Maya MacGuineas has been predicting budgetary and Social Security doom for ages. Of course she has. What does she have to lose?
If she’s right after having been wrong, she can claim that she was a seer all along. If MacGuineas remains wrong, she can simply go quiet. Since Washington, D.C. is dense with budgetary experts predicting the same as she, MacGuineas will hardly stand out.
In a recent piece for Barron’s, MacGuineas wrote as she always has about doom ahead: “Social Security Is Broken, Benefit Cuts for the Rich Are the Fix.” Except that if the capacity of the Social Security Administration to pay out benefits were at all threatened, this truth would be reflected in the electorate. In other words, those set to endure the cruel effects of a “broken” system would be up in arms, calling their congressmen, marching in Washington, and other forms of protest.
None of this is happening. And it’s not because wrongheaded as Social Security is (imagine the federal government creating a "retirement program" in a nation thick with wealth-enhancing retirement options), it’s not going bankrupt. And it will never go bankrupt.
Experts revel in telling us there’s no money in the proverbial Social Security “lockbox,” but the lack of money there is precisely why so few present and future Social Security recipients are worried in the way that MacGuineas and other budgetary experts claim to be. The lack of money in the lockbox is a simple reminder that Social Security was never a retirement program, but always just an extra tax on income. Which is the point.
Whereas in the past Congress spent any revenue overages enabled by the tax, in the future Congress will cover what the Social Security tax doesn’t cover. Again, the surest sign all Social Security beneficiaries will get what’s coming to them from this thoroughly ill-conceived retirement tax is precisely rooted in the fact that the lockbox never existed.
Since Social Security was and is just an income tax overlaid on existing federal income taxes, any shortfall will once again be covered. This notion of Social Security suddenly running out of money on the path to benefit cuts is the stuff of academics and experts who, as their endlessly incorrect predictions over the years have made plain, can apparently be wrong repeatedly without any consequences.
MacGuineas adds that to fix what isn’t “broken” in the first place, the easy answer is to cut benefits for the rich. Without getting into the thievery associated with such a scenario (the tax was levied with a lame income promise), it’s hard to figure what MacGuineas is thinking.
Assuming Social Security savings found by fleecing the rich, what happens if Congress suddenly has new dollars to spend based on the reform? Actually, we know what happens and it’s vivified by a non-existent lockbox. What Congress doesn’t spend on Social Security won’t disappear, rather it will find its way to new spending initiatives. No thanks.
Better to just let Social Security, Medicare and interest payments swallow ever more of the federal budget as a restraint against new ideas turning into new federal programs. Thought of another way, if MacGuineas is really interested in a “responsible budget,” then she should be cheering the growth of past budgetary mistakes like Social Security as a way to avoid much bigger budgetary mistakes in the future.
