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June 29, 2005

Cato Debunks Cuomo Article

From the Cato Institute: In an op-ed in Tuesday's USA Today, former New York Governor Mario Cuomo argues that the effort to introduce personal accounts into Social Security is merely one battle in a twenty-year class war waged by Republicans against the working poor.

"The battle continues today as Republican 'wealth warriors' press for the privatization of Social Security, revision of bankruptcy laws to benefit corporate financiers at the expense of debt-ridden middle-class credit card users, the repeal of workplace safety regulations, and in other ways are forcing struggling Americans to shoulder responsibilities that have been government responsibilities for most of our modern history."

But according to a new Social Security Paper by Cato scholar Will Wilkinson titled, "Noble Lies, Liberal Purposes, and Personal Retirement Accounts," Social Security does not meet the progressive ideals Gov. Cuomo and others would have us believe:

"Opponents of President Bush's proposal to make individually owned personal retirement accounts a part of the Social Security program routinely charge that it is motivated by ideological animosity toward the values Social Security is supposed to embody, such as equality and social cohesion. However, a frank look at the Social Security status quo reveals that the program is very poorly designed to realize liberal ideals. Social Security has a barely progressive overall structure, if it is progressive at all. The huge volume of transfers inherent in the system accomplishes very little income redistribution within generational cohorts. Furthermore, it works to the disadvantage of current workers, who will receive a smaller "return" on their payroll taxes than do current retirees. The terms of the imaginary "compact between the generations" are manifestly unfair. "What is worse is that the Social Security status quo embodies a government-perpetuated deception designed to generate its own political support by misleading voters into believing that their payroll taxes entitle them to later benefits. The architects of Social Security created a structure and accompanying rhetoric that were specifically intended to encourage the false belief that the system provides a kind of insurance, similar to private insurance based in contract and property, and therefore involves a binding entitlement to benefits."

You can read Wilkinson's entire paper here.

Posted by Andrew Roth at June 29, 2005 2:57 PM | Print

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