Rick Perry On Social Security

I caught Sean Hannity's interview with Rick Perry last night. It covered a wide range of topics, but I was particularly interested in Perry's responses on Social Security.

Suffice to say, Perry has no clear idea of what he would do about Social Security. The essence of his replies were to say, about three times, that those on or nearing eligibility for Social Security would get their benefits. For middle-aged, 45 and under Americans, Perry punted.

Clearly, he's smarting from the 'Ponzi scheme' remark. He defended it, but was obviously worried that older Americans think he's for repealing the entire program.

Of course, those few of you who are regular readers of this blog know that, personally, I would repeal it. It's an illegal and ill-advised Ponzi scheme created by idiots nearly 80 years ago. It was badly-designed then, and it's worse now. Most importantly, one must realize it was never going to be solvent as a general-pool, defined-benefit scheme.

Now, I'll allow that Perry mentioned the various solutions others have offered, e.g., a general nod to anything Paul Ryan says. Perry vaguely mentioned an IRA-like personal account to be self-managed, as well as a conventional, government-run account.

Basically, Perry won't commit to any one solution. So he's either just playing politics, truly can't decide what he believes, or both.

Which leads me to this conclusion.

Whether it's Mitt or Rick, either one, flawed as they are, will be better than letting Wonderboy ruin America for four more years, come November of next year.

There May Be Hope For Truth On Social Security!

I was watching Fox News last night to see post-debate coverage of CNN's almost-unnoticed 'Tea Party' debate on Monday evening. I actually stumbled across it as it ran live, but mistakenly thought I'd found a rerun of MSNBC's GOP presidential debate of last week, so skipped on to other channels.

Never the less, the general sense of the pundits was that there are now too many fringe candidates in these debates, i.e., Herman Cain, Jon Huntsman, Rick Santorum, Ron Paul and probably Newt Gingrich, too. That the debates have evolved/degenerated into everyone beating up on Perry because he became the front-runner within a week of entering the race.

But something very interesting occurred on Sean Hannity's program last night.

Hannity often has pollster Frank Luntz air live focus group reactions to speeches or debates, then does Q&A with the group to ascertain their motivations and reasoning.

Last night, Luntz polled the group on their reaction to the Romney vs. Perry exchange concerning Social Security. Perry came out and bluntly called the program a Ponzi scheme. But, more tellingly, and a first, as far as I can tell, Perry described the program as, to paraphrase as closely as I can recall,

'An eighty-year old federal program that was badly designed.'

Now, Perry's allusion to SS becoming a state program makes no sense. It's not supposed to be a temporary social welfare service like unemployment or medicare. If you're going to have some national minimum pension assistance, it should be nationally-funded.

That said, Perry is the first candidate to my knowledge to begin to label it an old idea that should be scrapped because it was badly conceived and implemented. He said the purpose was necessary, but not this program.

Here's where it got interesting. Almost all of Luntz' focus group backed Perry and derided Romney as a phony. One guy actually aped Bill O'Reilly's body language lady, Tanya Reiman, noting how often Romney blinked, moves his hands on the podium and looked away when uttering Social Security-related platitudes which the audience said sounded like pandering to Democrats.

In general, they liked and applauded Perry's blunt and honest depiction of SS, while they loathed Romney's sucking up to Democrats and conventional wisdom, lying about the program's integrity.

Maybe there's hope yet for a total restructuring of SS from a general defined-benefit scheme with no limits, to an individual, account-based defined contribution program with payments from the federal government based on a one-year lagged fixed percentage of Treasury receipts. No COLAs or anything like that. The recipients share economic pain or rewards along with employed Americans who fund the program.

I know I'd never be elected on my views. Because, if it were up to me, the transition would be sudden and abrupt. Basically, anyone now drawing SS payments could continue on the program they entered. Everyone else, no matter how close they are to collecting payments, would be put into the new fixed-percentage, defined contribution account scheme.

Period.

The entire program was never a solvent concept. Time to just scrap it quickly and totally.

The Tea Party's Next Challenge

Yuval Levin and Peter Wehner wrote a useful editorial in Friday's edition of the Wall Street Journal entitled The Tea Party's Achilles' Heel.

