Monday, August 21, 2006

The grand bargain

Mickey Kaus responds to Josh Marshall who states that to “give up on Social Security…undermines progressive reform on every front.” Instead, Mickey believes as I do that unless we reform entitlements, they will crowd out all those “progressive” programs that people like Marshall hold dear:

It's just that a "universal" Social Security system costs hundreds of billions of dollars more than, say, a "means tested" system that doesn't send checks to the richest 25% of retirees. And I don't think Democrats will be able to afford both a) that expensive universal Social Security system and b) the national health care program they will rightly want. 'Defending' Social Security and achieving a decent health care system is less likely to 'galvanize and strengthen progressive reform as a whole' than it is to either bankrupt the government or require a larger tax burden than citizens are willing to bear.
Emphasis in original. Democrats have criticized means testing as a pathway to erode the political support of Social Security. That is, since everybody gets a check, everybody will (allegedly) support the program. But the bigger elephant in the room is the demographic imbalance that will force payroll taxes spiraling up to cover Social Security and Medicare expenses for an aging population. When that happens, not only can you kiss universal healthcare goodbye, you might as well say bon voyage to all discretionary spending.

1 comment:

yetanotherjohn said...

Check on what percentage of the population pays for the taxes before you think that a spiraling tax rate is sure fire death. By "progressively" moving the tax burden on a smaller and smaller portion of the nation, the demand by those who aren't paying for the entitlements to keep them will continue.

And if any republican thinks its a good idea to trade not paying social security to the top 25% who pay 83% of the income tax so that the democrats can lower out medical standards by imposing a universal health system, they need to understand the basics of economics and voter politics.