George Will on Redistribution and Inequality

If you read anything today, it should be George Will's editorial in the Washington Post.  It is an intelligent discussion of issues we hear talked about quite a bit, though the interlocutors are rarely informed about what they say and think.

We hear much talk about inequality of wealth in this country.  Mostly, the talk comes from liberals for whom the very existence of inequality is anathema.  They search about for various bogeymen, fixing mostly on bankers, Wall Street, rapacious capitalists, and Republicans.  They look at inequality and declare it bad, though they haven't been able to articulate WHY it is bad, and why it measures anything but envy.  They prattle on about the size of CEO pay as compared to those who work for him, without asking coherent questions about the lot of that worker compared to 25 years ago.  The comparison is never apples and apples.  Why? Well because those comparisons tell a far different story.

But I am open minded enough to consider that the FACTORS contributing to inequality of wealth are worth looking into.  Perhaps in that inquiry, we will find ACTUAL mechanisms for causing the kinds of social distortions that liberals claim are coming our way.  The Depression and the rise of the Nazis are most often put forward as proof that inequality is going to destroy us, without any real discussion of those times in our history when inequality was high and social unrest low.  The rhetoric is plain envy, and Will has it right when he opines: "People are less dissatisfied by what they lack than by what others have. And when government engages in redistribution in order to maximize the happiness of citizens who become more envious as they become more comfortable, government becomes increasingly frenzied and futile."

But what is it about this particular editorial that caught my eye?  Well, it is the whole discussion of how the very "socially conscious" policies we have pursued in this country as we enshrined the welfare state have contributed to inequality.  That is, redistribution of wealth--the panacea of the Demo-Socialists--brings about the very conditions against which they now rail.  Here's Will:  "The welfare state’s primary purpose is to subsidize the last years of Americans’ lives, and the elderly are, after a lifetime of accumulation, better off than most Americans: In 2009, the net worth of households headed by adults ages 65 and older was a record 47 times that of households headed by adults under the age of 35 — a wealth gap that doubled just since 2005. The equalizing effects of redistributive transfer payments are less today than in 1979, when households in the lowest income quintile received 54 percent of such payments. In 2007, they received 36 percent. Because Social Security and Medicare are not means-tested, the share of transfer payments going to middle- and upper-income households tends to increase, for several reasons. The retirement age is essentially fixed, but people are living longer. And because the welfare state is so good to them, the elderly are unusually diligent voters and are especially apt to vote on the basis of protecting their benefits". 

Here is something I can get my teeth into.  If American workers -- irrespective of how much money they make-- in their prime earnings years begin to believe that their labors are to an unacceptable degree going toward the sustainment of good living for America's retirees--rather than to the advancement of their family's goals--we have the makings of inter-generational strife that could actually be politically meaningful.  THAT, ladies and gentlemen, is a cause and effect relationship that I can grasp, and which I believe ought to be addressed with policy solutions.  The fact of inequality does not bother me so much as the fact of one of its major contributions--redistribution of wealth from citizens of working age to citizens of retirement age.  This means we spend an increasing amount of our tax money on people who simply don't need it.

Of course we must be compassionate toward our seniors, and we must never allow the kind of Depression-era grinding poverty in old age to be a facet of our economics again.  But that doesn't mean that we should be siphoning off money from productive wage earners to pad the coffers of well-heeled seniors.  Social Security and Medicare should be MEANS TESTED in some manner.  Both long ago ceased to be contribution funded as our life expectancies increased and our fecundity decreased.  We can't abide by the fiction of these programs being ANYTHING but entitlements, and the great lie of the FDR era that social security can never be confused with welfare must be exposed.  It IS a form of welfare, one that as a society we generally support and one that as a civil nation we are morally bound to provide.