They argue, correctly, I believe, that the Tea Party movement will have shown itself to be a one-hit wonder if its constituents don't follow their focus on current federal spending with equally serious attention to reforming and reducing the immense promised, but unaffordable social program benefits in Social Security, Medicare and Medicaid.

The authors note how quickly Michele Bachmann backpedaled on Paul Ryan's sensible budget which included entitlement reforms. That her fellow GOP presidential candidates have also remained largely silent on details of entitlement cuts.

Theirs is, I believe, the only really insightful critique of the Tea Party movement which I've read. Ironically, it comes from the right, not the left, and suggests that movement might not go far enough, instead of branding it a domestically-based group of fiscal terrorists, as the administration and some Democratic Congress members have done.

The Public Safety Net In A Small Society

One of the apparent longstanding immutable truths of federal government spending is that Social Security benefits can't be touched. No matter what happens to the working populace of the US, retirees are to be unaffected by any economic difficulties.

I wrote about how foolish this seems in a recent post. Building on the theme of that post, I wondered how social security would look in a community of, say, 10,000 people?

Suppose we imagine a typical Eastern US small town or village. The sort that is often found, cheek-by-jowl, among other similarly-sized small communities with a town council and various public services, e.g., schools, trash collection, police and fire protection.

If such a town were an entity unto itself, would it design, or be able to afford, a scheme like our Social Security system?

When you can see and name the recipients of a community's welfare payments, I suspect you, as a taxpayer and worker, get a lot more sensitive to sharing the pain of economic dislocations. You become more interested in fairness, as I noted in the prior linked post.

For example, suppose the town endures a crop failure, or the departure of a major employer? Or flooding which requires substantial infrastructure repairs?

These things would affect the total income of the town and, thus, its ability to meet transfer payment commitments to its older citizens.

Wouldn't such a small community be far more likely to pay its retirees a flexible, variable stipend that was a fixed percentage of the town's annual budget? And wouldn't that budget be a function of the community's ability to pay, in the absence of external funding?

I think it would. I don't think, in such a small community, anyone would expect to escape commonly-felt economic pain, especially if they didn't work, and everyone knew they survived on the taxes of their fellow citizens.

Just because Social Security is scaled up across the country, thanks to an historic mistake in 1935, doesn't mean its principles should be different than they would, were it designed as a community-based transfer payment system to provide a safety net to the aged.

About That "Fairness" Thing

Liberals, especially Wonderboy, make much of "fairness." To hear them, it's not fair if one person in America is poorly-off while anyone else is wealthy from the sweat of their own brow.

But let's consider another type of fairness for a moment.

What about fixed-, defined-benefit social transfer payment programs? How are they fair?

Sure, most well-intended Americans want to help the less well-off. But  consider what has happened since our idiotic Congress, in 1932 or thereabouts, enacted Social Security.

Between that program, and its descendants, Medicare and Medicaid, the US Congress bestowed upon society fixed-promise payment schemes, regardless of the means of the country to afford them.

Yet, ironically, even paradoxically, those working Americans who pay taxes to fund these programs are exposed to all sorts of income risks. Being America, few of us are guaranteed jobs, or lush unemployment benefits if we lose a job.

So we have the bizarre situation, which, in my opinion, only Congresses full of mediocre civil servants who couldn't make a living the honest way- working in the private sector- have designed welfare programs which require fixed payouts from taxpayers who assume all the risk.

Any sensible person would have designed the three programs differently. Ideally, they'd have been individual-account, defined contribution schemes from the start. Further, and this is the really important part which I've never seen elsewhere, annual payout levels would be contingent upon the relative health of the US economy, in real terms.

By this I mean some benchmark year, with a benchmark GDP/person, GDP growth rate, and price level, would be used from which to calculate a standard real dollar benefit/person for each program. Thereafter, the effects of the three measures would attenuate how much money each payee received each year.

This way, we wouldn't have the current fiasco, whereby the country's infrastructure and defense spending, to name two important governmental tasks, are subject to cuts due to budget deficits, but social welfare spending is seen as fixed, sacrosanct, and on auto-pilot.

Why shouldn't the country's poor bear as much burden as the taxpayers funding their generous stipends via Social Security, Medicare and Medicaid?

It seems only right that all society's members bear the pain of recessions and inflation. That nothing in the federal budget is fixed and off-limits during periods of financial pain.

Doesn't that seem truly fair?