Green Room

Thou Shalt Not Steal…Unless You Have To

posted at 12:43 pm on May 25, 2012 by

Public policy question of the next decade: Is it okay to steal?

Follow-up question: Would it be okay to steal a significant amount of money from a generation of people, or a smaller amount from multiple generations, to avoid a national fiscal collapse?

Final follow-up questions: Are these questions academic due to simple mathematical reality?

As 2012 wears on and Congress worries about November, the mathematics of these questions as they relate to our national debt are increasingly hard to ignore. Unfortunately, as I described earlier today at Right Wing News, the politically possible solution to fixing the major drivers of our debt – Social Security and Medicare – consist of one word: stealing. In fact, they consist of lots of stealing from one or more generations of Americans.

Last July, Congressional Budget Office (CBO) Director Doug Elmendorf explained things well in a post on the CBO blog:

Thus…limiting federal spending to 18 percent of GDP would require a cut in spending relative to CBO’s baseline projections for 2021 of roughly one-quarter…[I]f Social Security and the major health programs faced no cuts, then defense and other non-interest spending would need to be cut by about 60 percent. Alternatively, if defense and other non-interest spending faced no cuts, then outlays for Social Security and the major health programs would need to be cut by about 40 percent…

The budgetary imbalance could also be addressed by boosting revenues above historical levels relative to GDP—but it would take a substantial increase to bring revenues in line with projected spending under current law. For example, under current law, the expiration of the tax cuts enacted since 2001, the growing reach of the alternative minimum tax, the tax provisions of the recent health care legislation, and the way in which the tax system interacts with economic growth would result in revenues in 2021 reaching about 21 percent of GDP—about one-sixth above their historical average. But even then…debt would be rising slowly relative to GDP. Thus, with older Americans receiving the benefits projected under current law, fiscal policy is not on a sustainable path even with: (a) tax revenues rising above their historical average share of GDP; and (b) the rest of the government apart from programs focused on older Americans playing a much smaller role relative to the size of the economy than during the past several decades.

In other words, Elmendorf is saying that in order to get our debt under control in the next decade we would have to significantly raise taxes or drastically cut federal spending. And yet even this wouldn’t be enough to keep our debt under wraps in the long run, as the budgetary impacts of Social Security, Medicare and interest payments would truly begin to take over the federal budget around that time. To quote Michael Linden of the liberal Center for American Progress last year:

It’s true in the long run…the major drivers of the federal deficit are an aging population, which means higher costs for Social Security, Medicare and Medicaid, and also rising health care costs generally…we are going to have to have some really serious conversations about how to get those things under control.

So what can be done? In short, we as a nation need to accept that stealing is going to dominate the major public policy debate of the next two decades: reforming entitlement spending so our nation does not fall off the proverbial fiscal cliff. Or in other words, to quote my friend William Beach of The Heritage Foundation, “You can’t balance the federal budget and stay inside today’s policy lines. Rethink the lines, however, and you’ll be amazed how quickly we could move toward fiscal sanity. It’s all a matter of those tricky lines.”

What is outside of those lines? Necessary reforms such as the following (note: these are opinions I hold, not necessarily those of Beach, whose quote I stole from his Facebook page):

  • Aggressively focus on eliminating fraud, waste, abuse and duplicity in the federal government. I believe up to twenty percent of the federal budget is likely lost every year to simple mismanagement of taxpayer dollars.
  • Rethinking how our military is run, both from a mission standpoint (get out of Iraq and Afghanistan as soon as possible, to start) and from a structural standpoint (starting with reforming the contracting system currently in place, especially non-compete contracts).
  • Eliminate a federal bureaucracy or three, starting with the Department of Education, the Transportation Security Administration, Head Start and DARE. All of these agencies cost the taxpayers tens of billions of dollars yet have not actually accomplished their respective goals.
  • Raise the Social Security and Medicare retirement ages to 69 or 70 by 2030 and begin means-testing the programs. Is this stealing from current seniors and those nearing retirement? Yes. Is this necessary, considering that Congress has not told the truth about the sustainability of the programs for decades, and the American people been willfully ignorant? Yes.

Personally, I would prefer to phase out both Social Security and Medicare over a 23-year or so period, with reforms slowly phased in so retirees are less dependent on them, but I recognize this is politically impossible unless the programs simply implode. Which they are on the path to doing.

  • Phase out all federal tax loopholes and either enact a low-rate flat income or – preferably – eliminate all federal income taxes and enact a national sales tax.
  • Phase out all federal subsidies.
  • Allow greater cultivation of our domestic energy resources and allow the construction of more nuclear power plants.

Politics is full of soft language that hides harsh truths, but given the fiscal reality America faces I think conservatives ought to stand up and say what’s really going on: the most important spending reforms of our generation are those needed to prevent the collapse of Social Security and Medicare, and the most politically plausible of those reforms consist of stealing from at least one generation of Americans. Politically harsh and risky? Yes. Necessary? Absolutely.

[This was originally posted at]

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Raising tax rates should not ever be part of the answer.
We have a SPENDING problem. Spending must be cut.
Beyond that, if anything – REDUCE tax rates to bring in more actual revenue. I know – the Dems can’t see that, but how about a simple analogy. When a business is not selling enough product, what do they typically do? Lower the price – put the product “on sale”. What typically happens then? They sell more product at a lower profit margin and revenue goes up. So lower the tax rates and what will happen? Companies stop moving jobs overseas; companies move to the US; more companies start up; more people get jobs; more people and companies pay more taxes (at the lower rates) – the government brings in more actual revenue.

If you want proof of what happens when you go the other way, just look at Illinois, California, New York, the UK, and many other shining examples of libtard economics in action.

dentarthurdent on May 25, 2012 at 1:39 PM

People who now expect to get money from Social Security have either been dishonest or sorely misguided. Either way, they have no right to claim more out of it than what they have put in. The government should end the program summarily, and simply pay back everything it took (possibly in land, or by selling off federal lands). In any case, people should admit, or be clearly told, that Social Security was a fraud, and that it is now over.

Steve Stoddard on May 25, 2012 at 5:42 PM

I like all of your bullet point suggestions, except the approach to Social Security and Medicare needs tweaking. The retirement ages need to be even higher, and this change should occur more quickly. And we need to end the payments to disability scammers immediately. And let’s educate people so that ending the program entirely isn’t some kind of third rail. A phase out/opt out for younger workers needs to become the vision for the future of the program.

And just how are tweaks and changes like this any more a theft than anything else the government does with our tax money? Yes, if we immediately implemented a means test for benefits and raised the retirement age on people retiring within the next five years, people immediately affected might like that term, but phase-ins reflecting the on-the-ground realities of boomerdom, longevity, and fiscal conditions are not theft. I wish you’d stop talking about stealing.

Steve Stoddard — I like ending it and cashing people out, too. And on your point about people taking out more than they put in, I know several folks that passed the break-even point two decades ago and have been wards of the state ever since. One older gentleman actually had a part-time consulting gig after he retired from work as an electrical engineer, but he quit working after the government said they were going to cut his social security payments. Since then he’s been reading the newspapers, or more recently, going online all day. Such a waste.

Armorica on May 25, 2012 at 7:12 PM

In a free market system, it would be a normal occurrence for people to invest money and be able to get out more than they put in. But that would be voluntary investment in a productive economy — not a Ponzi scheme.

Steve Stoddard on May 25, 2012 at 11:37 PM

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