Thursday, October 28, 2004

Didn't need no welfare state...

George Will does a pretty good job summing up the dilemma faced by Democrats, not only in this election but in those to come. He makes the argument that economic issues don't have the same resonance in presidential elections that they once did:

Economic conditions have lost some of their political saliency because people understand that presidents have precious little control over those conditions -- and that better government policies, especially the Federal Reserve's monetary policy, and better business practices (inventory control, etc.) have made business cycles less menacing.

In the 50 years prior to the end of World War II, contractions were frequent and ferocious enough to fray the social fabric. There were three contractions of 5 percent of GDP, two of 10 percent and two of almost 15 percent. Since 1947 the most severe, that of 1982, was just 1.9 percent. Democrats' unavailing attempts to inflame economic hypochondria founder on a fact that John Makin of the American Enterprise Institute notes:


"By Election Day 22 years (264 months) will have passed since November 1982, and during that time the economy has been in recession just 14 months -- a mere 5 percent of the time. From the end of World War II through 1982, the economy was in recession more than four times as frequently (22.4 percent of the time)."

The traps awaiting both parties, of course, are Social Security and health care, and I'm not sure either party is adequately prepared to deal with these challenges. Another reason that economic issues have been of diminishing importance is because at least two generations of middle class Americans have had access to employee-provided health care and pension benefits. But the cost of private health insurance is skyrocketing, and more and more companies are cutting back or defaulting on pension benefits. I think Kerry's health care proposal is reasonable, but his promise to resist privatization of Social Security, while vowing not to raise taxes or raise the retirement age, means he is either living in fantasy land or pandering. Bush has no realistic plan to address rising health care costs, while his plan to partially privatize Social Security would require Americans to drastically change their saving habits (not a bad thing) and would incur billions in transition costs.

Perhaps by 2008, it could again be the economy, stupid.


12 Comments:

Anonymous Anonymous said...

It would be nice to know what, exactly, Bush or Kerry propose to do about either Social Security or health care.

I'm going to guess that Bush will propose a raft of private-sector solutions to buttress a flagging future for both.

While I believe there are promising, albeit wrenching, possibilities for SS from the Republicans (some sort of Chile lite for younger participants in a pay-as-you-go system), I'm not so sure about a GOP solution for health care.

Indeed, I can't imagine the Dr/Hospital/HMO PAC-drunk Republicans will do anything to challenge physicians on medical negligence, paperwork/records inefficiency and fraud, not to mention HMO abuse and craven hospital greed for profit.

These, perhaps, are aspects of the human condition policy won't touch short of turning our health care system into Canada. Shudder.

From Kerry, all we've heard are hazy references to a "plan" that isn't really a plan but a great number of funding promises we can't afford short of selling the Postal Service, Ninth Fleet and the U.S. Virgin Islands.

If Bill and Hillary couldn't get it done, why do I imagine a political dead weight like Kerry won't either? So far, the most illuminating thing he's flatulated from the stump is a bit of nonsense about a Department of Wellness that, apparently, had its genesis in the fervid brain of his wife who would be a candidate for taxpayer-supported mental health care if she were poor.

As it is now, she's rich, so "eccentric" ideas like that noodle-brained nonsense come off as talking points. Lucky us.

We also get the Kerryesque pandering to the aged base of his party without offering real solutions to the other end of the vote that actually seems to like him --young people. Don't they deserve an equal promise to REFORM social security for their futures?

Much of the middle -- middle class, middle age, middle America -- already have washed their hands of the man, so he has quite a sell ahead of him if he wins election.

I hate to say this -- and this statement will indict my own party and the *$%*?#*@ state of Iowa for foisting the single worst Democratic candidate for high office since, well, ever -- but the GOP has seized the high ground in the search for solutions to these problems.

Ugggh. I said it. The GOP is more responsible about Social Security reform and healthcare than the Democrats.

OK, I'm still here. No lightning.

Why do I say this? Because the Bushies are at least willing to consider reforms to SS, and Kerry won't because it's not politically expedient.

Kerry is no Clinton, who gave us deficit reduction and welfare reform. I fear four years of do-nothing navel gazing from him and a cabinet of Clinton flunk-outs and Mondale rehashings. No thanks.

Bush is a dithering fool, but at least he has the balls to touch the third rail. Do it, George! Go after Social Security!

7:20 PM

 
Anonymous Anonymous said...

And by the way, W Ketchup hawker, your title for this conversation likely lost everyone under, say, 35 years of age.

To them, Meathead is a sandwich at Primanti's and Archie is a pop-cultural reference to McDonalds.

7:29 PM

 
Blogger Jonathan Potts said...

Well, I'm under 35, but otherwise I agree.

As you know, I'm no Bush fan, but while he's not great at articulating his governing philosophy, he does have one. I expounded on it in this post:

http://jonathanpotts.blogspot.com/2004/10/right-on.html

When I hear Kerry talk about not raising the retirement age, it makes me want to slap him silly with a bottle of W ketchup. Americans live longer, most willingly work longer. True, you'd have to give people fair notice. It might have to be phased in. But it should be done.

8:50 PM

 
Blogger girl said...

