Arnold Kling writes about an elementary fact that has been raised many times by others; that left-wing economists who believe in redistributive taxation ought to favor privatizing Social Security, because in the transition high income earners would mostly pay for it through the progressive income tax system. While keeping the current system will require raising regressive payroll taxes (and/or cutting benefits).
Kling believes conservatives and liberals are both confused about this. The FLUBA believes they are not in the least confused. That people who recognize the benefits of a retirement income derived through real economic investment are simply willing to accept the need to use progressive taxation to accomplish that. While those who deny simple economic reality to argue for the status quo, also know what they are doing; indulging their ideological bent for government programs (for emotional satisfaction).
Which means Kling's clever analogy is unfortunately untrue. But we can still get a good laugh out of it:
The debate over Social Security privatization is starting to remind me of my favorite Winnie-the-Pooh story, In Which Piglet Meets a Heffalump. At one point in the story, Pooh and Piglet are discussing the best bait to use in a trap for a Heffalump (author A. A. Milne's deliberate mispronunciation of elephant). Pooh, who likes honey, starts arguing for honey as bait.
Meanwhile Piglet, who likes acorns, starts arguing for acorns. Suddenly, each of them realizes that he is arguing against his own interest: if acorns are chosen for the trap, then Piglet will have to supply them; whereas if honey is chosen for the trap, then Pooh will have to supply it. So the argument ends, with Piglet giving in first.
....The climax of the Winnie-the-Pooh story finds Pooh at the bottom of the Heffalump trap with his head stuck inside a honey jar. He is furiously banging his head against the wall of the trap, trying to escape the jar. Somehow, that image seems to fit Paul Krugman in his opposition to Social Security reform.
Saturday, December 11, 2004
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