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My good friend, Allan Rousselle, has a post on his blog about the election, and I’m having an argument in the comments about the problems with Social Security and Medicare.  Since I spent too much time writing a reply there, I’m going to repurpose the content here.  (Does this recycling get me any points with environmentalists?  No?  Nuts!)

I wrote:

In my opinion, the most significant domestic policy issue in the long term is the looming insolvency of Social Security and Medicare. Obama opposes almost all of the measures that could prevent this disaster — he won’t lower benefits, he won’t raise the retirement age, and he won’t move toward privatization. The only solution he presents (in his “Blueprint for Change”) is to lift the cap on earnings which are subject to the payroll tax, currently at $97,500. According to his website, Obama “will ask those making over $250,000 to contribute a bit more to Social Security to keep it sound… would ask those making over $250,000 to pay in the range of 2 to 4 percent more in total…”

Really? The programs are $50+ trillion in debt, and you’re going to make up for that with an extra 2-4% from those making over $250K?

And someone named “Beeeej” replied:

It’s extremely difficult to take an argument seriously from someone who claims that Social Security and Medicare are “$50+ trillion in debt.” That is a horrifically inaccurate number, too large by a couple of degrees of magnitude. When a rag like USA Today explains the shortfall by claiming it’s “$53 trillion,” they’re not saying those programs are currently in debt by $53 trillion. They’re talking about the amount you’d have to put away in principal as an endowment (never to be touched itself), earning interest, in order to use the INTEREST to repay old debts AND pay future obligations of EVERY government social program (including government pensions).

It’s the equivalent of saying, “You personally owe $50,000 on old debts, and you will also owe $10,000 on your mortgage every year in the future – so you need to put $800,000 in the bank in order to accrue $40,000 interest every year, add $20,000 back to principal to increase it as a hedge against inflation, use $10,000 to pay down your old debt in stages, and $10,000 to pay your mortgage for the year.” That doesn’t make you “$800,000 in debt.”

So I fired back:

I’ll make you a deal — I admit where I got my numbers wrong, if you’ll admit where you got your analogy wrong.

According to the Wikipedia, the $53 trillion — actually, $52.7 trillion, 2007 — consists of:

• a $10.8 trillion chunk, most of which is the result of “official” budget deficits over lo these many years, plus military and civilian pensions and retiree health
• a $1.1 trillion chunk, which is stuff like the Pension Benefit Guaranty Corporation, and undelivered orders (I think this is military equipment, etc.)
• $6.8 trillion in commitments to Social Security over and above the amounts expected to be received in payroll taxes, and
• a whopping $34 trillion in commitments to Medicare programs, over and above the amounts expected to be received in payroll taxes.

The $52.7 trillion figure is a current dollar value figure, and it’s what you’d have to put aside in 2008 to pay all these commitments by spending both the interest and the principal. Here’s where your analogy fails. You assert that the $53 trillion is what you’d have to put aside to pay these obligations without touching the principal — in fact, your $800K example assumes that you put money aside “as a hedge against inflation,” which I take to mean to maintain the principal’s purchasing power after inflation. In this, you are incorrect. You’d have to spend all $52.7 trillion, plus any interest accrued over the next 75 years, in order to meet the obligation.

Now, 75 years sounds like a long time. But this is adding something like $702.7 billion — more than the official deficit has ever been in any single year — each and every year until 2082!

If you have data from some other source (the Wikipedia’s source traces back to the Government Accounting Office’s GAO Financial Condition and Fiscal Future Briefing, January 2008, I’d be very happy to take a look.

There was a lot of blame being thrown at John McCain on talk radio yesterday. I knew it was coming: at one point on Monday, Rush Limbaugh said he’d hold his tongue for another 37 hours. It’s no secret that McCain wasn’t the favorite candidate of the talk radio hosts, who believe that conservatism didn’t lose on Tuesday because conservatism wasn’t on the ballot.

However, I rather suspect McCain was the best candidate that the GOP could have chosen in a year when the party had virtually no chance of winning.In 1996, I bought a book by Allan J. Lichtman called The Keys to the White House. Lichtman, a history professor, analyzed Presidential elections since 1860. He concludes that these elections are primarily a referendum on the incumbent party, and that there are thirteen “keys” that can determine whether that party will retain power. Lichtman claims that the incumbent party can withstand the loss of up to five keys, but six or more keys means a change of party in the White House.

