Monday, February 22, 2010

Lensing the Framing Part 2: a Draft for Angry Bear

The following is an uncompleted draft for a future Angry Bear piece. Any preliminary comments welcome.
Social Security 'crisis' divides itself into two large parts, each of which divides itself depending on it is viewed, kind of like the duck/rabbit gestalt.
The most common framing of Social Security 'crisis' is economic and traditionally focused on Trust Fund Depletion. Under current law the Treasury is mandated to pay full scheduled benefits for as long as combined income and assets allow which under current Intermediate Cost projections means until 2037 when all accumulated assets in the Trust Funds are exhausted and benefits have to be reset to the level supportable by then available revenue, or contrawise revenue increased in some manner so as to backfill the gap. This crisis revolves around issues of solvency and how to achieve it and the solutions depend on whether you define the problem as one of benefits or cost.

While I'll return to the benefit-cost distinction I want to insert the second framing of 'crisis' which is ideological. There are a couple of factions in this country who believe that the crisis presented by Social Security is that it exists at all. Some libertarians would follow Milton Friedman and label it 'immoral', others see it as simply socialism and so a big step down Hayek's Road to Serfdom. others (and these groups overlap) are fervent believers in Free Markets being everywhere and always more efficient and productive than any Statist solution. Their ideal solution would be to transition away from Social Security, as Michelle Bachmann would say to 'wean' workers away from their dependence on the State. Opposed to these factions are people committed to various forms of Social Democracy, which is to say social solutions to collective social problems.

So when we decide to enter into debate it is important to know where the opposition is coming from, that is the argument fundamentally one of financing and solvency? or one revolving around Free Markets vs Social Democracy? Failure to understand the distinction is some explanation of why discussion on this sometimes sales past each others ears, particularly when what is really an argument about the Free Market comes hidden in an argument about Solvency.

Because ideological opponents of Social Security are in a bind, history has shown that people like Social Security, so much so that it was long referred to as the Third Rail of American Politics, touch it and you die. Which in turn has led to various schemes to drain the juice out of the Third Rail, of which a prominent one, first put in print by Stuart Butler and Peter Germanis was dubbed by them the 'Leninist Strategy'. This strategy involves a certain 'more in sorrow than in anger' approach, the authors agree and understand why people like the program, they just insist that over the long run it is bound to collapse anyway through what they see as its internal contradictions. And this is key, they are not really interested in any kind of fix, and certainly not one that increases satisfaction with the system, for the ideological opponent of Social Security the worst possible news would be that new numbers, or for that matter existing numbers shows that Social Security will be perfectly fine for a generation or even too, or that properly framed Social Security is not a crisis at all.

Over the last couple of years posters and commenters at Angry Bear have been advancing two lines of argument. One pushed largely by Coberly is that the cost of a fix on the revenue side is in real world context cheap and easy, and this argument is the basis for what we call the "NW Plan". Another argument suggests that the 'crisis' really isn't one at all, that under Intermediate Cost assumptions the end result would still be a better benefit in real terms than retirees get today (75% of 160% = 120%) and that economic results better than Intermediate Cost and so better ultimate benefits are possible and even likely, that in fact a plan of "Nothing" could potentially result in an overfunded system.

These two lines of argument, however numerically solidly backed up, are not in the end satisfactory to ideological opponents of Social Security, they literally don't want to hear them, or more precisely they don't want democratic majorities to hear them, because acceptance of them simply re-amps the deadly current in the Third Rail and so defeats the Leninist Strategy. The distinction between the two camps of opposition was aptly captured by Baker and Weisbrot in 1999's 'Phony Crisis' Exactly so. Which makes arguing for "Nothing" or the "NW Plan" useless if the goal is to change their minds, for them a successful social democratic program is essentially a contradiction in terms, a surrender to the socialistic enemy. Instead arguing for the NW Plan is simply an open attempt to thwart the Leninist Strategy to sap support and ultimately kill any movements to Social Democracy.