by Mitch Kokai
Senior Political Analyst, John Locke Foundation
William Voegeli explores in a fascinating new National Review Online article the reasons why some of government’s harshest critics include people who benefit from government programs such as Medicare and Social Security.
An American who warns an elected official to keep the government’s hands off a social-insurance program doesn’t misunderstand our welfare state but has grasped its central argument exactly as it has been presented. Social insurance, we have been told (and told and told), is a mechanism through which we insure ourselves against financial vulnerabilities. The benefits are ours because we paid for them in advance. They vary because the amount we paid for them varies. Having “contributed” our taxes, we insist on receiving our benefits, since we were assured that the former are just like insurance premiums, and the latter just like insurance settlements. …
… Our welfare state is a system at war with itself. It offers us, in our capacity as beneficiaries of its programs, a terrific deal. Not only do we receive the material benefit of enormous windfalls on our “investments,” ones that entail no participation in any kind of capital formation and, therefore, never expose us to any risk of capital destruction. We also receive the moral benefit of strenuous reassurances, delivered over many decades, that our windfalls are not really windfalls because we’re merely getting back what we’ve paid for. And so we have no reason to think of ourselves as recipients of charity or dependents on welfare. We’re entitled to every last dollar of our benefits. They come to us as a matter of right.
What the welfare state offers us in our capacity as taxpayers supporting its programs, however, is a terrible deal. We are the ones who’ll have to cover the difference — $188,000 in the Urban Institute’s example — between what each American actually did pay in social-insurance taxes and the much larger amount he’s been told again and again he’s entitled to get “back.”