Bryan Caplan  

Rock on, Alex

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Education and the Economic Way... May Day Mourning...

Alex Tabarrok make a real splash on Lawrence Kudlow today. And while most of the talk centered on Social Security reform, there was an exhilirating digression on oil economics.


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COMMENTS (7 to date)
Steve Miller writes:

The oil digression was the best part.

Lawrance George Lux writes:

The trouble with the Bush Plan is that it is bowed (the middle class pays the freight, and gets screwed out of the Benefits) and it is too harsh. Private Accounts cannot improve the Solvency issue directly, and depends on Market instrument growth. Check my blog for further details. lgl

Randy writes:

Lawrance,

Most of the benefits of Social Security go to the middle class. Who else should pay?

I like the proposal. The current generation of retirees is left alone. The poorer baby boomers are left alone. The wealthier baby boomers get less than scheduled. But in return, their children get a stabilized system and hopefully private accounts. Certainly, there will be some in my generation who don't want to take the hit, but somebody has to, and we've known this was coming since 1983. I'm really interested in seeing the polls.

Ray writes:

Prof. Bainbridge quotes an excellent little exchange between Milton Friedman and Wilbur Cohen in the early 70’s.

"I am convinced that, in the United States, a program that deals only with the poor will end up being a poor program. . . . Ever since the Elizabethan Poor Law of 1601, programs only for the poor have been lousy, no good, poor programs. And a program that is only for the poor--one that has nothing in it for the middle income and the upper income--is, in the long run, a program the American public won't support."

President Bush’s latest twist on the Social Security reform is to implement means testing that would effectively cut the benefits, proportionately, for those in the middle and upper income levels. This is socialist redistribution, but hey, it’s a socialist program. Anyway, Bainbridge reminds us through this exchange that, of course, only the bottom tiers of our society are even considering their SSI as something to rely upon in their retirement. So to effectively remove the other economic tiers through means testing is to make SSI, all the more, “a poor program.”

Randy writes:

Ray,

I absolutely agree. But if the alternative is ever higher taxes, I'd rather see it devolve into a program for the poor.

David Thomson writes:

“This is socialist redistribution, but hey, it’s a socialist program.”

Exactly. The Bush administration is forced to deal with the realities of the present system. It has been placed in an awkward situation similar to a guy thrown out of a plane without a parachute. Social security is a welfare program. We only confuse ourselves by denying this patently obvious fact.

Ray writes:

Randy,

I concur; I want to see it a "poor program" so that we might see it die on the vine.

My favorite source quote on the history of SSI is Milton Friedman's "Free To Choose" appendix A. But unfortunately, the average American has come to think of SSI as some kind of "right."

So how to get rid of it? I think I like President Bush's idea. Leave it there for the truly poor and it'll make everybody happy. Eventually of course, the tax payers will say enough and the plan will be fully exposed for what it is. Then it dies.

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