The Electric Commentary

Friday, April 01, 2005

Paul Krugman Column Spiked by The New York Times!

We have obtained a copy of the column through a reliable source at the New York Times. You should definitely read the whole thing.

Social Security Solutions :
A Modest Proposal.


When I was forced to return early from my vacation by those who would privatize Social Security, I promised to provide a plan to save the system. It took me a bit longer than I would have hoped.

You see, I’ve argued from the beginning that Social Security is not actually in crisis, and that these actuarial doomsday assessments serve only to buoy the aims of conservatives who would see grandma and grandpa replacing the urinal cakes at the local Shakey’s Pizza well into their 90s. It is obvious to all but the densest supply side economist that this problem can only be solved by drastically higher taxes, or by cutting benefits to current and future generations, most likely via means testing, or raising the retirement age.

The first option is a strong possibility. Taxes have been at historic lows in the US for over 20 years now. A Social Security (and Medicare) tax increase would certainly be a noble endeavor, however a tax increase of the magnitude required may not be politically palatable (at least to those living in the non-reality based portion of the country). Still, Democrats and principled Republicans should push for some tax increase, even though the economic consequences would be dire. After all, if we create more “customers” for Social Security, it will become increasingly harder to scale back or “reform.”

Cutting benefits plays into the hands of the Bush Administration and their bid to create a class of elderly slaves to work the oil fields of Alaska. Social Security is perhaps the greatest development in the history of the US, and instituting any cut would only serve to leave the program vulnerable to future cuts. This is not a precedent worth setting. For Democrats and Liberals it should be a non-starter, as should any talk of private accounts.

Private accounts, in which workers would be able to set aside money in a 401K-like fund, and suffer a matching loss of future benefits, have been touted as a cure all by the administration. Unfortunately, most people simply can not handle the awesome responsibilities of money management. We are not all economics professors at Ivy League Schools, and assuming that the populace will invest responsibly is akin to assuming that a pig will save some of his slops for later. Keeping money safely in the hands of the government is the only way to ensure that it will not be spent before a person’s retirement.

So what are we to do? The problem, (which is still not a crisis), is largely due to the fact that the ratio of workers to retirees is shrinking. A healthy Social Security system takes money from current workers and gives it to the retired. To maintain it, we either need to increase the number of workers, or decrease the number of retirees. That being said, here is my 10-point plan.

1. Increase the worker base by taxing stay-at-home moms. Working moms are already contributing their fair share to the system, while at the same time paying for their children’s care by third parties. There is no reason why a stay-at-home mom should not be taxed the value of the day care services that she is providing to herself.

2. Tax sled dogs, Seeing Eye dogs, helper monkeys, and other functional animals, as if they were workers. This option has the added benefit of never having to pay anything out.

3. Sedan Chairs for those over 65 years of age. The government could institute a program of Sedan Chair transportation, instantly creating four workers for every elderly person in America

4. Soylent Green.

5. Tax library patrons on the amount they save by borrowing books. This will also boost book sales and create jobs, at a very small cost.

6. Institute an income tax on robots, mechanical devices, microwave ovens, etc., for the wages that would have been necessary if workers had performed these services.

7. Move the system towards self-sufficiency by instituting state-run Bingo games and slot machines, with proceeds going into the Social Security System. The government could easily provide this service, and it would save tens of millions of dollars in transaction fees.

8. Remove the change from all fountains.

9. Allow foreign workers to enter into the Social Security System. Many foreign workers don’t have a state run retirement plan that compares with ours. It would be a great humanitarian gesture, and at the same time increase the worker base by millions if not billions.

10. Finally, we should heavily tax private retirement accounts. After all, when we save Social Security you will no longer need them.

If we follow these 10 simple steps, we can prevent the Neoconservative cabal from shipping our elderly into a holding facility in the Yucca Mountains. Now, if you will excuse me, I must be getting back to my vacation.

I was sad that I was unable to put together our normal Friday feature of Krugman, Kling, and Krauthammer, and I am indebted to our anonymous informant for providing this.


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