March 27, 2005

Social Security Basics

Neil Buchanan: March 27, 2005

When people learn that I am an economist, they are usually quick to confess that they know nothing about economics. Frequently, they apologize while telling me how much they hated their college econ class, or they confess that they majored in econ but can’t remember anything that they learned. Mostly, though, people seem keenly aware that they know nothing about economics, with some people feeling somewhat guilty about it while others simply find their lack of knowledge amusing.

People who learn that I specialize in government budgeting issues, though, offer a rather different reaction—especially if they find out that my scholarly interests include Social Security. In those instances, they are quick to tell me that they know exactly what is wrong with Social Security. Usually, this turns out to mean that they learned one clever insight about Social Security, and they have decided that that one piece of special knowledge is all they ever need to know. More often than not, that special piece of knowledge is that the Social Security Trust Fund “doesn’t have anything real in it.” This half-truth is the source of more nonsensical assertions about Social Security than many outright falsehoods. It is the best example I know of the old adage that a little bit of knowledge is a very dangerous thing—even for the few people who approach these subjects without the usual ideological agendas.

By way of comparison, some students arrive in college (or even law school) not having heard that the Gold Standard has been abandoned and that the U.S. dollar is no longer backed by any precious metal. Thus, the dollar isn’t backed by anything “real,” either. I’ve yet to see a student respond to this revelation, however, by tearing up her greenbacks. People know that even fiat currency—that is, currency backed by nothing more than a government’s full faith and credit—has value. Promises mean something, and the economy would stagger to a halt if we stopped believing in the value of dollars.

Social Security’s Trust Fund is also backed by the full faith and credit of the U.S. government. Ah, but I hear people say, the Trust Fund is just a bunch of accounting entries. The Trust Fund’s assets are Treasury bonds, the familiar IOU’s by which the federal government promises to repay its lenders. The partially-informed then argue that there is nothing backing those Treasury bonds in the Trust Fund, because the Treasury is going to have to borrow the money, anyway. If by “nothing” one means nothing more than the government’s commitment not to default on the most trusted financial instrument in human history, then it’s true: There’s “nothing” backing the Trust Fund’s assets.

Treasury bonds (and bills and notes) are a uniquely powerful promise. While politicians often lie, the U.S. government has always been committed to honoring its IOU’s. Default is unthinkable. And putting one’s trust in Treasury bonds is hardly a sign of financial naiveté: Financial managers (even those who cannot say the name Franklin Delano Roosevelt without spitting) and economics professors (even those with signed portraits of Milton Friedman on their desks) treat Treasury bonds as risk-free. Indeed, Treasuries are the definition of risk-free assets against which all other financial assets are compared. Treasury bonds are, if you will, the Gold Standard of financial securities.

This is why Professor Elizabeth Anderson’s post on this weblog last week (March 25) was so important. As she notes, the one thing that the United States government has always stood behind is its debt instruments. Politicians might lie about whether they had sex with “that woman,” or whether they will unite rather than divide, but there are some promises that we always stand behind. For any politician to suggest that we might someday choose to default on those obligations is the height of irresponsibility. When that politician is the President—and particularly a President whose fiscal policy depends completely on the ability to borrow trillions of dollars over the next decade or more—then there is really something askew.

But, some argue, the government cannot help but default on those bonds in the future, because the rest of the government is running a deficit and will not be able to finance the Social Security system when the Baby Boomers have retired. So Bush, according to this argument, is merely being honest, not issuing threats. Again, this argument is based on a half-truth that is more damaging than pure ignorance.

