New heights of hubris

January 23, 1999

Less than 24 hours after delivering his State of the Union message, the president revealed a bit more than he may have intended about his attitude toward Social Security, the surplus, taxes and individual rights and responsibilities. Here are some observations on Mr. Clinton's remarks from Cato Institute president Ed Crane:

"President Clinton reached new heights of hubris on Wednesday in Buffalo, New York, when he admonished the crowd on why the federal government would keep and spend the surplus: 'We could give it all back to you and hope you spend it right. But...if you don't spend it right, here's what's going to happen.' He then went on to misstate the nature of the Social Security trust fund. The point, however, is that this patronizing statement is a perfect symbol for the Clinton administration's view that the government is better able to make decisions about individual Americans' lives than those individuals themselves. Indeed, two years ago in a speech at American University, Vice President Gore specifically stated that the government's relationship to the average citizen is analogous to that of a grandparent to a grandchild. Hillary Clinton's famous admonition that 'it takes a village' is simply her way of saying that children are ultimately the responsibility of government.

"America is supposed to be the land of the free, not a land in which politicians pat us on the head and say they can't give you back the money you have earned because you might not 'spend it right.' It's ironic that this appalling statement came in reference to the Social Security crisis. It is, after all, the government that has been deciding how to spend payroll taxes over these past 60 years and therefore the government that has mismanaged the system so badly that it now has a $10 trillion unfunded liability. If the individual Americans of whom the president is so contemptuous had been given the right to invest their payroll taxes over the past 60 years instead of leaving the decision-making power in the hands of politicians like Clinton, there would be no retirement crisis in America today.

"Further, one does not 'save' Social Security by using yet more tax dollars to provide benefits that have already been promised, particularly when those benefits already amount to a minuscule and sometimes negative rate of return for Americans under 50. Using more tax dollars to provide the same pitiful benefits only further lowers that rate of return.

"The president hasn't addressed the fundamental problem with the pay-as-you-go Social Security system. The fact is that Americans have no right to the money they pay into Social Security today. It is controlled by the government and under the 1960 Supreme Court ruling of Nestor v. Fleming, Congress can reduce benefits or increase taxes at its whim. Having the government invest a portion of these taxes in the stock market not only is a dangerous opportunity for state meddling in the economy, it doesn't change the fundamental fact that the government controls this retirement system and the people are utterly dependent on the politicians. We need to shift to individually capitalized retirement accounts that are controlled by the American people, invested in real assets and out of the reach of grasping, irresponsible politicians like Bill Clinton.

"Americans from all walks of life should condemn President Clinton's patronizing politics of let-them-eat-cake. 'We could give it all back to you and hope you spend it right,' should be the epitaph for the Clinton administration."

Women and Social Security -- tomorrow's ADSS teleconference

Tomorrow (Jan 23), the group called Americans Discuss Social Security (ADSS) will host a teleconference featuring Hillary Clinton on women and Social Security. Since there's at least the possibility that the full privatization option might not get much attention in the teleconference, or if is discussed, that a serious advocate of such an approach won't be included, we'd be more than happy to help fill in the gaps.

Cato Institute policy analyst Darcy Olsen has researched and written at length on the unfairness of the current system to women, and the benefits of private retirement accounts. Here's a sample of what she's got to say on the subject:

"A system of personal retirement accounts, where these payroll taxes are saved and invested for the future, can ensure that every woman has a secure retirement-whether she is a full- or part-time worker, single or married, low- or middle-income. Such a system could be supplemented with a safety net funded from general revenue that could be set at or above the federal poverty line."

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