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Romney’s “That’s a nutty idea, Pierre” moment

The Social Security exchange between Romney and Perry in the debate tonight crystallizes the fault line in the Republican party: the play-it-safe establishment versus the conservative populist tell-it-like-it-is wings.

It reminded me of when in a 1987 debate, George HW Bush decided to call Pete DuPont’s idea of social security choice “a nutty idea”. “That’s a nutty idea Pierre” George said of DuPont’s plan to allow young people to opt out of social security.
From Nov 1987 New York times:

In Houston, Mr. Bush branded as a ”nutty idea” and ”dumb” the proposal by the former Delaware Governor to create an option to the Social Security System. Mr. du Pont contends such an optional retirement system is needed to assure that Social Security remains solvent in the 21st century and to assure benefits to the ”baby boom” generation now in its 30?s and 40?s.

”It’s not nutty, it’s not dumb, George,” Mr. du Pont has been declaring in recent days. ”It’s a way that young people can save for the future, it’s a way that Social Security can be saved and it’s one of those ideas that someone running for President ought to be putting forth to meet a real concern around the kitchen table for millions of American families across the country.”

Boy, George sure put THAT nut in his place, eh! Only 20 years later, his own son, George W Bush, stumbled trying to sell a reform package not too different from Pete DuPont’s ‘nutty idea’. The idea remains stillborn.

Since the time of Eisenhower, the Republicans have fought a half-hearted battle to fix or change what is at heart an old fashioned, out-of-step Ponzi Scheme. Social Security ‘works’ because anyone locked into a lifetime of taxes will demand their money ‘back’. And then some, if Congress is in the mood.

Attempts to fix this system have foundered because of Democrats demagoging the issue, cowardly politicians (like GHWB and Romney) and a populace stuck in a system that is unchangeable due to the weight of its own inertia and its demographic and actuarial scheme. The very Ponzi-ness of the scheme makes it hard to reform.

Romney tonight called this system a success, not a failure. Politically it is very successful, but economically, Romney should know better.

Just think how better off we might be if 20 years ago Pierre’s “nutty idea” of fixing social security was tried. We might not be in the terrible mess we are.

Here is what the Trustees of Social Security and Medicare are saying in 2011:

“Social Security expenditures exceeded the program’s non-interest income in 2010 for the first time since 1983.

“The financial conditions of the Social Security and Medicare programs remain challenging. Projected long-run program costs for both Medicare and Social Security are not sustainable under currently scheduled financing, and will require legislative modifications if disruptive consequences for beneficiaries and taxpayers are to be avoided.

“The long-run financial challenges facing Social Security and Medicare should be addressed soon.”

http://www.ssa.gov/oact/trsum/index.html

So, alas, not just Pete DuPont, but Rick Perry is right. The status quo is not acceptable. The Ponzi Scheme is edging closer to the abyss. If we do not make changes, and make them soon, the system will collapse and the effects will be wrenching – huge tax increases, lower benefits or both. Or worse. Look at Greece for the limits of govt debt and public sector burdens.

Romney has done far worse than Bush did in 1988. Not only is he actively opposing what is in fact a correct characterization (“Ponzi Scheme”) he doubled-down by calling the system sound AND implying casting doubts on the system would make Perry unelectable.

Romney adviser Stuart Stevens exulted over what he called a politically suicidal moment by Perry, emailing to POLITICO:

“He has lost. No federal candidate has ever won on the Perry program to kill Social Security. Never has. Never will.”

Romney has sent a very BAD signal catering to the liberal media – he will NOT have the guts to take on real Social Security reform. He has undercut GOP reform attempts. He will use phony Democrat talking points (“kill Social Security”) to attack those who will. It’s a reminder of Romney’s ad against the flat tax in the mid 1990s.

The bottom line is this: We have been waiting for a ‘conservative’ moment, where we could actually fix the serious problems of the liberal welfare state. In 1988, we blew it when we elected a non-conservative who failed to advance any real conservative agenda items and even broke his promise not to raise taxes. He became a one-termer.

In 2012, we have a HUGE mountain to climb, to reverse the worse 4 years in American governance since … a long time. We need bold conservative leaders who are willing to be bold enough to say the politically incorrect things and propose serious conservative reforms that will truly make a difference. Romney’s “That’s a nutty idea Pierre” moment was an indication that, on entitlements at least, he’ll stick to the pale pastels instead of the bold conservative colors.

To Counter Romney’s advisor: Romney has lost. No federal candidate has ever won on the Romney program to be another George HW Bush.

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