If it were a pension program, my account would actually have a current balance not an entitlement to a payout stream. Who told you it was a pension system?
It took courage and leadership to even use the words social security reform in the same sentence and I don't actually agree with Dubya's concession of privatizations LONG TERM effect on solvency. Plus, his progressivity does reduce benefits for the more affluent.
My thought is that over time, more and more voters would demand that greater percentages of their contributions be privately controlled which would enhance solvency.
The real solution is to have it be what FDR proposed it to be and which you alluded to originally" starvation prevention for the elderly rather than a poor 401k alternative for lower income workers that leaves them with no money to invest and save.
This program hurts lower income workers given the minimum contributions required.
- The only levers to make the system solvent are to increase taxes and/or decrease benefits.
That is true, but there is absolutely no utility in doing either now. This is a pay-as-you-go system, remember? There is no "trust fund." The money they take in today is paid out immediately in benefits. If there is money left over (which there is right now) it is immediately borrowed by the Treasury and spent by the Congress.
The is why the "national debt" is increasing so rapidly. The media and the politicians sold the public on "saving Social Security" back in 1989 or 90 by significantly hiking SS taxes. All that did was put more money in the pot that Congress promptly borrows and spends. So both spending and the national debt have gone up, and there is still nothing in the "trust find" except claims on future taxpayers.
- If Bush were a true leader, he would advocate this.
No, he would be a liar. He'd be telling people that if they agree to pay higher taxes now, something wonderful will happen in the future. But in fact the same thing would happen again, because it is the only thing that can happen. The Congress would borrow the money and spend it, and come 2018 or whenever, when they have to start drawing down this "trust fund," the only way to get the money will be to raise taxes.
The taxes to pay benefits have to be raised then. Raising them now just hands the Congress more money to spend now. And you still have to raise taxes, and by the same amount, then.
People are going to be very angry when this happens. They are going to think the government lied to them. And they will be right. But it will be too late to do anything but pay up or starve granny.
This is a manageable problem -- either with a lockbox or some similar device -- set the Social Security payroll tax commensurately with demography and put the current surplus in Swiss francs until they are needed -- or whatever -- the problem you cite is logistical and can be overcome.
If you want to be absolutely precise, it is an income redistribution system where workers are taxed to support retirees, widows, and orphans. It is a pension in the common sense of the word.
- the problem you cite is logistical
No, it isn't. It's demographic and it's across the industrialized world. Virtually every first-world country is staring at this same demographic time bomb. Come the 2nd and 3rd decades of this century, all of us are going to be out there trying to borrow money at the same time.
To really understand this problem, you have to get away from the idea that 'money' is a store of wealth. I know the textbooks all say it is, but they lie. It only looked that way because there were always significantly more people in the generation behind than in the generation ahead. Once that is no longer true, as will happen Real Soon Now, taking 'money' of any kind even gold, diamonds, whatever out of storage and into the economy places demands for real goods and services onto an economy that has only two workers per person trying to redeem 'money.' There's no more "stuff" to buy... just more people with 'money' trying to buy it. Money that appears out of the past is indistinguishable from new money created from nothing as a part of monetary policy. If it arrives as too much, too soon, i.e. faster than the economy is growing, all you get is raw inflation.
This problem is not about money. It's about the amount of goods and services that can be produced, and that is a function of how many people are working to produce the stuff. With only two workers per retiree, the retiree represents a claim of something like 20% of each worker's income. This while the worker has kids to support. It's gonna get ugly. And schemes to "store money" cannot fix it.
What Bush's proposal has going for it is that it would divert money into the private capital markets, where it could be turned into property, plant and equipment that would enhance the productivity of the workers we will have. If we can't have more workers, we can at least try to make the ones we will have more productive. That won't "solve" the problem, but it will help. The only other thing that will help is immigration, which is why both parties seem to be playing games with the public on the subject. They know darn well what's coming, and one fix is to import people. So they're doing that, too.
It is significant. Its the difference between having a passbook representing a savings account and having a .38 representing the ability to holdup a 7/11.
I agree with everything you say except the statement that "What Bush's proposal has going for it is that it would divert money into the private capital markets, where it could be turned into property, plant and equipment." The best way to do that is to eliminate the budget deficit so a) we have a more stable currency because we are not selling treasury paper to foreign central banks and b) the government does not have to compete with private industry for capital. Diverting Social Security receipts into the stock market would at best be a temporary fix. The only viable long-term solution is to have industries which are robust and unencumbered by government interference.
It's the difference between a passbook savings account and collecting tolls on a highway. The implication that Social Security is akin to a robbery is fatuous. I doubt you will find many people who object to Social Security, either in principle or in practice.