Begin at the beginning of the Trust Funds: In 1983, a divided Congress and a very conservative President adopted a plan proposed by a bipartisan panel (led by Alan Greenspan and Daniel Patrick Moynihan) to “smooth” the financing of the Baby Boomers’ retirements. At precisely the time when the youngest of the boomers were entering their earning years—and therefore when it would have been possible to cut Social Security taxes significantly without reducing the benefits for a very small cohort of current retirees—President Reagan and Congress raised Social Security taxes significantly. The idea was to set a tax rate that would not need to be changed for decades to come, one that would guarantee surpluses in the Social Security system for the first several decades, offset by deficits in the system for several decades thereafter. During the fat years, an accounting system would keep track of the number of dollars that had been collected by Social Security in excess of its annual needs, plus interest. Those accounting entries would be secured by Treasury bonds, with the Trust Fund balance representing the total of such IOU’s issued by the Treasury. During the lean years, Social Security would then receive money from the Treasury in repayment of the excess funds that it had shoveled to the Treasury starting in 1983.

The 1983 law, therefore, was a promise made across time. The government said something like this: “Listen up, Baby Boomers. We’re going to collect much more in Social Security taxes than is necessary to finance the system while you’re working. When you retire, your benefits will be partly financed by funds from the Treasury that are, in the aggregate, just about equal to the excess contributions you made while you were working, plus interest.”

That was the promise; but as we know, many promises are broken. Therefore, the promise needed to be guaranteed in some way—sort of a government equivalent of “cross my heart and hope to die.” Consider the different ways that the government in 1983 might have tried to guarantee such a promise. It could have passed a law with a super-majority requirement, to allow future legislative minorities to block changes in the law. At the toothless extreme, it could have simply included a passage in the statute to the effect that “future Congresses should take note of the promises made here.” The method that Congress and President Reagan chose was, in some ways, the most powerful guarantee available: It put the promises in the form of Treasury bonds. Promises can be broken, but the promises embodied by Treasury bonds never have been. The Trust Funds represent an automatic appropriation of funds for Social Security benefits during the years when—entirely by design—the system will collect less annually in taxes than it pays out in benefits.

The promise in 1983 also, therefore, included the following guarantee: “And if, when the time comes to pay out benefits, the rest of the government is running a deficit, we guarantee that we will do what is necessary to honor this promise, by allowing the Social Security system to ‘cash in’ these Treasury bonds in exactly the same way that private citizens can.” This is precisely what Professor Anderson was describing: The Trust Funds, like all accounting systems, are ultimately just accounting entries that represent obligations from one entity to another. But the form of those obligations is what really matters. The form of the Social Security Trust Fund is as iron-clad as you can get, and it should remain that way.

Again, though, even promises made in good faith—and backed by solemn guarantees—can sometimes not be honored. How is it that the government can honor future Social Security obligations under the various forecasts of future government deficits? The answer, it turns out, is in the original design of the Trust Funds. Notwithstanding the rhetoric from the Administration, there are no dates at which a crisis will occur.

Go back to the basic plan from 1983: If the rest of the federal government were to run a deficit during the build-up of the Trust Funds, then the total amount of money that the government would need to borrow on the financial markets would be reduced by the diverted Social Security tax revenues. If the annual Social Security surplus was big enough (such as in the late 1990’s), there would be enough money not only to eliminate the need for the Treasury to borrow from the public but also for Social Security taxes to be used to pay off existing Treasury bonds held by the public.

In that sense, to repeat, it is absolutely true that the Trust Funds—and the Social Security system as a whole—are accounting fictions. We happen to collect a tax called the Social Security tax, which allows us to pretend that the Social Security system is separate from the rest of the federal budget and has its own deficit or surplus. In fact, the federal government is either a net borrower or a net lender on the financial markets on an annual basis. (Lately, of course, we have again become a rather significant net borrower.) But this particular accounting fiction was enacted in a very non-fictional form.

