DISQUS

Javier · 3 years ago

I still can’t figure out how a liberal could possibly prefer the status quo over a cushy retirement safety net plus mandatory accounts.

Hmm...one can favor making Social Security into more of a means-tested system and yet reasonably oppose personal retirement accounts. Why? Well, for the reasons Tyler Cowen outlines here. In fact, there may be good libertarianish reasons for doing so, as Cowen suggests.

asg · 3 years ago

Countdown to brain-dead "monkyboy" post starting now...

R.J. Lehmann · 3 years ago

Social Security is a modest enough benefit that I can't see the moral hazard problem as a significant one. Certainly not significant enough to warrant anything like mandatory retirement accounts, which could just as easily force too MUCH savings as guard against too little. And in any case, unless you propose to have the government also manage what retirees do with the distributions from these accounts, what significant protection would they really offer? You can lead a horse to a savings account, but you can't stop him from blowing it all on Viagra once he turns 65.

R.J. Lehmann · 3 years ago

Reading your post a bit more closely, you seem to be making your argument based not primarily on how benefits are currently allocated, but on the prediction that the large mass of future retirees would vote for politicians who would increase their benefits. This is certainly a threat, but I still don't see how mandatory retirement accounts would help avert it. And in any case, it makes the first part of the policy prescription entirely moot. A voting public bent on increasing benefits to the elderly would, of course, begin by undoing any legislation passed in recent years that had limited those benefits, starting with progressive indexing.

dammit · 3 years ago

As far as I can tell, there is little to no evidence that converting social security to a means-tested benefits program would reduce political support for it.

I think that this theory relies on the single, albeit significant, case of welfare reform. Basically, federal welfare reform didn't just shift letters around when it turned AFDC into TANF, it really transformed the program's (dis)incentive structure. Conservatives (and centrists) think that this was a huge victory for responsible government; liberals are still smarting and grumbling over this one since they believe that you can't count the success of a program on the basis of how many people were eliminated from the rolls. (Indeed, for some of them it may not be a stretch to say that the more people a program serves, the better it is.)

Liberals have adopted a sort of dumbed down public choice. They believe that in order for a program to survive it either has to be (a) for the rich or (b) for the many. They think that the current version of SS is (ab) and so see means-testing as a poison pill.