The Conservative Case for Expanding Social Security
As of 2035, there won’t be enough revenue to pay benefits so if Congress does nothing benefits will automatically drop to 80%.
Some conservatives welcome this, but here’s why we should want to continue to expand Social Security…
It’d avoid a blue tsunami.
Some conservatives say we should “protect” Social Security, but I think we should say that we want to “continue to expand” Social Security because since we’re living longer we’re deriving evermore benefit from the same amount we’ve paid into it
If the GOP doesn’t vote to continue to expand Social Security then we’ll lose BIG to the Democratic Party who will not only vote to do so, but vote to expand virtually everything else too.
A more philosophical reason I support expanding Social Security is because cash transfers are one of the least harmful forms of government spending.
They’re more problematic when we give them to the young or poor as it disincentivizes work, but when we give it to the old and disabled then there’s less of a distortionary effect on their behavior since they tend to be more stuck in their ways.
Libertarians argue against giving out “free” money, but unless you also support ending public education and public assistance then you’ve already abandoned the principle where as a matter of principle I think providing some aid at the beginning of life as well as at the end makes good economic and moral sense.
Another reason to expand Social Security is that seniors tend to be conservative Republicans. I don’t believe in buying votes, but it seems like an odd hill to die on trying to stop our political opponents from giving more money to just about the only conservative demographic they’re willing to do so for.
A fourth reason to give seniors some extra money is because they disproportionally spend it on healthcare, which not only aids them in living longer, therefore increasing their voting bloc, but if there is one sector of the economy for which government should artificially inflate spending beyond what the market might naturally finance then it is in my opinion healthcare.
Seniors also give more to family, charity, and church, which are three key demographics conservatives wish to empower as they inspire a more virtuous society.
My sixth reason for supporting the expansion of Social Security is because it doesn’t just benefit us when we’re old, but throughout our lives because of the sense of security it provides us in knowing that if things go south then at least we can still count on some money coming in as we’re approaching the end of the road.
This psychological benefit provides a large economic benefit too because just as children who come from more stable homes are more likely to be curious and take risks then the same can be said about adults like Colonel Sanders who knew that he could be a bit more entrepreneurial and creative with his savings given that he had Social Security to fall back on.
Now, there are some libertarians who’d like to “privatize” Social Security because they think forcing you to invest in Wall Street would increase US economic growth and give you a larger return, but there are several problems with this theory…
The first is that payroll taxes are already going toward existing seniors. Privatization would mean that we’d need to double taxation so Grandma can continue to get her $1 while a new $1 would go into your private account. Secondly, your account may theoretically net you a larger return in the long run, but I think direct transfers to Grandma instead of say Google provides society a much larger return.
Part of the stock market’s rate of return is also due to its inherent risk, inflation, and Wall Street’s regulatory protections and tax preferences, but libertarians correctly want to reduce these factors, which means Wall Street’s returns wouldn’t be as big since it wouldn’t be able to rent-seek as much off the backs of a working-class drowning in newly printed paper money.
My final problem with privatization is deciding what things the government should allow you to hold. If you believe in abolishing Social Security then say just that, but if you want to “privatize” it then that means the government would have to pick and choose what stocks and stockbrokers you’re allowed to invest in.
Libertarians of all people should see how this would increase cronyism as Wall Street would lobby DC to structure these “private” accounts in such a way that most tax dollars would go to the largest firms, therefore, leading to an even greater consolidation of the financial sector.
In the end, Social Security is simply meant to be a floor. One should still build on top of it by personally choosing to save and financially diversify.
The problem therefore isn’t Social Security, but that 1/3 of seniors depend on it as their sole source of income. So how about we not cut away the lifeboats so we can ostensibly redirect its cost to making the ship unsinkable?
Make the ship unsinkable first with the already unprecedented amount of resources at its disposal and then you can try to reassure seniors that the lifeboats are frivolous.
Now that we all agree we should continue to expand Social Security the question is… how?
Republicans want to make benefits progressive, i.e. the more you make the less you get.
Democrats want to make the payroll tax progressive, i.e. the more you make the more you pay.
Neither party is likely to agree with the other so they’ll likely do as they regularly do with the debt ceiling… vote to override the prospective drop in Social Security benefits to keep it at 100%.
This means the gap between payroll tax revenue and Social Security spending will continue to grow, but for one, deficit spending is less bad under our existing monetary system because since the Fed targets 2% inflation then the more money we print for seniors is the less money the Fed can print for the big banks.
Total government spending is about 45% of GDP with Social Security projected to be 7% of GDP so despite all the fear-mongering from the Left and Right we can close the federal deficit without having to cut Social Security nor raise taxes. We just need to cut virtually everything else.
And since the payroll tax is no longer able to meet its intended liabilities then we might as well abolish it so we can fund Social Security via our already progressive income tax.
In the end, let’s continue to expand Social Security in part to justify cutting virtually everything else and then with a more perfect ship of state we won’t need lifeboats because we’ll be over the fricken moon.