What happens when the years of Social Security surpluses (measured, again, by artificially separating Social Security’s taxes and expenditures onto separate balance sheets) inevitably turn to the planned years of deficits? Nothing dramatic. If the Congressional Budget Office’s forecasts turn out to be accurate, Social Security taxes will fall short of scheduled benefits for the first time in about 2020. (If this year’s Social Security Trustees’ report is accurate, this will happen in 2017. If last year’s report is accurate, it’s 2018.) If, as expected, the rest of the federal government is running a deficit around that time, is that not a crisis? Certainly not. In 2019, Social Security’s annual balance will be positive but near zero. In 2021, the system’s balance will be negative but near zero. The contribution in any of those years of the Social Security system to the overall federal deficit, either way, is trivial. From that date and for several decades onward, the Social Security program will pay the difference between full benefits and its annual dedicated tax revenues by presenting IOU’s from its Trust Fund to the Treasury and saying, in essence, “Remember all that money we gave you in the 80’s, 90’s, etc.? Well, it’s time to pay it back.” During this time, Social Security’s net annual shortfall will become nontrivial gradually, and then it will shrink again. If the overall federal deficit becomes larger, lenders to the federal government will require higher interest rates, and policymakers will have to decide whether to cut spending or raise revenues. We can decide to do that now, too, but that needn’t have anything to do with whether the Social Security system is going to become a net borrower in some particular year.

But again, some people say, there will be no money to pay back the IOU’s. If the government is running an overall deficit, Social Security will be left holding an empty handful of IOU’s. If that were true, though, people who are currently holding Treasury securities that are due to mature this year will not get their money, either. If I present the Treasury with a $100,000 face value bond that matures in 2005, I am absolutely sure that I will receive my money. The money will come either from increased taxes or by “rolling over” the debt, i.e., by the Treasury’s borrowing again from other willing lenders. Given that the average maturity of Treasury debt is less than 10 years, this is a common occurrence. Old debt is paid off by issuing new debt on a regular basis.

Is this bad? Not necessarily. The Treasury can issue new debt each year, so long as there are people willing to lend to the federal government. As above, if the Treasury’s overall borrowing needs (including any deficit or surplus from Social Security) become too large, then willing lenders will become harder to find. So the issue is not whether the balances in the Trust Funds are “real,” but rather whether the federal government will, at some point, run out of lenders.

Clearly, that question is completely separate from the calculation that led to the Bush Administration’s oft-repeated crisis date of 2017/2018/2020. If the overall budget is far enough out of whack, the financial markets will become more and more leery about lending to the Treasury. We can and should think about the consequences of such a circumstance, as well as the logically prior question of whether things will really ever get that bad.

I will post future entries on this weblog about future scenarios and the overall budget picture. For the time being, though, I’ll end this post with one further observation. The Bush Administration claims that it can finance private accounts by borrowing several trillion dollars on the financial markets over the next decade or so. They claim that this is not really an increase in net long-term debt, because it merely replaces an unfunded liability (benefits in excess of Social Security taxes, mostly in the decades after the Trust Fund is no longer relevant) with the present value of that liability. Again, though, the nature of different types of promises is the key: The Administration’s plan would give current lenders iron-clad guarantees in the form of Treasury bonds, to be offset later by the possibility that future benefits will be lower. The future cuts, though, really are nothing more than politicians’ promises. Bush would have us trade a possible very-long-term benefit for a guaranteed immediate liability. That does not fit most people’s definition of prudent fiscal stewardship.

April 10, 2005

Social Security Basics 2: If the Social Security Trust Fund Isn’t “Real,” What Is?

Neil Buchanan: April 10, 2005

In two recent posts on this weblog, Professor Elizabeth Anderson and I have argued that the Social Security Trust Fund is “real” in the sense that its promises of future benefits are backed by U.S. Treasury securities, which have always been a uniquely potent method of enforcing political commitments across time. While it is true that promises can be broken, crediting the Trust Fund with Treasury bonds (rather than, say, passing non-binding resolutions in the House and Senate) represents one of the best ways available (perhaps the best way available) to commit future politicians to honor these obligations.

When President Bush travels the country saying that, starting in 2017 or 2018, the Social Security system will be “flat broke,” or will have gone “bust,” or similar phrases, he is at least strongly implying that the government cannot be trusted to honor its financial commitments—even those that are backed by legally-enforceable government securities.

