Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Sunday, July 02, 2006

Social Security Confusion from the American Spectator

Why oh why can't' we have a better press corps?

Andrew Samwick tries to chivy the right-wing in a constructive direction:

Vox Baby: LMS for Conservatives: Writing in the American Spectator this week, David Hogberg asks some good questions about how conservatives should react to the LMS plan and Social Security reform more broadly:

Since the LMS plan is a sincere effort at compromise, and since much of the left would still oppose it were Congress to seriously consider it, it would be worthwhile for those of us on the political right to contemplate just how much we would be willing to give up to achieve reform. Of most concern would be the increase in the earnings cap, a tax increase that would fall hard on small businessmen and women, some of conservatives' biggest supporters. Could we, say, accept a plan with only an add-on personal account in exchange for only a minimal rise in the earnings cap and the rest funded via debt? Or should we demand a carve-out in exchange for any increase in taxes?

I think the answer to the last two questions should be affirmative.

I'm not sure Andrew is right. You see, I don't think David Hogberg understands enough to know what questions he is asking.

An increase in contributions coupled with diverting some of those contributions to private accounts is indeed "a carve-out... [plus] an increase in taxes." But the short way of describing "a carve-out... [plus] an increase in taxes'" is "an add-on." Hogberg's second question is essentially "should we accept an add-on?" The answer is yes.

Conversely, an unfunded add-on--a "personal account... funded via debt" that doesn't raise the resources devoted to funding the Social Security system--the short way to describe that is as a "carve-out." Hogberg's first question is "should we demand a carve-out?" The answer to that is no.

But should I be surprised that writers for the American Spectator are hopelessly confused, and call a carve-out an add-on and an add-on a carve-out? I think not.

Given how confused they are, why don't we good guys reframe the debate. An increase in contributions to the Social Security system is to require that current workers accept some of the responsibility for funding their own Social Security benefits, and not push it off onto future generations. Taking responsibility is supposed to be something that responsibility-loving Republicans favor, isn't it?

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