Demagogue

But there are probably 85 reasons why it can’t work, even in theory. Anyway, it would never be enacted by any Congress I’m likely to see in my lifetime. And someone has probably already thought of this concept and published a learned economic study of it. But if all this hasn’t convinced you to pass on to the next post, here’s a humble suggestion to our Dear Leader:

I have been inspired by your concept of an Ownership Society, and the Social Security debate has given me an idea of how to get there. As you know, almost all adults are eligible (or their spouses are) for some kind of tax-deferred personal retirement account, either a 401(k), a 403(b), or an IRA. Those who are not taking advantage of these opportunities fall into two categories: people who choose not to use these vehicles; and people who cannot afford to (like that mom who's working three jobs whom you spoke to the other day).

So here’s the idea: the government can help poor people join the ownership society by funding their personal accounts. This wouldn’t be welfare or a cash handout. You wouldn’t be furthering a cycle of dependency or giving people money that they could use inappropriately or fritter away. The government would provide money only to special accounts from which it could be withdrawn only for an approved purpose. This might be retirement—along the lines of an IRA, people might be penalized or even prohibited from making withdrawals before age 59½ —or education—along the lines of so-called 529 accounts—or health care—like the medical IRAs that you favor as a solution to the health insurance crisis.

Considering that we can afford to invest trillions of dollars to divert Social Security taxes into personal accounts, the price tag for this reform should be quite manageable. Perhaps, for example, each person in the bottom quintile of annual income would get a $1000 deposit to his account annually, and each person in the next-lowest quintile would get $500. If the plan were restricted to adults, that would amount to roughly $45 billion annually in deposits, plus administrative costs. It could be less if you didn’t include people over 59½, who would already be withdrawing from the accounts and would be collecting Social Security as well. An especially family-friendly approach would include children; if you selected that option, it might be a good idea to allow kids to withdraw from the accounts to help pay for college. Of course, the cost of the program could be adjusted by raising or lowering the deposit amount and the eligibility requirements, and your number-crunchers and policy wonks would have to work out some tricky details about how to define who’s in the bottom quintile and how to avoid perverse incentives when people are right around the line between two quintiles. But that’s what you pay them for, isn’t it?

The bottom line is that you could do this for a lot less than what Social Security reform is going to cost, and it would have other advantages as well. By targeting the program toward people who cannot afford to save and invest and who at the moment tend not to own homes, stocks, or bonds, you get more “bang for the buck” in bringing people into the Ownership Society and inculcating good habits among the economically backward. You also avoid the “third rail” by not messing with Social Security, which is already looking like a political fight that you’re going to lose; and this program could be announced as a modification of your Social Security plan, so it wouldn’t look as if you were surrendering (even though you would no longer be cutting S.S. benefits or diverting S.S. taxes into personal accounts). It’s also a budget-friendly form of spending, as the dollars go right into savings and investment, under the direction of the private sector rather than government bureaucrats; this will help grow the economy and bring revenue back to the government (a lot of these accounts would probably end up holding T-bond funds, i.e., the recipients would basically lend the money right back to the government).

And, although I know that you don’t govern by opinion polls, a bold stroke like this would be great for your image. How could liberals and the media keep whining about “tax cuts for the rich” if you did something so beneficial to the not-rich? No one could accuse you of trying to dismantle Social Security, but you’d still get the personal accounts that you want. And your historical legacy would be guaranteed; you’d be the conservative counterpart to F.D.R., leading the nation through a war that our enemies inflicted on us while also establishing a domestic program that would become the backbone of an economically healthy country and a financially secure middle- and lower class.

Really, Mr. President, there’s no need to thank me. The look of gratitude in your eyes is enough.