This is slightly off topic, but I thought I'd mention it because it has a little bit to do with the retirement age. I'm in grad school for urban planning and we had a guest speaker (a green architect) a while ago in one of my classes who was saying that he went to a conference sometime this year and someone there presented his work on how children being born in 2003 and beyond are going to have a shorter life expectancy. Basically his study suggested that despite medical advances, our current lifestyles (our dependence on automobiles, for example) and general overuse of the earth's resources are hurting future generations' well-being. I buy that.

I just think our country's entire focus is really skewed. Sure, we can invest in better healthcare for our children and seniors and whoever, but we do so many horrible things to our air and water and basic things that we need to live that it almost seems parandoxical to focus on fixing the effects instead of the causes.

4:15 PM

 
Blogger Jonathan Potts said...

I'm a firm believer that our automobile-dependent lifestyles are severely damaging our social, physical and mental well-being.

But I still think we need to raise the retirement age.

5:39 PM

 
Blogger girl said...

What age do you think it should be raised to?

11:15 AM

 
Blogger Jonathan Potts said...

Well, it is already at 67. I'm not sure I'd advocate raising it to 70, as some have suggested over the years. 68 would be a good compromise, at the very least.

3:00 PM

 
Anonymous Anonymous said...

How about "Wellness Testing" for retirement benefits? The original age of retirement, 65, was arbitrary. It was confected at a time when most American male wager earners labored with their hands in heavy manufacturing, mining, agriculture, transportation, etc.

By the mid-60s, it was determined, most human bodies were hard pressed to continue with gainful employment.

In a post-industrial society, we find that people live longer, better, and labor in jobs very different from Depression Era careers.

The AFL-CIO, Teamsters, UMWA, USWA and my old bunch, UAW, make a salient point that, to me, is beyond dispute: It's tough to ask a line laborer, seaman, miner, trucker or stevadore to beat up his body beyond the early to mid 60s. That becomes cruel.

But is it too much to ask a teacher, clerk, data analysts, stock broker or auditor to work to 70? Not usually, it seems to me.

Why not means test? If someone can continue to do the labor until, say, 70-72 with no problems, then why not expect them to work? They can retire at 65 and get benefits, but they will be reduced benefits.

For the guy who toiled in the mines or the mills, maybe he should get out with full benefits at 63, because his body can take no more.

This is a point Edwards drives home, and, ironically, I feel that he's better equipped to bring this notion to fruition than Kerry, who is a pandering putz.

It would have to be phased in, of course, otherwise the boomers will go nuts (What, me save for retirement? Why should I do that when I can spend! spend! spend! because it's all about me! me! me!).

The 30-somethings and younger will clean up the mess they most certainly will make for social security.

10:52 AM

 
Blogger Jonathan Potts said...

Means-testing Social Security benefits might be an idea whose time has come as well. I realize that the principle underlying Social Security is that the benefits you receive are based on what you pay into the system. But why should the Social Security tax be different than the income tax? Plenty of people receive more in benefits from the federal government, either direct or indirect, than what they pay in federal taxes, and vice versa. The challenge, of course, would be devising a fair way to determine a retiree's worth.

1:40 PM

 
Anonymous Anonymous said...

At last glance, actuarial statistics indicate that senior retirees now receive $9 in payouts for every $1 they put into the system. This largely stems from the fact that people live far longer than they once did.

You can imagine the problem to be faced when a healthier generation of baby boomers retires.

Already, a significant amount of payroll deductions is shifted away from retirement investment and into feeding the daily cost of the federal government. That's beyond entitlements for the aged, and concerns the rest of the mix: Farm subsidies, defense, welfare, research, etc.

It's a shifting number, but let's give a pretty good estimate of the damage to GDP over 75 years (unamortized) of the continuing borrowing from Peter to pay Paul: $3.8 trillion, or about .78 percent of current GDP.

I won't scare you with the payroll deductions intended for Medicare insurance that are being spent on the federal budget. Beyond SS, that's too terrifying to even mention, and if health costs continue to escalate, will become a real kill on GDP growth.

OK, I give in: $10 trillion! Uggggh!!!!!


Basically, what I'm saying is that we need to return the Congress to a responsible, economically sound justification for SS reserves. If that means tinkering with the system to allow some privatization, OK. If that equals "means testing" for various occupations, so far so good.

I'm not a cooky libertarian, and there's a lot of hocus-pocus economics tossed in, but there's a handy calculator at CATO that suggests how things could be ordered differently:

www.socialsecurity.org/reformandyou/sscalc/sscalc.php

I'm not suggesting that you take it as gospel, but it makes a nice jumping off point for addressing our worrisome social safety net, and what better way to do it than getting to the core of our greedy, money-grubbing hearts?

Enjoy.

2:20 PM

 
Blogger Jonathan Potts said...

Assuming that their estimates of transition costs are conservative, then it makes a lot of sense. I like that it requires individuals to reach minimum income levels in order to make riskier choices. A kind of save-you-from-yourself clause.

2:33 PM

 
Anonymous Anonymous said...

Then it's resolved. Now run for Congress and un-screw this mess. I'll vote for you.

4:41 PM

 

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