For those who questioned whether President Bush really meant to say that government bonds were worthless, however, he was even more blunt last week. Standing near the file cabinet holding the government bonds that represent the Trust Fund's assets (written, as such things often are, on mere pieces of paper), Bush ridiculed those government bonds as nothing more than I.O.U.’s, saying that it is essential that people not rely on these flimsy promises and instead bet their future retirement on “assets that the government cannot take away.” Apparently, therefore, government can take away its promises to back its own I.O.U.’s, making this an unprecedented statement by the American President that the full faith and credit of our government is not to be taken seriously.

The President’s statements have quite rightly been criticized around the country. It would be foolish, however, to ignore the President’s threats merely because they serve his policy agenda. Even if he tries to prove that politicians are untrustworthy by being untrustworthy himself, and even if he stands to gain politically by forcing us to question our assumptions about the impossibility of default on federal debt, we would be wise to set aside our shock at the shamelessness of it all and ask a simple question: Is there something better than Treasury bonds with which to guarantee future retirement benefits?

There is, to be sure, an understandable sense of shock when we first confront the fact that all financial instruments are legal fictions. That revelation shakes our assumptions about things that we have long taken for granted. For those who are dissatisfied with the idea that Treasury bonds represent something meaningful—who insist that the Trust Fund does not contain anything “real”—we need to ask whether there are any alternative financial instruments that are any more real than Treasury bonds. Are there, in Mr. Bush’s words, “assets that the government cannot take away”? In other words, if the promises embodied by Treasury securities are not real, what financial promises are real?

The answer is, perhaps surprisingly, that no method of financing retirement incomes is any more real than the Trust Fund. This is not a statement of extreme philosophical uncertainty but simply recognition that all forms of saving for the future involve a leap of faith. When individuals or institutions give up something today in exchange for a promise of something in return in the future, there is always the chance that the promisor will fail to honor his promises. There are better and worse ways to enforce promises, but none are superior to Treasury bonds. Not only are the alternatives subject to their own vagaries that make them even less reliable as promises of future income, but those who suspect that politicians are always looking for a way to break their promises will discover that non-government assets are also fatally vulnerable to the caprice of politicians.

What is really at stake in the retirement debate, after all, is a person’s ability to buy what she needs when she is no longer working. One way to provide for future needs is to store up physical goods: build a bunker and fill it with cheese, Spam, and other long-lasting items. For the non-survivalists among us, though, that option lacks a certain appeal. Moreover, some things that we will need in our golden years are not durable items that can be easily stored. Medical care leaps to mind. What we really want is a guarantee that we will be able to buy the things that we need when we need them. Guarantees, though, are just promises. Which brings us back to the question: Is there a better way to enforce the promise of future access to goods and services than through the Social Security system?

President Bush wants us to embrace his “ownership society,” in which retirement accounts would belong to you—and, to repeat his formulation of the issue, no politician can take away what’s yours. Not true. If people invested their individual accounts in any kind of asset (public or private), those accounts could be taxed by future Congresses (even if politicians take a “read my lips” pledge—a promise that we know can be broken). Taxes can be levied on either the returns on the accounts (income taxes) or on the principal of the accounts (wealth taxes). It might seem unlikely that a future politician would risk taxing people’s investment accounts, but in 1983 (when we decided to rely on the Social Security Trust Fund to finance future retirements) it seemed unlikely that a politician would ever suggest that Treasury bonds were worthless. Mr. Bush might be saying that future politicians are less likely to tax retirement accounts than they would be to cut Social Security benefits, but that has not been true until now. He is less likely to tax retirement accounts than to cut benefits, but future politicians might not feel the same way. If we are looking for a politician-proof retirement system, we’re likely to be looking for a very long time.

Beyond tax changes, there are other ways in which individual accounts are not safe from future politicians’ choices. The relationship between you and the financial institution that holds your deposit is governed by a contract—yet another word for a promise. That contract is enforceable in a court of law, a government institution. Suppose that, at some point, your financial institution decides to charge a “management fee,” or a “low-activity fee,” or a “high-activity fee,” or a “cost recapture fee,” or a “fee consolidation fee,” or all of the above. In addition, the financial institution might decide that it can no longer afford to pay you the promised rate of return. Can you sue and win? It depends. Did the contract that you clicked through when you signed up have a clause stating that “this agreement can be changed by the issuer without notice”? If it does, can you have that clause voided? If no such clause exists, can one nonetheless be implied? If you win in court, what happens if your account issuer is insolvent? Future legislation can change the answers to any of those questions. What is “yours” is only yours so long as you can obtain an enforceable legal order stating that it is yours.

