Cross-Posted from The Campaign For America's Future Virtual Summit on Fiscal & Economic Responsibility (For People Who Did Not Wreck the Economy)
If you're playing checkers on a checkerboard, but your opponent is playing chess, it's only a matter of time until you lose. And that's the problem in fighting against the enemies of Social Security and Medicare who are rallying around the flag of so-called "fiscal responsibility" this week. The attack on these two popular programs is part of a decades long war-a game of chess, if you will-that all too few of us understand.
Earlier in the Virtual Summit, Kim Wright provided a hint of what it's all about by calling attention to Cato Institute document from 1983, when the very immediate prospect of Social Security running out of money lead to the creation of the Social Security Trust Fund:
The Cato Institute described their long-term strategy (implemented after the last major Social Security reform in 1983) this way:
So here we are. As promised, the American people have been bombarded with a steady stream of pronouncements that Social Security is bankrupt, broken, or just too expensive. In truth, what these folks really mean is that they don't [want] Washington to honor its obligations to the Social Security trust fund.
Cato's "Lenninst strategy" also included building up a cadre of those who stood to benefit from privatization--some just a little, others enormously:
What we must do is construct a coalition around the Ferrara plan [for gradual privatization], a coalition that will gain directly from its implementation. That coalition should consist of not only those who will reap benefits from the IRA-based private system Ferrara has proposed but also the banks, insurance companies, and other institutions that will gain from providing such plans to the public.
As it turns out, of course, the "other institutions that will gain from providing such plans to the public"--Wall Street--turned out to be almost entirely responsible for the current financial crisis--a crises that impacts the long-term health of Social Security far less than it impacted those institutions themselves. The difference is, of course, that due to its enormous political clout Wall Street has managed to save itself--temporarily at least. Social Security--not being a wealthy special interest--remains far more vulnerable, just like Medicare, Medicaid and all other programs that "only" benefit the American people at large.
Still, even a full awareness of what Cato proposed, and how well the follow-through has conformed to its vision doesn't fully explain the nature of the chess game. To understand that, we need to turn to the creation of Europe's first modern welfare state by Otto von Bismark in the 1880s, and to Gosta Esping-Andersen's classic 1990 study, The Three Worlds of Welfare Capitalism.
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