Liberty vs. equality

THE CURRENT SOCIAL SECURITY DEBATE is fixated upon numbers: When will the system go bankrupt? Should the cap on taxable wages be raised? Should benefits be indexed to protect low-income workers? What will be the rate of return on private accounts? Since most of these figures are based on projections decades into the future, no one can speak with any certainty about them, no matter how insistent his or her tone.

We do know this: Sometime in the next 10-15 years, payroll taxes no longer will cover the cost of current benefits and the government will have to divert general revenue funds into the Social Security system. Up to that point, the government will have been using payroll taxes to buttress the general revenue funds. Then, in 2018, perhaps 2019 (pick your date), one or some combination of the following will occur: severe reductions in other government programs, larger deficits, higher taxes, later retirement ages, lower benefits. The longer these choices are postponed, the more expensive they become.

Will private savings accounts be in that mix? The debate on this point primarily is philosophical. The resistance to private accounts has become a key ingredient of the Democratic Party mantra. Liberal Democrats (this term has become a redundancy) claim that Social Security is a collective good, part of the fabric that binds the generations. Private savings accounts as a part of Social Security would rent this fabric and tear at society's cohesiveness. If one were to take this argument seriously, private accounts would steer us on the path to unrestraint, individualism, and private selfishness. The same objection applies to health savings accounts and school vouchers. They would lead America away from the friendly village where Hillary Clinton would like to see our children raised.

The Social Security program, as established in 1935, was designed to protect the elderly from abject poverty and financed on the first couple thousand dollars of income at a low percentage. Since then, it has become a massive transfer program with a heavy payroll tax on workers and employers (12.4%) and a generous supplement to upper income retirees. How can anyone argue that a program that places a heavy burden on young working people to pay the affluent elderly a generous retirement benefit is essential to maintaining the social fabric?

Apparently, many liberals do. They claim government programs that transfer wealth from one group to another are the glue of a democratic society. Let's be clear: Programs that provide the poor with essential assistance are a legitimate function of a democratic society. However, lavishing entitlements on an affluent middle class, with a prescription drug benefit being the most recent, only binds people to the state, sapping their independence. Alexis de Tocqueville observes in his 1835 classic, Democracy in America, that democracy is much more than a set of governmental arrangements. It is, above all things, a culture. A stable and successful democracy requires the qualities of self-reliance and responsibility in its people, which must be cultivated and developed. Without those qualities, Tocqueville feared that people in their thirst for equality would grant greater and greater power to the central state. He called it a democratic despotism that would be subtle and mild, caring for people's needs and regulating their affairs."[Democratic despotism] does not tyrannize, it hinders, compromises, enervates, extinguishes, and finally reduces each nation to being nothing more than a herd of timid and industrious animals of which the government is the shepherd."

The debate over Social Security is not about numbers and solvency. It is about what makes a democratic community. Post-New Deal liberals believe that a democratic society needs an activist state to maintain the cohesion of a complex society. Many conservatives, sharing Tocqueville's fear, see an ever-intrusive state, sapping the vitals of a selfgoverning people. Government programs that either help people to become self-sufficient or assist those who never can be, such as the severely disabled or the impoverished elderly, can, in fact, strengthen self-government. Programs that create dependency weaken people's incentive to take care of themselves and their families.

This is not unbridled individualism. A prosperous society should develop programs that permit the able-bodied to climb out of poverty. Such programs should be structured not only to allow people to reach the middle class, but to grant them the independence to stay there on their own. Vouchers for education, housing, and health would empower the recipients and allow them the chance to improve their lives. A system of private retirement accounts gives people the opportunity to control a large part of their financial destiny. Properly structured, as are the retirement programs for Federal government workers, they reduce the reckless use of one's savings and grant retirees a decent standard of living.