I am an economics major (lawyer) and recognize the conventional wisdom of your argument, but doesn't post 1983 history refute it? We have a huge capital surplus and low interst rates. i will say that when Clinton entered offcie with high interst rates, that he was correct to follow Greenspan's advice to cut the deficit to send a signal to the bond markets, but it was all psychological, not mechanical.
With foreigners financing the debt and economic growth allowing repayment with cheaper dollars, it seems the old rules don't apply and haven't for 25 years. I think this is due to monetary policy coupled with low tax rate incentives.
And what does he get for this? Grief from the Democrats, sure. He expected that. But what about all the people who wanted smaller government? Where were they? What about all the people screaming for less government spending? Where were they? What about the two generations that are out there right now who know for a fact that they are going to get screwed by the current system? Where were they?
Uh, I don't know about other fiscal cons, but I do believe I was screaming (albeit in a composed and coherent manner) in support of the President's SS program. Were he to actually propose a reform of the tax code, I'd be there supporting that too.
I don't quite get your position, to be blunt, Nick. On the one hand, you appear to be saying that the electorate won't vote for politicians who are actually small government fiscal conservatives. On the other, you appear to be saying that Big Government Conservatism is a deep strategy to defeat liberal pseduo-socialism. And then on the third hand -- presumably a product of mutation -- you appear to criticize fiscal conservatives for doing nothing but complain.
The explanation, I suppose, is that you are advocating a new formulation of what it means to be a conservative. Unless I'm misreading you totally, your brand of conservatism advocates:
- Social conservatism (pro-family, pro-life, pro-gun, pro-public morality)
- Strong defense
- Robust central government, with expanded powers, but utilizing a market-centered methodology instead of a bureaucracy-centered methodology for social programs.
That isn't conservatism as I recognize it; and I suspect that I'm not alone in this. What you describe seems to me to be the socially-conservative Democrat position.
Day after day we watch the left drive itself into the ground because all they do is complain. That's all they can do, because they don't have any leadership and they don't have any ideas.
That is true; but when one of the KEY ideas that we have, that makes our complaints more than simply whining and partisan politics, is that government is a necessary evil whose power and reach must be minimized, and then you propose to throw that idea out, I think it's fair to ask whether what is left is truly a set of ideas we should want to adopt.
Besides, you still need to address the scenario as you've painted it. What happens if SS reform, tax reform, and those Big Ideas To Change Government wither on the vine, while the spending bills and entitlements continue to get passed -- not because Bush is a bad man or a bad leader, but because politicians of both parties can't stop themselves from spending, spending, taxing, and spending? Are you not pinning your hopes on events that have not yet transpired?
-TS
Well, yes, until the day when the foreign central banks decide they are no longer interested in financing the US fiscal and trade deficits ...
The other scary things in your post: "repayment with cheaper dollars" sounds suspiciously like inflating the currency to repay debt ... and also the idea that classical economics have been refuted reminds me of the scariest words in investing: "it's different this time" ...
I can choose to take the toll road without sanction. If I choose not pay my SS tax, that would be fatuous.
Foreign central banks invest here for their own benefit not as charity for us. And they would be hurt more than us.
The debt and deficits are within safe historical ranges as % of gdp. I want a smaller govt eventually, but primarilly because big givt reduces freedom, not due to fera of current debt levels.
Rich people with high debt are surely better off than paupers with balanced budgets. So much the more for this nation with the safest economy within which to invest in the world.
Surely we were wrong to worship at the holy grail of balanced budgets in the late 20's. And Milton Freidman is very persuasive on monetary policy was the key in 1929, among other things, like stupid givt policy.
- On the one hand, you appear to be saying that the electorate won't vote for politicians who are actually small government fiscal conservatives. On the other, you appear to be saying that Big Government Conservatism is a deep strategy to defeat liberal pseduo-socialism. And then on the third hand -- presumably a product of mutation -- you appear to criticize fiscal conservatives for doing nothing but complain.
Yes. If we start with a third of the voters not paying any income taxes, who see government spending as free money, and we add to them the congenital do-gooders for whom "compassion" means spending OPM, we end up with a voting majority.
This is why, even with GOP majorities in both houses, we couldn't even take a bite out of the Corp. for Public Broadcasting last year. If ever there was an activity that government could stay out of, it's having radio and television stations. But nooooooooooo. "They're killing Big Bird!" yell the media. And our GOP Critters run for the hills. This happens every time. If we keep doing the same thing over and over, expecting a different result, is that not insane?
