So the Social Security destruction scam is gearing up. The following passage from Jonathan Chait's September 20, 2000 New Republic article is worth bearing in mind:
Bush's approach to these economic issues places him at the far end of the Republican right. His proposals on health care (medical savings accounts) and poverty (faith-based assistance) are standbys of the Heritage Foundation and the American Enterprise Institute. Yes, he's proposed modest spending increases on schools and long-term health care, but they are dwarfed by the much greater costs his tax cut and Social Security privatization plans would impose.
And it's not just the relative size of Bush's huge conservative proposals that renders his tiny liberal proposals moot. His tax cut and Social Security privatization are designed to bankrupt and delegitimize government. Bush's rationale for cutting taxes is that the government is projected to run a large budget surplus. But the government also has a large debt and an even larger set of unfunded obligations that will come due when the baby-boom generation retires. When fully phased in, Bush's tax cut would consume the available budget surplus, paralyzing the federal government in exactly the same way Ronald Reagan's tax cut paralyzed it. The net size of Bush's tax cut is 1.5 percent of GDP, compared with 4 percent for Reagan's 1981 cut. But the 1981 tax cut was quickly followed by tax increases the following two years, diluting the net effect to 2.2 percent of GDP. Bush's tax cut, then, is just one-third smaller than the one that caused a decade and a half of red ink.
Bush's Social Security plan would compound the problem. In the context of Social Security, the word "reform" has, in the past, meant a technical fix to keep the system solvent. But Bush has something else in mind. His idea is not to reform Social Security but to transform it into something completely different. As it stands, Social Security is a system of social insurance designed to keep the elderly, widows, and the disabled out of poverty by granting them a guaranteed minimum income. Unlike Bob Dole in 1996, who proposed no changes in the program, Bush has proposed turning Social Security into a series of personal accounts, whereby every individual would provide for his or her own retirement. If successful, privatizing Social Security would be the most dramatic change in the relationship between the individual and the government since the New Deal.
Financing privatization would have a fiscal effect similar to that of Bush's tax cut. Right now, Social Security is mainly a "pay as you go" system. That means today's retirees are being supported by today's workers. But if you want today's workers to put some of their tax dollars into their own accounts, then you have to figure out a different way to pay for today's retirees. Harvard economist Martin Feldstein, a Bush adviser, has proposed borrowing $3 trillion over the next decade to cover this "transition" cost. That, of course, would make it difficult for the government to do almost anything else in the meantime.
But the true radicalism of Bush's Social Security proposal isn't even its potential to block all spending for a decade; it's the plan's longer-term effect. Conservatives understand that Social Security, as the most popular federal program, provides an enduring connection between the average citizen and the national government. Once this link is severed, conservatives believe, voters will cease to vest in the government any responsibility for protecting them from the hazards of the marketplace and will acquiesce in the dismantling of the entire welfare state.
One of the reasons Bush's conservative policies have not received the same scrutiny as Gingrich's is that Bush announced them after his public image as a moderate had already taken hold. This led the press to conclude that his right-leaning policies were insincere sops to the right, designed to head off a primary challenge from Steve Forbes. The problem with this theory is that Bush declared his most politically risky stance--privatizing Social Security-- after the primaries. The logical interpretation is not that Bush was pandering to his base but that, unlike his cowering allies on the Hill, he was willing to spend political capital in order to win a mandate to enact dramatic conservative reforms.
If the mainstream media hasn't recognized this, the right has. "Bush has been reliably conservative on the issues that matter," National Review editorialized in July, "His support for tax cuts and Social Security reform is more important than his spending initiatives--not least because if he succeeds on taxes and Social Security, it will be easier to limit government in the future." Exactly. Bush's candidacy shows that, beneath its packaging, today's GOP remains the most radical political party since World War II. The Bush campaign is not a repudiation of the Gingrich revolution--it is the vehicle for its fevered, unredeemed aspirations.
-- Benj
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