FRONT PAGE CONTRIBUTOR
Mitt Romney’s Political Platform is a Ponzi Scheme
Mitt Romney might feel that entitlement reform is an electoral loser, but it is precisely his unprincipled Mittness Protection Program of a political platform that will lose him the nomination. Republicans are looking for a leader – and leaders show courage by articulating bold solutions to our most consequential public policy problems, such as retirement security; not by ducking behind them and palavering liberal demagoguery.
You see, Romney’s political platform, much like Social Security, is a Ponzi scheme. His convictions, like the Social Security Trust Fund, are vapid of substance. He supplies his current political platform with capricious policy stances that serve to sustain perceived political benefits in the future. In that sense, his is the ultimate career politician, albeit an unsuccessful one.
He thinks that by offering 160 pages of tepid fluff, with a one-sentence oblique reference to Social Security insolvency, he will be served well in the general election. He is also wagering that spewing Mediscare-style demagoguery will carry him through the primary. Well, it didn’t work for his father against Barry Goldwater in 1964; it certainly won’t work in the era of the Tea Party and a mature, well-oiled conservative base.
Republican voters are looking for somebody who will lead public opinion, by turning the tables on Obama’s Mediscare tactics. Our nominee must complete his sentences and explain why the fact that SS is a Ponzi scheme – is reason enough to engender full-scale reform. He must show how Obama’s status quo will lead to draconian cuts, higher taxes, and delayed retirement, while his (or her) plan will preserve and expand retirement security through the empowerment of the individual, instead of government schemers.
Being a leader (not from behind) will require the nominee to make the following points:
- SSDI and rapid insolvency: Social Security includes Disability Income (SSDI), in addition to Old Age and Survivors Income (OASI). SSDI eats up about 18% of total SS payments (about $134 billion annually), and unlike Supplemental Security Income (SSI), which is overseen by the SSA –but funded with general revenue – it is funded through payroll taxes. SSDI is projected to be depleted in 2017. That means that everyone – disabled or not – will be facing steeper taxes or benefit cuts, even though OASI is projected to be solvent until 2036 (yeah right). Oh, and Obama’s proposed payroll tax cut will hasten the date of insolvency. (Parenthetically, Obama’s payroll tax stimulus is a good segue for the presidential candidates to assail the insolvency of Social Security.) Only real private retirement accounts will securely protect younger workers from future cuts.
- Taxing Benefits: At present, Social Security benefits, the funds that everyone paid for with sweat and toil, are taxed. Moreover, the government punishes productivity by taxing the “benefits” of retirees who earn other income, interest, and dividends on a graduated scale. There are so many people who decline to work more after retirement for fear of losing benefits. Only real private retirement accounts will be completely tax free upon distribution after reaching the retirement age. Furthermore, they won’t incentivize people not to work and help contribute to the economy.
- Rate of Return: Even if we spike our debt by another 21 trillion, and provide full Social Security benefits indefinitely, the rate of return is still lousy. 1%-2% is unacceptable. The Galveston Plan has netted a 7% average return (without investing in the stock market) and the Chilean Plan has netted a 9% average compound rate of return. Only secure private retirement accounts – unchecked by government bureaucrats – will offer American workers a reasonable rate of return on their investment.
- Inheritance: There are no property rights on Social Security benefits. Consequently, for the most part, the benefits are not passed down to the heirs, if the recipient dies after reaching retirement. This is especially egregious for blacks, who have a lower life expectancy. Only secure private retirement accounts will preserve our fundamental property rights over such a large sum of our earnings.
Only private accounts will preserve our dignity as an ownership society, instead of an entitlement society. Only secure private accounts will preclude permanent indebtedness and delayed retirement. Only private individual accounts will prevent $8 billion in retirement funds from being wasted on improper payments. Only private personal accounts will ensure that every American is not forced to beg the federal government for their monthly checks, forcing the perpetuation of the most cynical form of political demagoguery and entrenched dependency.
It’s Romney’s insidious demagoguery and flaccid spine on tough issues that will ensure our retirement security will not exist. It is his callous disregard and unprincipled political calculations that will ensure that ‘Social Security is abolished.’
Romney is mistaken to apply conventional wisdom and historical political analysis to the current political climate. Republican voters want somebody who will go on the offense and demand that Obama stop destroying Social Security. We want somebody who will properly articulate the aforementioned points, and formulate a prudent approach that expands and empowers retirement security. Primary voters are sick of the washed up, impotent Rockefeller Republicans, who seek power for power’s sake. They want someone with bold free market, liberty-promoting solutions, with the moxie to fight for them. We are now presented with yet another seminal moment, in which we must choose between sharply competing ideologies within our party, the same way we did in 1964 and 1980.
This is not to say that we should deviate from the primary focus of jobs, energy, balanced budget, and repeal of Obamacare. A good conservative can ‘walk and chew gum at the same time.’ And besides, free market Social Security reform will help job creation, spur investment, and help balance the budget. We cannot achieve a balanced budget without reforming the largest expenditure.
We are waiting for someone to step up to the plate. It might be Rick Perry, Michele Bachmann, Sarah Palin, or somebody else. It sure as hell won’t be Romney. To paraphrase Romney adviser Stuart Stevens, ‘he already lost.’ When you have no conservative ideas, your political platform will become as unsustainable as a Ponzi scheme.