Still confused about Social Security

August 20, 2007

Following up on this morning’s item, Noam Scheiber notes this amusing exchange between Karl Rove and Fox News’ Chris Wallace.

WALLACE: But, Mr. Rove, there was tremendous opposition from your own party on immigration reform and, frankly, not much support on Social Security reform.

ROVE: Well, look. On Social Security it’s a tough issue. This president campaigned, talked about it in 2000, talked about it in 2004. But it’s a difficult issue. I understand that. But again, inexplicable opposition from Democrats — Senator Moynihan, for example, came up with a wonderful idea, called, after the author of it, the Posen plan, which basically that said we’re going to have a progressive benefit and we’re going to take the promise that Social Security has made that it can’t fulfill, but we’ll keep it to the bottom third by giving them the full benefit. (emphasis added)

This is entertaining for a variety of reasons, so let’s unpack this a bit.

First, notice how Rove seemed to claim a mandate to privatize Social Security based on the fact that Bush “talked about it” during his two campaigns. In other words, as Rove sees it, Bush mentioned privatization, people voted for him, therefore the nation endorsed privatization. The talking point was a White House favorite for a while, despite being demonstrably false.

Second, the fact that Rove considers Democratic opposition to gutting a popular, successful Social Security system “inexplicable” is hilarious. All Bush tried to do was eliminate a bedrock Democratic issue with a reckless plan that the nation hated and couldn’t afford. And yet, it’s “inexplicable” that Dems would oppose it. They’re obviously history’s greatest monsters.

Scheiber summarizes all of this nicely.

To make such a statement you have to overlook the fact that: 1.) The previous few times a handful of Democrats collaborated with the White House they were either used as cover to pass a pretty radical piece of legislation (see the original tax cut bill in 2001) or were given assurances that never materialized (see No Child Left Behind). 2.) Rove et al had a policy of attacking Democrats for opposing legislation even when they supported it or were willing to work out a compromise, meaning there was zero political incentive to cooperate (see the Department of Homeland Security legislation in 2002). 3.) Democrats view Social Security as the crowning achievement of the modern welfare state and Rove was known to argue that the way to knee-cap the party was to eviscerate the program.

I’m sure I’m missing several things here, but you get the idea. That Rove would continue to call Democratic opposition here “inexplicable” is a pretty useful insight into his mental state.

Indeed, it does. The White House political operation has been run for nearly seven years by an odd nut.

The problem with Privatization is the “Last Fool” rule. If you invest in things purely on the speculation that someone else will buy them from you for more, you are vunerable to being the “Last Fool” and being left holding the bag and losing all (or most) of your money.

Being born in 1960, and thus at the tail end of the Baby Boom, I am extremely aware of the fact that there would be no more people behind me to buy my investments for more than I spent when it was time for me to retire, leaving me the “Last Fool”.

Thank you no Boy George II.

  • Dear Karl:
    It is said that the victors write the history books.
    You and your friends are losers.
    Give up.

    I swear this clown is just creating sound bites so BushBrat’s biographer will have some sources he can cite. This year Rove sez the Dems killed a great idea that everyone loved, in a couple of years the writer will repeat this in his pean to Bush, the 28 percenters will buy two copies and cite it as proof that the Dems ruined everything.

    That way when Babs or Jenna run for office…

  • I’ve wondered if Bush’s SS scheme didn’t help crystallize the public’s perception that he’s stupid. He went after a popular program that actually works, full bore and guns ablaze. And he continued to do so months after it was obvious he wasn’t going to get anywhere. There’s a certain point where repeating a mistake crosses the line into sheer idiocy. Obviously his Iraq adventure also qualifies, but SS was probably first across the idiocy line.

  • Where the hell does Scheiber get the idea that…”…Democrats view Social Security as the crowning achievement of the modern welfare state…” Social security has nothing to do with a “welfare state” nor do democrats view it as such. It’s insurance we paid for and it’s insulting to those of us receiving SS to be referred to as somehow “welfare” recipients.