I'd argue that what you call "Big Government Conservatism" is a necessary measure with the specific objective of undoing 60 years of the Democrats teaching their pets to beg. We stop treating them as if they were too stupid to breathe, and offer them a way out of this figurative "ninth ward" that the Democrats have been keeping them in. Make no mistake: this is a 30- or 40-year project. It took 60 to get into it. But when we're done, we don't have this huge underclass anymore. There will always be the mentally ill, the infirm, and so on, but we do not need to have entire cities full of people who have been trained to wait for the government to come and get them. With the huge underclass gone, we won't need huge chunks of the current welfare state. But you can't get there by just saying "cut it" because then you're "starving the poor" and that's not a strategy. First you have to get them to not be "the poor," even if that costs money in the short run.
And yes, I am criticizing all these people I hear who think that screaming about "spending" and calling for "smaller government" is going to produce anything but the same result it has always produced. This screaming has been going on among conservatives since I was a kid. Eisenhower was President. Look around you. Is the government smaller? Is spending down? This is what decades of screaming about government spending has wrought: nothing.
Now comes Bush with an actual plan to get money out of the hands of Congress, and conservatives let themselves get rolled by the AARP.
Say this for the SoCons... they put more energy into keeping Terri Schiavo alive then the FisCons did in trying to get real, conservative reform of SS. Now the Pubbies on Capitol Hill say it's "dead." Why? Because the silence from their constituents was deafening. Nobody seemed to care. But now all of a sudden the Small Government Chorus is back in full-throated roar about "spending." If people act stupid, they cannot complain when they get stupid results.
- That is true; but when one of the KEY ideas that we have, that makes our complaints more than simply whining and partisan politics, is that government is a necessary evil whose power and reach must be minimized, and then you propose to throw that idea out...
I'm not proposing to throw the idea out. I'm proposing to try something other than complaining, and yes, whining, as the method of achieving that idea. The "complaining" strategy does not work. We know that because conservatives have been doing it for sixty years to no effect.
Conservatives do not have a voting majority. If we are ever to have smaller government, we must address the Other Peoples' legitimate concerns about what is going to happen to all these people who for three generations have been taught to believe that life consists of waiting for the check to come on the 1st. "Cutting off their checks" is not an answer that the Other People will accept. We need a different plan. Bush has one. Throwing spears at him and then returning to the whining and complaining is not what we need here.
- What happens if SS reform, tax reform, and those Big Ideas To Change Government wither on the vine
What, are you waiting for the Giant Hand to come and stop them from withering? There is no Giant Hand, remember? If these things are not to wither, we have to do some actual work. We can't just sit behind our keyboards, play armchair general, and crab. That's what too many people did with Social Security reform, and now it has "withered." The Giant Hand did not come to save us.
Next up is tax reform. At stake here is the fact that a third of the voters have no reason to care about government spending because they don't pay for it. Getting serious tax reform is the single biggest thing we can do to change the voting climate from one that always sides in favor of more spending, to one that starts to care about how much all this costs. If people sit on their hands again and wait for the Giant Hand to come and pass it for them, a huge opportunity will have been wasted.
I agree that there are times when it is a good thing to run budget deficits -- for example, to bring the country out of recession. It is also true that the current ratio of debt to GDP is within historical ranges, albeit at the high end of those ranges. However, if, as you say, you are concerned about demography and the ability of a smaller group of workers to support a larger group of retirees, then you should not advocate running a deficit. These are the seven years of fat, it's time to prepare for the seven years of lean.
There is a disturbing trend in this country whereby people put short term greed and self indulgence above building long term foundations for the future of the country. You can see it from the highest levels of government to the lowest levels of the corporation, from the highest levels of corporations to the lowest levels of government.
High levels of stock ownership on which people depend for retirement will cause people to let companies slip by with all sorts of destructive behavior that is not now tolerated, if they will benefit from the behavior in retirement. Imagine if 10 million people depended on GM stock for their retirement. Do you doubt they would support invading other countries and killing people, polluting the environment, and detroying precious wilderness so that profligate consumption can keep GM competitive? Isn't that what we are doing now in a way? Cheap oil is keeping GM retirees from being dumped on the US taxpayer.
IMO, Bush was too crafty by half in arguing for PRAs.
Social security is an enormously popular program. It's popular because, sooner or later, it puts money in the pocket of pretty much every working person.
Lots of conservatives dislike SS because it's an entitlement, involves government in things they don't think government should be doing, and encourages people to rely on government rather than themselves. Those are pretty abstract arguments, and aren't very compelling to most folks.
