Michael Boskin, Conservative Economist and Giant Brain

Today's Wall Street Journal features a column by Michael Boskin, conservative Stanford economist and senior fellow at the *(giant sucking sound)* Hoover Institution. Mr. Boskin has decided to throw his giant brain into the Social Security melee.

Nothing works like icons to stir the emotions! Boskin wouldn't be such a giant brain if he wasn't aware of the importance of atmosphere. Boskin equates President Bush's and Clinton's proposals (even though they had diametrically different approaches - Clinton is still alive, and I'm sure he wouldn't like getting dragged into the argument this way). Boskin quotes JFK. He has a nice picture of a thoughtful Daniel Patrick Moynihan. 'Where, oh where, is today's Patrick Moynihan?', Boskin wails. It's time to 'modernize' Social Security and every year we wait, the harder it gets. If we don't start now, when, oh when, will we get our private accounts? (Note to Boskin: why not a picture of FDR?)

Well, if Boskin really wants a private account, he could always open an IRA. Anyone can. We already have suitable 'add-on' accounts. But, I forget, this is all about 'carve-out', isn't it. It's about gutting Social Security and getting people to surrender their guaranteed benefits for a cheap whirl on the Wall Street merry-go-round.

Boskin idolizes the young. He states:

Many younger workers say they expect the system to be bankrupt and gone by the time they retire.

Boskin knows these young people are right. Young people are his god - he sees them every day at Stanford, and he knows how smart they are. But young people make mistakes. Many young people think they won't live to be 40, boring statistics to the contrary be damned. Why should these feckless young people be right on Social Security's prospects?

Boskin uses the straw man of reactionary Democrats who want to extend the current benefit formula indefinitely into the future. Most Democrats are willing to tinker with the formula if it helps long-term solvency, however. People like Boskin are not interested in long-term solvency, because they plan to destroy Social Security in the short-term. To Boskin, tinkering with formulas is like sweeping the floor of a cottage perched on top of Mt. St. Helens: boring and pointless.

Boskin likes everything and anything, except shoring up Social Security. Boskin likes Robert C. Pozen's ratchet idea. Boskin also likes borrowing. Boskin contrasts good borrowing (automatically equated to private sector needs) and bad borrowing (automatically equated to government needs, which he likens to a party), failing to notice that these distinctions are not borne out in practice - borrowing is borrowing, and can be good or bad, depending on context:

Many critics of individual accounts denounce the idea of borrowing to finance them. While I share concerns about large deficits in prosperous peacetime, there is a fundamental difference between borrowing to finance individual accounts and borrowing to fund government current consumption. The individual accounts acquire real assets. So, while there is borrowing by the government on the one hand, it finances investment in real assets on the other, like borrowing to buy a home, not to throw a party. Is there really such an aversion to private capital that only government spending counts?

No aversion to private capital, Mr. Big Brain, as long as the interest gets paid on all that borrowed money! Plus, a lot of government spending serves as an investment in society's future. Don't you just love all his evasions? Plus, Boskin is off-message: it's not prosperous peacetime, we are war with the terrorists! Aren't we?

One trouble with privatization is that the new system has to work on $1+ trillion of borrowed money in order to avoid cutting current benefits. That scale of borrowing might damage the economy, and the money has to be repaid - with interest. It's no panacea! In comparison, pay-as-you-go Social Security is cheap.

Boskin reverts to scare tactics: act now, or you get benefit cuts, tax increases, social dislocations, high interest rates, hives, herpes, locusts, pestilence, obesity, and gas. Sorry, Michael Medulla, none of this works for Americans. We are not scared of the future. We are an optimistic folk. Even if the baby boom generation retires, a few, hardy young people will be left behind in the ruins of our empty cities from which to repopulate the country again (maybe add a few hard-working immigrants as well).

Boskin refers to the Bush plan as if everyone knows what it is, but clever guy that Bush is, he has yet to reveal it, in the form of proposed legislation. It's like poker! Bush now wants Democrats to reveal their plan, but the Democratic plan has been in plain sight for decades: preserve Social Security much as it is. It's not like poker, it's more like a game of 'pull my finger.' Democrats should walk away from this game on the midway of democracy, and involve themselves elsewhere. Leave the sad freak from Texas alone with his finger outstretched.

Poor George Bush - he's misjudged this game's odds! Wasting away all that precious political capital from the 2004 election - for nothing! Like the blackjack dealers at Cache Creek Indian Bingo and Casino say about other dealers who play blackjack: "they work for free!"

Preserve Social Security, ever-so lofty and cerebral Michael Boskin, and everything else will fall into place. Social Security is not a bad program. Social insurance preserves social stability, and makes possible the crazy-ass markets that brains like you idolize so much. Turn your attention to health care costs instead, which are truly running wild, rather than Social Security, which is probably the best-run part of the entire Rube-Goldberg Republican-dominated federal government.