The Masters of the Universe Are Coming for Your Money

One of the panels I attended at Netroots Nation was a panel on the future of Social Security. Social Security will turn 75 in August and despite its success it’s under constant threat – now more than ever. The panel discussed that despite the successful efforts to stop privatization in 2005, Social Security is in more danger than it’s ever been. There has been a 75-year campaign to convince people that Social Security is in trouble and that it’s going bankrupt.

This campaign has been very successful. It’s almost an article of faith among people my age and younger that Social Security won’t be around for them. I think most of us on the left realize that Social Security is not really in trouble. It can pay its obligation for the next 30 years, and 75% of its full obligations after that (with the most pessimistic assumptions). Small tweaks like lifting the cap on wages would make Social Security solvent for many years to come.

Social Security is a very successful program and is supported by more than 80% of Americans (more than 75% of teabaggers). The panel emphasized that the danger most lies with people who will claim to “save” Social Security by cutting your benefits. There’s already talk of raising the retirement age to 70 and to do means testing for benefits. Both of these ideas are benefits cuts and should be resisted by Democrats. Social Security can be strengthened without these measures.

Where does this danger come from? Part of it is ideological. Some ideologies oppose any forms of social insurance. If you look at the federal budget, a large percentage of revenue comes from the wage tax. But this money is earmarked for Social Security benefits. So the wealth redistributors (ones who redistribute the wealth from the poor & middle class to the rich) see this giant pool of money that they can’t touch. And they want to. As if on cue, enter Neel Kashkari, Treasury official under Bush and TARP administrator.

The fiscal crisis in Europe has awoken Americans to the enormous challenge we face from entitlements. The promises our country has made over the past few decades, combined with changing demographics and rising costs, have put us on a path to national insolvency. Unless we control our deficits we will face stifled economic growth and impaired standards of living, perhaps even as soon as a few years from now. Most economists agree that raising taxes cannot pay for these commitments; entitlements must be cut. Before we can embrace any reform proposals, however, we must understand the influence our culture has on our decision making.

Our belief in free markets is founded on the idea that each individual acting in his or her self-interest will lead to a superior outcome for the whole. The financial crisis has reminded us that free markets are not perfect — but they do allocate capital better than any other system we know. A “me first” mentality usually makes markets more efficient.

But this “me first” mentality can also lead to shortsighted political decision making. Most Americans agree that we need more energy from clean sources, such as wind power — until someone proposes installing a transmission line near their homes. Most people are against earmarks — unless it is their representative scoring money for their district.

Cutting entitlement spending requires us to think beyond what is in our own immediate self-interest. But it also runs against our sense of fairness: We have, after all, paid for entitlements for earlier generations. Is it now fair to cut my benefits? No, it isn’t. But if we don’t focus on our collective good, all of us will suffer.

Could he make it any clearer? You need to sacrifice so that the rich stay rich because that’s just how it is (in Kashkari’s mind) One of the biggest failures of TARP is that the bankers were not punished for causing the crisis like they should have been. They intend to keep doing what they’re doing until we’re all bankrupt.