The Social Security Ground War

THE SOCIAL SECURITY GROUND WAR….A couple of thoughts on both the reality and the perception of Social Security.

Today, both Garance Franke-Ruta (here) and Ezra Klein (here) suggest that a campaign to convince people that Social Security is not in crisis is bound to fail. Their argument is that politicians of all stripes have been telling us for decades that Social Security is doomed, and that message is now so deeply entrenched in popular culture that it’s just not reasonable to think that we can change public opinion on this in the space of the next few months.

This point is well taken. I’ve got a couple of responses.

First, there’s the factual response, which Brad DeLong puts well:

Fifteen years ago I would have said that we had a (long-run) Social Security crisis, and ten years ago I said that we had a (long-run) Social Security crisis: we were still in the age of diminished expectations ? the age of the productivity slowdown ? in which productivity growth was slow and there was no certainty that it would accelerate.

But between ten and five years ago there came the new economy boom, and the accompanying acceleration of productivity growth. Five years ago I said that there was a Medicare crisis but no Social Security crisis: the projected surplus in the general fund was enough to more than cover the Social Security (although not the Medicare) deficit. Today I would say that we have a Bush-caused general fund crisis, and a Medicare crisis. But Social Security crisis? That has melted away.

This is exactly right. Even as recently as five years ago, Bill Clinton was arguably correct to make Social Security a major issue in his 1998 State of the Union address. It’s true that the date of insolvency was still more than 30 years off, but it’s also true that the date had stayed steady for the previous five years. It was reasonable to suppose that we were getting closer to insolvency every year.

But it no longer is. Since that speech, the date of insolvency has moved out 13 years, and it’s almost a certainty that it’s going to continue moving out as long as we avoid a major, long-lasting recession. In other words, something that seemed like a reasonable concern in 1998 no longer is. It’s a problem that’s at least 40 years away and quite possibly more than a century away.

However, as both Garance and Ezra point out, factual arguments will only get you so far. For the broad public you also need emotional and political arguments. Is it possible to make them?

I think it is. Although the first step is to convince opinion makers that the facts have changed in the past decade, the second step is to construct a more, um, practical campaign. It would include arguments like this:

  1. Politicians lie all the time, and now they’re lying about Social Security being in trouble. What is it they’re really after?

  2. Wall Street tycoons are being cagey about this, but the truth is that they can’t wait to get their hands on your retirement money. Management fees is what this is really all about, isn’t it?

  3. Today your retirement benefits are guaranteed. With private accounts you’re taking on a big risk. What happens if you turn 65 right after a stock market crash?

  4. Take a look at Chile. Take a look at Argentina. They tried private accounts and look how their retirees are doing.

You get the idea. Facts and figures work on some people, but populist arguments are how you win the ground war. The question is, who’s going to take on the job of getting down and dirty with this stuff?