Monday, October 1, 2012

Paul Ryan's definition of socialism and collectivism

This is not my first blog post about Paul Ryan. Since he was first chosen as Mitt Romney's running mate early in August, I have devoted four posts to him, including "Something I didn't expect", where I tried to come to terms with what Mitt Romney thought he was doing by choosing this fraud as his pick for vice president; "Paul Ryan's false virtue", where I discussed a quote from John Maynard Keynes that I think summed up why Paul Ryan is seen as virtuous, despite his intentions to impose hardship on those with low incomes and the middle class to "cut the deficit" (and despite what the budget numbers actually show); "Paul Ryan's Social Security and Medicare plans", where I explain how Paul Ryan intends to savage Social Security and Medicare basically because he doesn't believe in them; and, finally, in "Stephen (please, no) Moore and Paul Ryan", I discuss Stephen Moore's awful profile in courage of Paul Ryan, where he tries to make Paul Ryan seem insightful (and fails). Coming across a post by Brad DeLong (and a repost by Mark Thoma) discussing Paul Ryan's condemnation of socialist and collectivist programs, like Social Security and Medicare just makes me want to do a little reprise of what Paul Ryan said his struggle between individualism and collectivism in the United States Congress.

In his speech before the Atlas Society in 2005, Paul Ryan said, "In almost every fight we are involved in here, on Capitol Hill, whether it’s an amendment vote that I’ll take later on this afternoon, or a big piece of policy we’re putting through our Ways and Means Committee, it is a fight that usually comes down to one conflict: individualism vs. collectivism." One of these "fights", according to Ryan, is the effort to privatize Social Security:

That is why there is no more fight that is more obvious than the differences of these two conflicts than Social Security. Social Security right now is a collectivist system. It is a welfare transfer system. It is a system where--and I always tell my constituents, and none of them usually believe me--you don't have an account with your name on it in the federal government. There isn't a box with your cash in it that is going to come to you when you retire. A lot of people think that. And what is important is that if we actually accomplish this goal [of Social Security privatization] of personalizing Social Security (extended laughter)--think of what we will accomplish. Every worker, every laborer in America will not only be a worker but a capitalist. They will be an owner. They will be an owner of society and a participant in our free-enterprise system, our capitalist system. I would like to have more people on our team who are owners and believers in the individualist capitalist system than on the other side.

One would think that Social Security could be largely seen as a social insurance program. People pay into it all their working lives and eventually receive its benefits when they retire, but Ryan just sees it as redistribution. Ryan is implicitly buying into a class-conscious argument when he says that privatizing Social Security will make each worker a capitalist. Then Paul Ryan explains that we are on Hayek's Road to Serfdom:

If we ran government on autopilot--CBO just came out with a really good report--and do nothing, Medicare, Medicaid, and Social Security will grow so fast and consume so much that the government will consume 26% of our national economy, 26% of our GDP. Historically, government in this country runs at about 18% of GDP. We will consume 26% of GDP if we do nothing. So you have to understand that all they have to do is to stop us from succeeding. Autopilot will get them to where they want to go. It will bring more government, more collectivism, more centralized government if we do not succeed in switching these programs and reforming these programs from what some people call a defined-benefit system to a defined-contribution system--and I am talking about health-care programs as well--from a third-party socialist-based system to an individually-prefunded individually-directed system. 

So just by not "reforming" Medicare, Medicaid and Social Security, we will be transformed into a socialist country? Let's just say that 26% is not a very big government compared to other advanced industrial economies. And his great plan is to turn these programs, which ensure that people receive a defined level of benefits into a "defined contribution" system, including health-care programs. Does he mean that the poor are going to pay their own way for Medicaid? We know what he means about Social Security because he sponsored the Social Security privatization effort. His plan for Medicare is to eliminate it and replace it with a program with the same name, which provides a medical insurance voucher, which covers only a fraction of the costs of "traditional" Medicare. His immediate plan for Medicaid is to "block grant" it to the states, which is a fancy way of saying he wants to cut it and make it inaccessible to more people.
I do not have an ideological opposition to Social Security, Medicare or Medicaid. There are elderly and/or disabled people who need the income support that Social Security provides and a payroll tax is not an awful way to pay for it. Medicare and Medicaid give access to the elderly and lower income groups. Presumably both Mitt Romney and Paul Ryan want to dismantle these programs. Right now, it looks like they are bound to lose. They ought to if they intend to make these unpopular and unnecessary changes to the American way of life.

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