Elizabeth Anderson, of the University of Michigan and left2right, has heroically taken up the thankless task of very clearly illustrating the fact that mainstream contemporary academic American liberalism is, at its core, an essentially reactionary creed built around the conservation of the institutions of the “New Deal” and the “Great Society,” and the protection of the interests of the affiliated political rentier class. One would thus imagine that Anderson would at least understand the institutions she is trying to conserve against the forces of reform. But, no, not so much with the understanding.

Anderson argues that whatever the other faults of Social Security benefit calculators like Heritage’s, “It forgets that Social Security is a form of social insurance, not a simple retirement plan. So it’s comparing apples with oranges.”

Of course, readers of the Annals of Improbable Research understand that apples and oranges are eminently comparable. But more importantly, Social Security is emphatically not a form of social insurance — unless we arbitrarily stipulate that any redistributive transfer is ipso facto a form of insurance by providing people with resources that they could use to protect themselves from risk. Social Security is: a tax and a transfer. That’s it. It’s not insurance, not legally, not in structure, and not in fact.

The Roosevelt administration defended the constitutionality of the Social Security Act in part by arguing before the Supreme Court in Helvering v. Davis that it did not establish a social insurance program. The Court agreed, and reaffirmed this point 23 years late in Fleming v. Nestor where it determined that Social Security taxes are just taxes, and that individuals have no right to any benefit on the basis of having paid these taxes.

It is true that successive governments have maintained a deceptive program structure and system of admininstration intended to trick citizens into believing that there is a connection between their so-called “contributions” and their benefits, and that Social Security is a kind of insurance. Roosevelt fully intended for citizens to mistakenly believe that their payroll tax constituted a kind of insutance premium. He vehemently opposed paying benefits out of the general fund because that would impede the goal of deluding taxpayers. No one thinks they are entitled to some kind of cash transfer from the government simply because they have paid their taxes. And the SSA to this day continues to encourage the systematic deception of the citizens of the US.

You would imagine that a liberal would deplore a system of paternalistically motivated noble lies and would forcefully argue against this kind of deception as a transgression against democracy, which is what it is. We are angry when the government uses lies in order to circumvent the democratic process by causing citizens to misrepresent their options. Think of Bush and the WMD. We ought to be incensed when the government entrenches lies into the very structure of the welfare system.

Anderson has either been taken in by the lie, is trying to perpetuate it, or has a notion of insurance so broad that anything that cushions people against risk, such as exercising regularly, wearing a bicycle helmet, or cultivating a network of altruistic friends and family, counts as “insurance.” In any case, she ought to admit that Social Security is not an insurance program according to the law or according to ordinary usage, and she should stand up for transparency and democracy by condemning the purposefully deceptive structure and rhetoric of the American Social Security system.

What’s wrong with people owning things? Well, if people own things, then the government doesn’t really control it. Apparently it is worrying if the benevolent members of the political class don’t have the discretion to spend your money. I think it is impossible to defend on moral grounds that other things being equal, if the choice is between individual ownership and state control, we should choose state control.

One of the arguments in favor of individual ownership is that property rights create a shield against political predation. Yglesias, who seems to think that other things equal it’s better for the political class to control resources, blithely says, “Why worry!?“:

One [remark on the issue of the relative security provided by legally binding property rights versus the discretion of the politicians] is that while I’ve heard much touching concern from certain privatizers about this “Grace of Congress” issue, the more typical conservatarian complaint about Social Security is that due to the ever-growing voting power of senior citizens it is, in practice, nearly impossible to cut Social Security benefits. So the whole issue strikes me as being of academic concern only.

Matt is pulling a kind of probably unconscious bait and switch here. This is all too common among conservative opponents of progress on social security. Unless there is structural reform of the social security system, such as the implementation of personal retirement accounts, either there will be VERY LARGE future tax increases or VERY LARGE future benefit cuts. The problem with Big Senior’s hegemony and reactionary impulse is not that it makes benefits cuts permanently impossible by constituting an indefeasible coalition, it just pushes the decision into the future while the problem continues to mount. The further into the future we push the problem, the bigger the benefit cuts or tax increases will need to be.

Now, politicians are indeed averse to cutting benefits, due in part to the electoral muscle of Big Senior. Yet they are also averse to raising taxes, due to the electoral muscle of taxpayers. Unless we do something quite soon, the tax increases will need to be quite large. This may not be politically easy, and it is quite realistic to imagine that voters may prefer to cut benefits rather severely in order to avoid giant tax increases, at which point, politicians will cut benefits. Matt’s bait and switch consists in having us imagine that voter demand over policy-bundles remains constant despite the fact that the demographic unsustainability of the system will force tough trade-offs that will alter voter demand.

Matt’s argument is that senior citizens will never allow benefit cuts and so the “Grace of Congress” point is simply academic. Congress will always grace us, so why worry? Well, if Matt is right about the intrasigence of Big Senior, we’re going to need a giant payroll tax increase. Indeed, those who wish to stall serious structural reform are arguing for huge tax increases by default. But the real prospect of a huge tax increase is precisely the sort of thing that will shift voter demand so as to make benefits cuts politically feasible. And so by stalling, Matt is helping to bring into being the conditions under which the Grace of Congress argument gets real teeth.

Unless there is serious structural reform, reduced benefits become increasingly likely. That’s why it’s simply dishonest and incoherent to confuse a politician’s promise with a credible guarantee. There is no guarantee. There are no guaranteed benefits. There are promised benefits — promised by people who honor their promises when it benefits them. And, credibility of politicians aside, given the structure of the system, the promise cannot be kept.

The “conservatarian” argument is clearly not that Big Senior obstructionism regarding reform locks in a sure benefit level, but that it threatens benefits by making the problem ever more acute. At some point, the problem is so acute that the Big Senior coalition will not be political decisve regarding the issue of benefit levels. One main point of reform is to avoid the need to choose between tax increases and benefit cuts, and the political uncertainty the necessity of such choices would create.