There are a couple of strong arguments Bush could have made for a move to PRAs. He could have said:
- SS as presently constituted creates a big slush fund that Congress raids regularly, which takes money out of your pocket.
- You can make more money out of investments in equities and other more productive instruments than you can out of T bills. Plus, the funds behind the T bills are coming out of your pockets anyway.
If he tried really, really hard, he might also have been able to sell:
3. It's not good for people to rely on government to meet all of their needs. We need to move to a political culture of self-reliance and independence from the feds.
The argument the President actually made was:
1. SS is going to start running out of money in a couple of years and your benefits are at risk
The argument the President actually made was thin on the merits, and did not address the fundamental resistance people have to moving to a PRA style plan. Instead of arguing clearly for a change in the relationship of government to people, he emphasized trumped up scare stories.
If you want to create a change in political culture, which is what you appear to be arguing for, then that is what you should propose and argue for. That's what FDR did, and the country got behind him. Otherwise people think you're full of crap, and won't trust you. My sense is that Bush didn't think that would fly, so he relied on scare stories that were thin, beside the point, and easily seen through. And, his opponents won the day.
People might buy the need for a change in policy if it is presented in an honest and straightforward manner, and if their stake and interest in the change is made clear to them. That is called leadership. It's hard, and involves risks.
People will not respond to direction that appears to them to be based on thin evidence. Especially where their pocketbooks are involved. That's called credibility, which is based on trust. That's also hard, and must be earned.
I sincerely hope that what Bush is about is not trying to slip fundamental changes in policy past the American public under some kind of false flag. That would be insulting, it would fail, and any actual useful benefit that might come from the change would be lost. What I do hope is that if the President has some useful change in policy to offer, that he argue for it plainly and clearly on the actual merits that he believes it offers, and then leaves it to the American people to make their decision.
You write:
Kerry favored PAYGO, which means spending must be paid for, which naturally puts a brake on spending.
This is a talking point. It has been repeatedly demonstrated to you that it is a talking point. You therefore know or should know that it is a talking about.
Bringing people in now just adds to future liabilities. Today's thirty-five year old immigrant is the social security beneficiary of 2035. In the meantime, SS doesn't need his taxes to be solvent, and the money just goes into the "trust fund" where Congress spends it on... who knows what? Congress will always find a way to spend the money. Besides, if said immigrant is relatively less-skilled than the population at large, and he probably is, he's going to be paying less in taxes than he takes out anyway. He will belong to that bottom third of the electorate which, as you described, doesn't care about taxes because it doesn't pay them anyway.
As for future immigration, there are two immediate objections that spring to mind. Why would an immigrant come here legally thirty years from now to pay positively onerous taxes to support our old people who didn't have the sense to reproduce themselves? If he comes at all, it will be off the books. Secondly, the rest of the world outside of sub-Saharan Africa is undergoing the same sort of demographic transition to replacement or sub-replacement fertility levels. Populations will continue to grow due to "demographic momentum," but there won't be an infinite supply of young people who will prefer taking care of us as opposed to their own parents. Finally, assuming that our current immigration policy continues, and that non-Hispanic whites become a minority around 2050 as a result, ask yourself how eager the largely non-white young and working population of this country will be to endure the sort of taxation necessary to support the largely white population of retirees? Not very, I would hazard to guess.
This is why, even with GOP majorities in both houses, we couldn't even take a bite out of the Corp. for Public Broadcasting last year. If ever there was an activity that government could stay out of, it's having radio and television stations. But nooooooooooo. "They're killing Big Bird!" yell the media. And our GOP Critters run for the hills. This happens every time. If we keep doing the same thing over and over, expecting a different result, is that not insane?
I'd argue that what you call "Big Government Conservatism" is a necessary measure with the specific objective of undoing 60 years of the Democrats teaching their pets to beg. We stop treating them as if they were too stupid to breathe, and offer them a way out of this figurative "ninth ward" that the Democrats have been keeping them in. Make no mistake: this is a 30- or 40-year project. It took 60 to get into it. But when we're done, we don't have this huge underclass anymore. There will always be the mentally ill, the infirm, and so on, but we do not need to have entire cities full of people who have been trained to wait for the government to come and get them. With the huge underclass gone, we won't need huge chunks of the current welfare state. But you can't get there by just saying "cut it" because then you're "starving the poor" and that's not a strategy. First you have to get them to not be "the poor," even if that costs money in the short run.
And yes, I am criticizing all these people I hear who think that screaming about "spending" and calling for "smaller government" is going to produce anything but the same result it has always produced. This screaming has been going on among conservatives since I was a kid. Eisenhower was President. Look around you. Is the government smaller? Is spending down? This is what decades of screaming about government spending has wrought: nothing.