One could argue, of course, that financial institutions have good reasons not to anger their customers. They also, though, have good reasons to push the boundaries of the law and to lobby Congress and the White House to pass profit-maximizing changes in the law. People with private pensions are learning to their chagrin that pension contracts can be unilaterally re-written with the blessing of the legislatures and the courts. What pensioners thought they owned—what was theirs—turned out not to be theirs after all.

Even if the law is written in a way that would protect private contractual expectations, the government might decide not to enforce the law. Insider trading rules are currently being enforced more stringently than before, but that can easily change. Governments can also cut funding of their policing agencies, which is an indirect way of allowing promisors to breach their contracts.

In other words, it is simply false to say that Treasury bonds are not real—that is, that they are not promises on which people can reasonably rely—while other promises are real. Actions by both politicians and private actors can result in people losing the promised buying power in which they invested during their working lives.

But isn’t it at least true that private accounts are backed by something more substantial than the promises backing Treasury bonds? Quite simply, no. If you put your money in a bank account, the money does not sit in a vault, waiting for you to come get it. The bank (or credit union, or savings and loan) will lend almost all of that money out as quickly as possible. When people asked Jimmy Stewart’s character in “It’s a Wonderful Life” where their money was, he told them—completely accurately—that their money was in their community, having been loaned out to start businesses, to finance additions on houses, etc. This truthful reply did not put cash in the depositors’ pockets, of course. They needed cash to buy things, and there was no money to give them. Their deposits were backed not by something real but by the promise that, when they wanted to withdraw their money, the bank would have enough money to give them. And that promise was broken.

Today, of course, the government provides deposit insurance for such contingencies. That, however, merely brings us back to politicians’ promises. The deposit insurance funds do not have anything real in their vaults, either, merely promises that the government will provide money if needed. Since the concern over Social Security is that the government will not come up with the money to cover the Treasury bonds in the Trust Fund, it is difficult to see why a promise-breaking government would be any more likely to come up with money to cover banks’ promises to honor withdrawal requests—especially since those are promises that the government itself never made.

Would it work better if private accounts held stocks rather than bank deposits? Again, no. A stock is yet another promise, with a corporation telling you that you are entitled to a portion of any dividends that it decides to pay out. If you want to get your money back, or if you hope to make a capital gain, you must find a willing buyer of the stock. Enron’s shareholders learned that a seemingly solid financial investment can turn to dust overnight. If the economy in the next few decades does as poorly as Social Security’s trustees assume, stocks will not be a reliable source of income, either. It will be cold comfort to retirees to know that they have something supposedly real (part ownership in a company) if they cannot buy what they want with that ownership.

What about commodities: gold, silver, platinum, etc.? Most people who invest in these assets never actually possess the commodity. They merely hold pieces of paper that represent someone’s promise that they really do own the commodity. If people do choose to hold the assets physically, they will need to waste huge amounts of resources protecting those assets (wall safes, etc.) and buying yet another set of breakable promises: insurance policies guaranteeing that lost or stolen assets will be replaced. And this, of course, is to say nothing of the possibility that the commodities will lose buying power in the meantime.

I do not mean to denigrate these various assets. Each has value to some degree, backed ultimately by the same kind of promises that back the government’s bonds in the Social Security Trust Fund. The same kind of promises, but not promises with the same likelihood of being honored. Financial markets treat the federal government’s promises as being so reliable that its bonds are risk-free. No other asset is that “real.”

