Paul Krugman clarifies liberalism, for anyone still in the dark. Did you think it was the top 80% sacrificing a bit as a matter of compassion and solidarity in order to provide benefits to the bottom 20%? Think again - in Krugman's formulation it is (roughly) the bottom 80% exhorting/obliging the top 20% to sacrifice on behalf of "the common good".
His subject is Social Security and, as Dems have been doing for fifty years, Krugman has identified the latest Evil Republican scheme to eliminate Social Security. Now, George Bush is plotting to "reduce" benefits (i.e., slow the rate of increase) for the rich and middle class, while preserving them for the poor. Oh, that Evil Man!
It's an adage that programs for the poor always turn into poor programs. That is, once a program is defined as welfare, it becomes a target for budget cuts.
Oh, my. Once it loses it luster as a middle class entitlement, Social Security will lose public support and be ripe for the plucking. Who knew the middle class was so selfish and uncaring? And who knew that all those conservatives who define democracy as two foxes and a goose voting on the dinner menu were taken so seriously by Krugman and his ilk? (Among the ilk we find Matthew Yglesias, who endorses the notion that this program don't mean a thing if it ain't got that middle class swing).
In any case, Social Security looks like an earned benefit - did welfare as we knew it give that appearance? Was the 1996 Morris/Clinton/Gingrich welfare reform a mistake? Has welfare been eliminated? I'm surprised that its termination did not receive more attention.
Krugman's column also has a puzzling concept of progressivity:
I asked Jason Furman of the Center on Budget and Policy Priorities to calculate the benefit cuts under the Bush scheme as a percentage of pre-retirement income. That's a way to see who would really bear the burden of the proposed cuts. It turns out that the middle class would face severe cuts, but the wealthy would not.
The average worker - average pay now is $37,000 - retiring in 2075 would face a cut equal to 10 percent of pre-retirement income. Workers earning 60 percent more than average, the equivalent of $58,000 today, would see benefit cuts equal to almost 13 percent of their income before retirement.
But above that level, the cuts would become less and less significant. Workers earning three times the average wage would face cuts equal to only 9 percent of their income before retirement. Someone earning the equivalent of $1 million today would see benefit cuts equal to only 1 percent of pre-retirement income.
Well, yes - since the Social Security benefit is both capped and calculated to be progressive, it is hard to come up with a cut (or an increase) for a high-earner that will be significant on a percentage basis. Steve Verdon works through some numerical examples to compound Krugman's confusion.