Mitch Daniels’s news flash

by Russ Roberts on January 25, 2012

in Budget Issues, Debt and Deficits, Politics

There was actually a news-worthy moment in Mitch Daniels response to President Obama’s State of the Union address. He said:

Decades ago, for instance, we could afford to send millionaires pension checks and pay medical bills for even the wealthiest among us.  Now, we can’t, so the dollars we have should be devoted to those who need them most.

The mortal enemies of Social Security and Medicare are those who, in contempt of the plain arithmetic, continue to mislead Americans that we should change nothing.  Listening to them much longer will mean that these proud programs implode, and take the American economy with them.  It will mean that coming generations are denied the jobs they need in their youth and the protection they deserve in their later years.

I would prefer to slowly dismember Social Security and Medicare and instead let us re-learn how to take care of ourselves and our neighbors without going through Washington. But if the goal is to save the system in some form akin to its current state, making the welfare component of Social Security and Medicare is a good place to start. Why should your children be taxed to pay for my retirement when I am capable of taking care of myself? The usual answer is that I paid into the system and I deserve “my” benefits. But I also paid into Food Stamps. I don’t expect my food stamp tax payments to come back. The government has deceived the American people for years, making them think that their payroll tax “contributions” are set aside for  their future benefit. But it’s not true. So let’s just admit it’s a welfare program. And if it’s a welfare program, why do rich people get benefits? Means-testing Social Security and Medicare would allow much lower tax rates in the future and be a more honest way to structure government-financed retirement and health plans.

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