May 15, 2005

The Never Ending Story: Tax Cut Politics

Neil Buchanan: May 15, 2005

Taxes have always been a political cookie jar.  Few politicians, it seems, can resist the temptation to curry favor with the folks back home by voting for some kind of change in the tax code.  The spectacle has always been fascinating, if not truly strange.  Now, for reasons that are little understood—and perhaps mostly accidental—there is every reason to believe that things will only become stranger.

One of the issues roiling Congress these days is the proposal to make permanent the repeal of the estate tax.  Under current law, the estate tax is being decreased (by a combination of larger exemptions and lower rates) from 2001-2009, then eliminated entirely in 2010, then returned to its 2001 level in 2011 and thereafter.  Like many other provisions in Bush’s 2001 tax bill, therefore, estate tax repeal is set to be undone unless the law is changed.

I strongly support the estate tax.  Like many economists and tax specialists, I see the estate tax as a misunderstood and underused part of our menu of taxes.  The point of this post, though, is not to defend the estate tax but to

explore the implications of the curious procedural rule that brought us the odd prospect of a tax being reduced, then disappearing entirely for one year, then reappearing in its original form.  The rule, which was adopted for understandable (though debatable) reasons, now threatens to make tax policy and politics even less sensible than ever.

In a previous entry on Left2Right, I mentioned that Congress has at its disposal several ways to make its promises seem more reliable.  In particular, I mentioned the possibility of requiring a super-majority vote for a future Congress to change a law.  One way to create such a requirement, of course, is through a constitutional amendment.  But that is not the only way.  The U.S. Senate has imposed upon itself a super-majority rule, requiring 60 votes for any tax cuts that lose revenue more than ten years into the future.  When Bush’s 2001 tax bill was up for a vote, fewer than 60 Senators were willing to make the tax cuts permanent.  Hence, the Bush team was forced to sunset everything in the bill after 10 years.  Some provisions of that law have since been made permanent by super-majority votes, but many others—including repeal of the estate tax—have not.

The original purpose of the Senate’s super-majority requirement, of course, was to prevent a mere majority of the Senate from approving tax cuts that would raise deficits into the indefinite future.  It might seem far-fetched now, but there was a time in the eighties and nineties when Republicans were eager to prevent deficits from getting out of control.  Now, with deficit spending a key part of the Bush economic plan, one might think that these requirements for broad consensus on tax cuts would be an ironic roadblock, with Republicans’ previous procedural maneuvers now preventing them from cutting taxes—representing precisely the kind of budget discipline that the earlier Senators intended to impose on their successors, though none of them could have predicted the role reversal.  Instead, the super-majority rule has created a political goldmine, allowing Republicans in Congress to revisit tax cuts endlessly, granting single-year extensions to some laws and constantly providing grist for the anti-tax rhetorical mill.

The opposite approach is represented by President Reagan’s first major tax bill, passed by a Democratic Congress in 1981.  In that bill, Congress and the President responded to a decade of high inflation by recognizing that higher prices were pushing people into higher tax brackets, paying higher marginal tax rates on incomes that were lower in terms of buying power.  Up until 1981, Congress had simply passed a tax cut bill every few years, readjusting the tax code to undo the effects of inflation.  This approach was ad hoc and unpredictable, though, so the 1981 bill included a provision to index various parts of the tax code, in particular the cutoff points for the various rate brackets (to prevent “bracket creep”).  Such indexing allows everyone to know that, even without legislative action, the tax code will be changed each year to prevent taxes from going up inexorably with inflation.  This is good economics, in particular because it allows people to know that the tax code will be changed neutrally according to objective economic data.

The problem, of course, is that automatic indexing prevents any current member of Congress from bragging to their constituents that they voted to cut taxes.  Taxes have been “cut” in this way every year since 1981, but no one gets any credit for doing so.  While I am not aware of any serious proposals to eliminate indexing, there is every reason to believe that the Republicans in Congress and the President have awoken to the fact that long-term tax changes are not good politics.  People talk about “fixing” the Alternative Minimum Tax (AMT), for example, but in the meantime Congress has voted for partial AMT relief on a rolling one- or two-year basis.  Might we not suspect that, even if Republicans merely stumbled onto this, they are now only too keenly aware that tax uncertainty benefits them politically—that annual, piecemeal, partial, time-limited, ad hoc tax changes are exactly what they need to keep their political base engaged and hungry for more?