What is even more amazing, I think, is the way that conservatives are ready to follow the Republican Study Committee into the same sort of stupid, useless, banzai charge that got us the "Mediscare" campaign in 1995. Anyone remember how Bill Clinton and the media turned that and eventually got Bill Clinton four more years to spend chasing interns and blithely ignoring the growing threat?
We're not going to be able to cut federal spending until we change the minds of the American people. And what has been tried for the past fifty years has been an abject failure.
I work for a company which was founded in 1999 by a guy who came over from India with $400 in his pocket. This business now hires about 200 people and is growing like crazy.
The last company I worked for had about two dozen patents -- most of them developed by H1B workers who came from abroad.
There are many flaws in your argument. Chief among them is that for two centuries, American industry and culture have been continually revitalized by successive waves of immigration. And in each era, many of those who lived here at the time saw imminent doom in the latest wave.
Another flaw is the assumption that those who come here to succeed will inevitably stay and become retirees -- in fact, many immigrants ultimately return to their native country.
My grandparents emigrated from Europe in the early 20th century. Their children and grandchildren had rich and full lives in America. Be it far from me to close the door on the next guy who wants to come here, regardless of his ethnicity.
the whole immigration debate here, since it's off topic, nothing in your post even touches upon what I wrote. Immigration may be desirable for other reasons, but immigration as currently permitted by the United States is not going to save government transfer programs because most immigrants don't go home, because today's workers are tomorrow's transfer payment recipients, and because most of them earn lower wages than native workers anyway, meaning they don't pay much if anything in taxes now and won't store up much wealth for the future. We could craft an immigration policy to maximize economic benefits for American natives, one that would make it easier for the Indian founder of your company and others who would would bring intellectual and financial capital to this country, but we don't have one right now.
Allow me also to ask rhetorically whether, your grandparent's experience notwithstanding, it is possible that the kind of immigration policy that made sense for the United States in "the early 20th century" makes sense for it today. Or is it possible that America's conditions and circumstances have changed sufficiently that what may have made sense in 1910 doesn't make sense now? Maybe taking in the "refuse of your teeming shores" isn't good policy anymore, even if it was 100 years ago.
There are many flaws in your argument. Chief among them is that for two centuries, American industry and culture have been continually revitalized by successive waves of immigration. And in each era, many of those who lived here at the time saw imminent doom in the latest wave.
Firstly, immigration to the US has ebbed and flowed across the four centuries since European settlement began. It has not been continuous. Most recently, immigration was severely curtailed between 1924 and 1965. Before that, it varied according to economic conditions here and in Europe. Secondly, what do you mean by "revitalized?" Or is this just multi-culti cant? Thirdly, who's talking about "doom?" Absorbing millions of foreigners causes social disruption. It did last time, and it's doing so now. Whether you find those changes desirable or not depends a great deal on your initial point of view. Assimilation, when it occurs, takes three generations or more. That means that you and I will both be very old, if not dead, when the grandchildren of the immigrants who are already here are assimilated. If we keep adding more, we push that date further into the future. That is, if they will be assimilated, something that seems doubtful given that there are now government benefits attendent on not assimilating, and that any talk of an American identity is seen as repressively "exclusive," and therefore harmful. But, I digress.
Here is Kerry on pay-as-you-go. The "talking point" is reality, and the "Known Fact" is factual:
Q: You pledged that you would not raise taxes on those making less than $200,000 a year. How can you keep that pledge without running this country deeper into debt?
KERRY: I'll tell you exactly how I can do it: by reinstating what Pres. Bush took away, which is called "pay as you go." During the 1990s, we had pay-as-you-go rules. If you were going to pass something in the Congress, you had to show where you are going to pay for it and how. Pres. Bush is the only president in history to [rescind pay-as-you-go]. I'm going to reverse that. We're going to restore the fiscal discipline we had in the 1990s.
an extension of the Graham-Rudman-Hollings deficit reduction act that also required every new appropriation to identify revenues or budget cuts to pay for it. And it was ignored. As was "pay-go." "Fiscal discipline" in the 1990s was a function of increasing tax revenues.

the adjective "fiscal" before "conservative", and then I think you will indeed have a true statement: Bush is not a fiscal conservative.
As for Social Security reform the voters have pretty much rejected it, just as they rejected ClintonCare ten years ago, and it's time to move on.
But I wouldn't diss tax reform. While I don't think the income tax is going to bite it, I do think there's a good chance for some major tax reform. Reagan pulled it off in 1986, no reason why Bush couldn't pull it off next year or even in 2007.