Tuesday, December 23, 2008

Saving Social Security Is Easy -- My Cousins Can Do It

Ramesh Ponnuru compares Social Security to a Ponzi scheme, saying
Participation may be mandatory, meanwhile, but having children isn't--and Social Security is actually worse than the typical Ponzi scheme in that its structure discourages the generation of new participants; studies suggest that the crushing tax burden it puts on workers suppresses the number of children they have.
If you're worried about Social Security running short on new participants, there's an easy fix -- import some from other countries! There are tons of bright young people around the world who would be overjoyed to come here in their twenties and pay into Social Security for forty years, keeping the system afloat. We can choose among the best and brightest as we please -- in addition to paying Social Security taxes, we can get doctors to cure our sick, computer programmers to keep our machines going, and scientists (like my father, who was born on a tiny Indian village and came here in the 1970s) to do all the things scientists do.

(If you're okay with saving the system in an entirely illegitimate way, illegal immigrants are even better. Since payroll taxes are deducted from their wages but they have no way of claiming benefits, they're basically free money for the Social Security system. Their presence in the country is worth a 30 basis point increase in the payroll tax rate, or $13 billion per year. Of course, this is wildly regressive since they're some of the poorest people in the country.)

6 comments:

Anonymous said...

"studies suggest that the crushing tax burden it puts on workers suppresses the number of children they have"

Demonstrating causality based on the 'crushing tax burden' of ss seems like quite a stretch. However, if it prevents glibertarians from having more children I'm all for it.

matt w said...

Ponnuru is of course being misleading the poor suckers in the "Right Matters" group. What makes a Ponzi scheme a Ponzi scheme is the fact that there isn't enough money to pay back the investors. So "Social Security is building up resources" is a pretty decisive difference. And when he says it won't be building up reserves for long, it can stay solvent longer than you can.

In short, to Ponnuru: Yes, dumbass a Ponzi scheme isn't a Ponzi scheme if it works. If it keeps paying out, what's the problem?

palintr: A magical crystal ball made by the elves of Valonr.

Anonymous said...

And "the crushing tax burden" wouldn't be as much of an issue if conservatives like Ponnuru weren't so allergic to raising taxes to improve Social Security's long-term viability.

Justin said...

I feel like I'm Will Wilkinson here, but the illegal immigrant point only feels like preying on the poor if you leave out the huge welfare benefits from coming here, especially so far as an illegal immigrant can send remittances home.

John Rove said...

Why does anyone listen to ponnuru?

Chuck said...

Someday you will have to explain to me why you even listen to these guys -- Christ, Ponnuru makes Douhat look like a man of wisdom and substance in comparison. Does Ponnuru have children? Has he ever been married? Has he ever gotten laid?

I can pretty much assure him that the burdens of FICA are seldom discussed when people contemplate having children. I've probably paid more FICA tax in my working life than everyone at the Corner put together and it really wasn't a factor in the to spawn or not to spawn debate.