In the 2004 election campaign, the Bush team claimed that John Kerry had voted for “higher taxes” several hundred times in his Senate career.  Their count included every procedural vote on a tax bill, as well as votes against tax cuts (not just votes for tax increases).  We can expect the future of tax politics to take that logic and push it to its extreme.  Having taxes constantly on the front burner means that every member of Congress will be faced with a seemingly endless series of votes to cut taxes.  Every vote against a tax cut—no matter how small the cut or how ill-advised the policy—will be a political liability.  Keeping various taxes just alive enough to force regular votes on them could be Karl Rove’s fondest dream.

The estate tax itself might well be the exception to this new rule.  It has become a big-game trophy, and the anti-tax Republicans have long been hungry to taste victory.  On the other hand, a compromise might keep the estate tax barely alive—and on the political agenda.

Either way, though, my expectations for fundamental simplification of the tax code have never been lower.  We no longer have politicians who merely want to add special provisions to the tax code to benefit certain constituents.  Now we have a majority party that is simply addicted to tax cut politics.  They do not want to cut taxes once and for all.  They want to be permanently in favor of cutting taxes.  The result will be an even bigger tax mess than we already have.

September 06, 2005

Tell Us Again

Neil Buchanan: September 6, 2005

Tell us again that government is the problem, that things will be perfect if we just shrink our governments down to nothing and allow the wonders of private enterprise to solve all of our problems.  As we look in horror at the grisly results of under-funded and ignored public works projects, we need to hear again the song that lulled us to sleep for decades, telling us that we will all be better off if we vilify and ridicule all government programs.  Surveying the terrible human cost of a monumental failure to plan for an emergency that was not only predictable but predicted, we need to hear again that the invisible hand is the best planner and that government planning will inevitably make matters worse.

Tell us again that poverty does not matter.  We loved hearing that people living on welfare really had it pretty good, that they were driving around in Cadillacs, that the poverty line had been manipulated by liberal professors to inflate the amount of money going to undeserving people who refused to get a decent job.  When we worried that maybe some people really could not live on minimum

wage incomes (even supplemented by what remained of the safety net), we loved being told that poverty does not matter because over time some people move out of poverty and into higher income groups.  Sure, at any given time, there might be poor people, but we were happy to hear that they need not be stuck there for a terribly long time.  The people who died last week because they were too poor to leave the path of disaster might have had a shot at middle class status one day.  Or the kids that they might have raised might have had a shot.  Maybe.  Let us hear that one again.  It sounded so good.

Tell us again that discussing race is a divisive ploy, that the civil rights gains of the sixties ended any real need to address lingering issues of racial disadvantage in our country.  We long for the voices that told us how racial discrimination was a thing of the past, that political concerns about race were cynical attempts to create guilty consciences in innocent hearts and minds, that there is no longer institutionalized racism, that nominally color-blind laws mean that we really live in a color-blind society.  Seeing the faces of the most stricken victims of the disaster, we must be reminded that racism has been defeated.  We need to hear that story again.

Tell us again that sending ill-equipped national guard troops to die abroad had no downside at home.  Tell us again that public spending is a waste.  Tell us again what a great idea it is to have guns in the hands of millions of people, so that they will be safe from their government.  Tell us again that the federal government is not needed because local and state governments should handle their own affairs.  Tell us again that one state’s problems are of no concern to people in other states.  Tell us again that we can have anything we want and not have to pay for it.  Tell us again that the most important policy is always, always to cut taxes for rich people.

Tell us again that we were smart to have a nonstop tax-cutting, safety-net-shredding party, even while we ignored warning after warning that the costs of our irresponsibility would be incalculable.  Looking helplessly on as the death count begins, as the damage is assessed, as the most shameless politicians continue to pretend that nothing has changed, we need to hear one more time that all of this really was a great idea.

Tell us again.  Please.