Friday, November 20, 2009

The Wrong Side of History

New York Times opinion editorial "The Wrong Side of History" (November 18th, 2009) submits social security as a successful reform that paves the way for programs like public health care:

Indeed, these same arguments we hear today against health reform were used even earlier, to attack President Franklin Roosevelt’s call for Social Security. It was denounced as a socialist program that would compete with private insurers and add to Americans’ tax burden so as to kill jobs.


In hindsight, it seems a bit ridiculous, doesn’t it? Social Security passed, and the republic survived.

Yet we can say that Social Security is an inefficient savings mechanism that made the old better off at the cost of at least one future generation. Furthermore, it remains unclear whether or not social security will indeed survive the next eighty years of negative population growth, as a pyramid-shaped payment scheme requires more dollars from fewer individuals. The full story of social security will be told in the next eighty years. We might additionally correct the article, noting that private savings in America fell when social security was imposed--savings is a form of private insurance, and social security, an inefficient savings mechanism, has surely competed with it.

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