I heard a radio commentary by economist Robert Reich on NPR that serves as the perfect example of why We the People should judge an economist’s opinions by that economist’s political leanings. Economists are hiring political and they often practice their form of vodoo in support of their political agenda.
Reich is a very liberal economist. Fine. He is entitled to those views. However, he is an excellent example of the shallow thinking of economists that pervades our public debate. Reich provides what is, unarguably, a very simple solution to the problem of paying for Social Security. Reich’s solution is to increase the cap on Social Security to earnings of $180,000. He says that this solution will finance Social Security for many years into the future. Taken in a vacuum, his solution would be very good. And if our nation’s economy operated in a vacuum we would have implemented Reich’s solution a long time ago.
But economics is not a vacuum. There are far more variables to any economic solution than economists can analyze. There are many variables that economists do not understand and do not know about. The additional dollars Reich would divert to Social Security come from somewhere. Perhaps the person Reich wants to tax for Social Security, would, if allowed to keep their money, pay someone to paint a room, or they might buy a car (maybe an electric car!), or increase their contribution to their favorite charity.
Reich’s plan robs those downstream that would have earned that money from the person Reich wants to tax. We the People are losers in Reich’s plan. That fact is perhaps more simple than increasing the Social Security cap.
