January 2005
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Month January 2005

Huygens successfully lands on Titan

Wow.

Pictures are starting to come back from the Cassini-Huygens probe, from the surface of Saturn’s moon Titan, after the probe successfully landed earlier today. Here’s one of the first series, a view of ice blocks strewn around on the surface.

It’s amazing to stop and remind ourselves, in the midst of our domestic squabbles and international wars, that there’s a lot more to discover out there.

Congratulations to the ESA/ESOC, NASA, and the entire Cassini-Huygens team!

What I don’t understand about Social Security…

…and it’s not the “trust fund,” the various depletion scenarios, or the options for ensuring long-term solvency. Sure, each of these is fairly complex, but they’re amenable to rational thought, data, and a bit of research. And the parts which seemed confusing are well explained by Paul Krugman (especially in his latest paper in The Economist’s Voice).

What I don’t understand about Social Security is how its opponents actually manage to convince themselves that the program isn’t hugely beneficial, and should be variously privatized, crippled, or even dismantled.

Sure, I understand the argument concerning savings disincentives; that the promise of a retirement annuity roughly indexed to inflation may contribute to low retirement investment and savings throughout one’s adult years. There’s definitely merit in the theoretical model, but I remain unconvinced that such a disincentive exists in real life. Why?

First, because at my current rate of contribution, my benefits at the full retirement age of 67 will be $2055 per month. Not bad, I suppose, but let’s just say that it’s enough to pay my mortgage and buy lunch for two. Not lunches, mind you, just a lunch. Clearly, the promise of Social Security benefits (assuming that the system is capable of paying me the current level of benefits when I retire) is enough to ensure that I won’t be homeless but not enough to ensure a stable food supply. Or, instead of retiring to enjoy the home I’ve worked hard to afford, I can sell it and move into a small apartment in order to retain the ability to live indoors and eat.

Hmm….choices….

So clearly, those who believe that Social Security is funding a lavish retirement without the need to continue personal investment (through massively popular 401K plans or private investment channels) either isn’t really going to need their benefit checks, or hasn’t done the math.

So let’s move on to the misguided notion that OASDI taxes (FICA for those reading the back of their pay stub) are really disincentives to work. Again, I understand the theoretical argument for how higher taxes disincent work and entrepreneurship, but I remain unconvinced that this effect is measurable among working class Americans. Why?

Because I’ve never met anyone who was going to need their Social Security check who could choose to work less, simply based on wanting to avoid paying a larger amount of tax. Increasingly, lower and middle-income Americans need to work as much as possible, regardless of the bite taxes take from their paycheck. Sure, we may bitch about the taxes that come out, but that’s not the same as truly being disincented to work. A theoretical disincentive simply can’t manifest itself for people to whom basic needs and health care form the scope of their economic lives.

But both of these “drawbacks” to Social Security annuities do apply to those who don’t really need the help with retirement — folks in the upper brackets of the income and wealth distribution. Tax levels become disincentives when your choices are relatively free and unconstrained, not when you’re living by paycheck and need the work. And not when rising health care costs, declining employment-linked benefits, rising housing costs, and rising educational costs — to cite a few examples — steadily erode one’s ability to save from one’s net income.

And this points out the essential hypocrisy of the current battle over “reforming” Social Security. The people who need the program most are those to whom its theoretical drawbacks are largely moot, and the benefits hugely outweigh any residual disincentives. The people who disapprove of the program because of its theoretical drawbacks typically are less in need of its benefits, or are economic ideologues.

Fortunately, however, the folks who are actively trying to undermine Social Security are screwing with a sleeping dragon. Social Security is, hands-down, one of the most popular social programs ever. And although the economic Right is trying some tricky rhetoric and judo moves to kill Social Security by reforming it to death, I’m willing to bet that ordinary Americans aren’t going to go gently into a poverty-stricken retirement, especially after contributing their taxes for forty hard-working years.