Like many people I like Jonathan Chait's article on social security.

Much of it will be familiar to readers of bloggers like Atrios and Josh Marshall.

I think I disagree with Chait on what the Democrats should do, although he doesn't make his views totally clear. He says they must not compromise. I agree. He writes "The key point Democrats should understand is that, while it may be tactically useful to favor an alternative to privatization, no decent alternative is going to be signed into law under this president." and I certainly agree, except for the word "may". However he also writes

Also, acting now to "save" Social Security would consume scarce resources that may be needed to solve larger problems. Some moderates have suggested cutting a Social Security deal that includes a tax hike. But balancing the general operating budget and saving Medicare and Medicaid will probably require tax hikes, too. These twin problems--the deficit and health care--dwarf Social Security's future insolvency. Pouring resources into saving Social Security now is like driving a fire truck past the blazing inferno to fireproof the house across town.

Chait presents this as an argument against cutting a social security deal (and I agree with him that this would be a mistake) but his subsequent argument would also apply under the highly counterfactual hypothesis that Jonathan Chait could write the bill to save social security. I would jump at a chance to save social security by eliminating the $90,000 cap and making no other changes. If valid Chait's argument would imply that this is a bad idea because it would "consume scarce resources". This is just silly. an increase in social security taxes consumes no resources. Paying social security benefits consumes resources (we both advocate exactly no change).

It has been, to put it mildly, thoroughly demonstrated that the social security surplus can be used to finance the general fund deficit. Money put in the trust fund can be spent on medicaid, medicare, or the general budget. the economic costs of the deficit are the effect of the unified deficit. The only difference between money earmarked for social security and general revenues is the ghost of the lock box which is feeble but, if anything, pushes in the deficit hawkish direction.

I repeat one more time for my few but patient readers that I think the democrats should advocate a reform which consists entirely of elimination the ceiling on the payroll tax.

I was actually less impressed than Matthew Yglesias with the evidence that self proclaimed social security reformers wrote fairly recently that their aim was to eliminate social security. The case was much clearer that the advocates of invading Iraq had been determined to get Saddam Hussein long before 9/11. I think that even Bush is a bit cautious about the third rail and did not appoint Cato privatizers to top positions. Chait . Like Yglesias, I think the problem with journalists on this issue is the general problem pointed out by Chait in this great article where he politely hints that reporters are ignorant because they don't value looking things up in the public record. If it is in Lexis-Nexis it is not news and so even reporters don't know it. Reviewing, I find that this was not the post in which someone pointed out that you can find peoples hidden agenda out in the open in things they wrote back when they were at the AEI or the Cato institute, so I have to quote Yglesias "You just need to go back and look at who's getting appointed to what jobs and what those people used to write and say before they were in government."

In the case of personal accounts however, Chait didn't nail appointees. He quotes Peter Farrara, Ferrara and Michael Tanner, and a 1983 paper in the Cato Journal none of them are Bush political appointees. The last, by the way, is a new one quoting anonymous sources is standard, citing an article but not naming the author is rare. I'm sure Chait is right. Personal accounts make no sense unless one wishes to undermine social security, but there is much less evidence hidden in plain view than in the case of Iraq.

Bush himself did slip recently as noted by Chait, (but only on further cuts in defined benefits not on making contributions voluntary). Here I think Bush can count on journalists misunderestimating him and assuming he was just babbling.

I think I disagree with Chait on what the Democrats should do, although he doesn't make his views totally clear. He says they must not compromise. I agree. He writes "The key point Democrats should understand is that, while it may be tactically useful to favor an alternative to privatization, no decent alternative is going to be signed into law under this president." and I certainly agree, except for the word "may". However he also writes

Also, acting now to "save" Social Security would consume scarce resources that may be needed to solve larger problems. Some moderates have suggested cutting a Social Security deal that includes a tax hike. But balancing the general operating budget and saving Medicare and Medicaid will probably require tax hikes, too. These twin problems--the deficit and health care--dwarf Social Security's future insolvency. Pouring resources into saving Social Security now is like driving a fire truck past the blazing inferno to fireproof the house across town.

Chait presents this as an argument against cutting a social security deal (and I agree with him that this would be a mistake) but his subsequent argument would also apply under the highly counterfactual hypothesis that Jonathan Chait could write the bill to save social security. I would jump at a chance to save social security by eliminating the $90,000 cap and making no other changes. If valid Chait's argument would imply that this is a bad idea because it would "consume scarce resources". This is just silly. an increase in social security taxes consumes no resources. Paying social security benefits consumes resources (we both advocate exactly no change).

It has been, to put it mildly, thoroughly demonstrated that the social security surplus can be used to finance the general fund deficit. Money put in the trust fund can be spent on medicaid, medicare, or the general budget. the economic costs of the deficit are the effect of the unified deficit. The only difference between money earmarked for social security and general revenues is the ghost of the lock box which is feeble but, if anything, pushes in the direction Chait and I like by making the target unified surplus larger.