Thursday, March 03, 2005

Devilry Social

We promised ages ago to give you our definitive take on social security, and could give you our potted take on how it is impossible to make scads of money by putting it in stocks or how there's a reason why so many banks are increasing the resources they put into money management (it's the fees, silly).

But one thing about the whole debate strikes as very weird, and we'll get to it in a round about way. Via the English experience. About the same time as the US, the UK introduced National Insurance, and you still pay a national insurance element in your paycheck. In fact, we still do. And there's still a vague correllation between putting money into the system and the amount of money you're able to claim, or more precisely the ability to claim some benefits. But there is very little talk of a trust fund, and little of the actuarial gloss that the performance attracts.

There are still a huge number of problems with the UK pension system, but National Insurance is no longer really considered a ringfenced, separate entity. It's considered a government obligation, and national insurance obligations as part of general taxation revenue, in practice, if not in principle. And the reason this is considered unremarkable is that the redistributive effects of National Insurance are well understood.

In the fight over social security, liberals have been very disciplined. They usually characterise the conservative case as an irrational hatred of the New Deal in all of its forms. The normally evil Chris Suellentrop hits upon a good point when he says that the basis of the liberal attachment to social security is that they like its redistributive effects. He's being grossly unfair by not pointing out that they might also have a visceral dislike of old people dying in poverty. And by not saying that the republicans' basic interest in private accounts is that it would be a slightly more regressive system that would allow high earners to keep more off their money.

All thefightingover the system seems to stem from an unwillingness to stick up for the idea of rich people giving up some of their income to make sure poor people don't become the victims of misfortune or fecklessless. Not sure why, because we're not hideously rich, but it seems that we had a go at ignoring vast disparities in wealth, and then stopped it when bloodshed or massive class upheaval threatened. Maybe better munitions technology makes this less likely, but we would rather not be around to find out.

Coming tomorrow: Syrians, can't you just, like stop fighting? Wouldn't that be awesome?


Post a Comment

<< Home