    Bush has already spent the SS money to help pay for his dirty little war profiteering war. Looked for you would find it missing. It should be replaced by Haliburton, KBR and Exxon/Mobile.
    Listening to Rove makes me realize that the bulk of his time in the WH was spent doing nothing but figuring new ways to smear Democrats and consolidate power. Real investigations would quickly show that the present day cover ups are covering up for a lot of incompetence as well as corruption. Keep Rove talking as much as possible and you’ll see what a little man he really is when it comes to WH policy. It was always over his head.

  • “Being born in 1960, and thus at the tail end of the Baby Boom, I am extremely aware of the fact that there would be no more people behind me to buy my investments for more than I spent when it was time for me to retire, leaving me the “Last Fool”. ”

    Lance, you are mistaken. Perhaps you should look beyond the US markets when you look at that list of buyers behind you. There is a whole world out there of new consumers, savers, and investors (i.e., buyers) which can drive the markets higher over the long run.

    As for Social Security, I do give Bush some credit for addressing a politically toxic, yet very relevant issue. For Social Security to continue as we know it, one 3 things have to happen: (1) Proceeds must increase in the form of higher taxes; (2) Benefits must be reduced; or (3) The portfolio returns have to increase. With his privatization idea, Bush focused on trying to increase returns via private investments in the stock market – which in fact is a tool virtually every 401k , pension fund and defined benefit plan utilizes.

    I

  • “…the promise that Social Security has made that it can’t fulfill…”

    They did keep one promise; they promised to take a cut out of every paycheck I ever earned and they’ve kept that promise for forty-four years so far.

    Absent from the discussion of fixes for SS is removing the income cap. Doing so would go a long way toward insuring the solvency of the system. However, doing so would also be characterized as unfair to the same hardy rich who are now clamoring for a government bailout to save them from their mortgage-based pyramid scheme.

    If the Lord takes care of the poor then it’s only right that the government takes care of the wealthy.

  • I have to disagree with JRS Jr in no uncertain terms. That’s the repub line. The only real problem with Social Security is that both parties have been raiding it’s surpluses for years as a source of general revenue. Fixing Social Security’s solvency is as simple as not borrowing from it, and repaying what has been borrowed from it.

  • It was Adolph Hitler who believed and acted on the premise that if you say anything long enough (true or false), people will believe it. The bushies have been doing it for years.

  • The White House political operation has been run for nearly seven years by an odd nut.

    No.

    They’ve been run for the past seven years by a would-be fascist revolutionary. You may be able to take the boy out of the whore when he’s born, but you can’t take the whore out of the boy.

  • The part I never understood is why Bush kept telling everyone that at date X the program would be bankrupt. It is incredibly obvious that at date X we would have to reduce benefits or raise taxes. The whole point of the trust fund was to make sure we never reached date X.

    We all know that the Bush administration (and to some smaller extent other administrations) have been borrowing from the trust fund and putting treasury securities in to cover the loan. Well the loan will come due at date X and date X is coming in 2015 – 2017. So expect taxes to go up then and expect Republicans to tell you it’s the Dems fault.

    The part of all this SS thing that bothers me is Bush was borrowing the money and telling people that the treasury secuties were worthless. If he had done that before the 2004 election, the president would be named Kerry.

    Oh by the way, the president telling the world that U treasuies were worthless is also a high crime.

  • Yes, madstork123 is right. The day Bush opened the safe in West Virginia and said, “See, there’s no $$” was the day he reached the fullest depth of cynicism–and that’s saying something for a cynical man like him and his all-time cynical administration. The Social Security system is fine, and the plundering done to it is debt owed to the American people. Saying it can’t be paid is the same as saying to China, Japan and other international investors that the U.S. can’t pay its debts. The American people have paid part of every paycheck in good faith and even agreed to pay more in 1983 to enable us to get over the baby boom increase. The system is fine. Medicare, on the other hand….

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