Social Security and the Draft

In my most recent post I discussed the idea of raising or eliminating the cap on social security payroll taxes, arguing that the tax was regressive and that if the wealthy and influential were paying the tax on all of their income they would be more likely to support privatization as a matter of self interest. This line of thought generated some criticism both in the comments section and at the Mises Economics Blog.

On the Mises discussion Jeffery Tucker quotes my claim that changing the cap might prove beneficial and then replies, “Well, that is a reversal of the usual claim that at least privatization makes the program slightly better; here we see the claim that, yes, funding privatization does make the system worse but it thereby increases the likelihood that the program will be overthrown. This type of strategizing can yield some rather perverse results, with libertarians arguing for every manner of statism in the eventual hope that it will provoke revolt.”

The main issue that I have with the above paragraph is the idea that I am strategizing. I do not want to raise or eliminate the social security tax cap, I want to abolish the entire program. The government has no right to force people to save for their retirement no matter what form that coercion takes. However, what I want to happen and what is going to happen are two vastly different things. Just because I want American troops to stop dying in support of George Bush’s unrealistic vision for a better world, the war on people who use certain kinds of drugs to end , and the next Libertarian presidential candidate to be extensively interviewed on television the week before the election does not mean those things are going to happen.

Since politics trumps morality on almost all occasions the social security program is not going away. So, the next best option is privatization and not the wimpy 2% here 3% there tweaking that Bush is proposing but something akin to what they have in Chile. This type of privatization would not just make the program slightly better it would change its fundamental character in that the money people put towards their retirement would actually be saved and not immediately spent by the government. Under such a system the issue of a cap would be largely irrelevant. But that type of privatization is not going to occur anytime soon either.

The most likely prospect is incremental discreet changes, most of them probably bad. One of these changes may be the raising or elimination of payroll cap tax and I am merely pointing out that if this were to occur it would most certainly wear away support for the system as a whole among those paying more. I did not advocate the drug czar running ads linking marijuana smoking to terrorism, the cutting off of student loans for drug violations, or the countless other examples of over the top propaganda and more brutal enforcement. Yet, each of these acts has in their own way eroded support for the current drug policies.

Also, there is an issue of fairness here. Remember, as Milton Friedman has pointed out, because none of the funds have actually been saved there is no authentic connection between the tax and the benefits programs. So, if there is to be a payroll tax whose only real purpose is to fund government in general why should someone who earns $30,000 have to pay a tax on their entire earnings while someone who makes $1,000,000 pays a tax on only a miniscule portion of those earnings?

In the comments section of the original post John T. Kennedy likens my notion that changing the social security payroll tax cap might not be all bad to Congressman Rangel’s support for a draft as a way to change the direction of our foreign policy. I replied with this question , “If we had a fair conscription and the sons and daughters of congressmen and their contributors were being sent to Iraq do you think they would be applauding Bush's foreign policy so loudly?” Kennedy then asked me, “Fair to whom? Conscripts? You're willing to enslave men and women to (you hope) rein in policy?”

The answer to these questions is no. No conscription can ever be fair to the conscripts. I am unalterably opposed to the draft. Again though, what I want does not seem to matter very much to those who our running the state and they seem to be pursuing a plan that will make conscription necessary. Therefore if there is to be a draft it would be better if it were fair. What I mean by fair is that everyone of draft age has an equal chance of being called. Someone who is studying political science at a university has no more moral claim on their life, hopes, and aspirations than someone who is working as a baker’s helper. This type of draft will not last as long as one with college deferments and other ways to buy your way out of it.

Charles Johnson’s comment pointed out that “There is no example in American history of any war that was prevented or shortened by a draft. Every single draft has prepared for or prolonged a war which could not be pursued by voluntary enlistment.” But no draft in American history has ever been fair in the sense that I mean. The saying in Civil War times was rich man’s war, poor man’s fight and that model did not change in the Vietnam era until after we were already withdrawing. Johnson also maintains that if the rich and influential are forced to serve they would be able to secure the safe positions but in a situation like Iraq there are no safe jobs.