The thirteen keys are:

1. Incumbent-party mandate: After the midterm elections, the incumbent party holds more seats in the U.S. House of Representatives than it did after the previous midterm elections.
2. Nomination-contest: There is no serious contest for the incumbent-party nomination.
3. Incumbency: The incumbent-party candidate is the sitting president.
4. Third party: There is no significant third-party or independent campaign.
5. Short-term economy: The economy is not in recession during the election campaign.
6. Long-term economy: Real annual per-capita economic growth during the term equals or exceeds mean growth during the two previous terms.
7. Policy change: The incumbent administration effects major changes in national policy.
8. Social unrest: There is no sustained social unrest during the term.
9. Scandal: The incumbent administration is untainted by major scandal.
10. Foreign or military failure: The incumbent administration suffers no major failure in foreign or military affairs.
11. Foreign or military success: The incumbent administration achieves a major success in foreign or military affairs.
12. Incumbent charisma: The incumbent-party candidate is charismatic or a national hero.
13. Challenger charisma: The challenging-party candidate is not charismatic or a national hero.

Now, by my count, the GOP only has four of these keys in their favor. McCain wrapped up the nomination fairly early, so the Republicans get Key 2. There wasn’t any serious third party candidate (like Ross Perot in 1992) or social unrest (think Viet Nam protests or late 60s race riots) so they also get Keys 4 and 8. And despite what you might think of the Valerie Plame affair, if you can even remember it, it never rose to the level of tainting the President, so the GOP also gets Key 9.

A whopping nine keys have turned against the Republicans. Clearly, Key 1 turned against them in the 2006 elections when they lost control of both houses of Congress. Term limits take Key 3 away, since Bush cannot run again. (Unpopular as he is, it’s a huge advantage to be the incumbent.) Key 7, policy change, is applicable only to the last four years. While Bush’s first term had significant changes in national policy — No Child Left Behind and Medicare Part D, plus the War on Terror — his second term failed early in its attempt to partially privatize Social Security and hasn’t really attempted any other major policy shifts.

Strictly speaking, the economy is not in recession. To be in recession, the economy has to shrink for two consecutive quarters. This has not happened yet, though GDP did decline in the third quarter, and one could reasonably expect it to in the fourth quarter. However, the media have claimed recession for about a year, now, and the credit market freeze has certainly had as much negative impact on the economy as one could imagine, so I think Key 5 turns against the GOP. The long-term economy, Key 6, turns against the GOP because part of the comparison includes the hey-day of the late 90s.

Key 10, foreign or military failure, turns against the Republicans because the Iraqi front is wildly unpopular, and our military fortunes there have only turned around in the past year or so. Key 11, foreign or military success, is lost because the Surge, which has been quite successful, doesn’t seem to be making much impact on popular opinion about the war, plus our fortunes on the Afghan front seem to be turning downward.

McCain loses Key 12 because he’s not particularly charismatic. Despite the fact that he is a bona fide war hero, his heroism was not part of a winning effort and it is a long time ago. On the other hand, Obama turns Key 13 against the incumbent party through his eloquence and inspirational rhetoric. (Hollow though it may be, in my opinion.)

In short, with nine of the thirteen keys turned against them, the Republican had the deck stacked against them. (Ironically, however, in the elections Lichtman discusses in his book, only two had as many as nine keys turned against the incumbents, and both of them were fairly close elections. In 1876, with nine keys against the GOP, Gov. Samuel Tilden (D-NY) beat Gov. Rutherford B. Hayes (R-OH) by 3 points in the popular vote, although disputed votes in three states resulted in Hayes winning the electoral college. And in 1960, with exactly the same nine keys against the GOP as this year, Sen. John F. Kennedy (D-MA) defeated Vice President Richard M. Nixon (R) by one-tenth of a percent.)

Well, that was unpleasant.

And yet… yesterday’s election may have been the most remarkable thing Barack Obama will ever accomplish: a final chapter in America’s history of race relations.  While there will continue to be disparities of various kinds between whites and blacks, it’s very hard to argue that America is a racist country once a black man has been elected President.

Congratulations are due to the President-elect, and are hereby offered.

Now it is time to wait and see.  Many journalists have written that Obama is a blank slate, that he hasn’t told us — not really — what he believes in, or what he’ll do as President.  There’s some truth to that.  And many Presidencies end up being very different from what the candidate talked about on the campaign trail.  No one expected, for example, comprehensive welfare reform and “the era of big government is over” when Bill Clinton was elected in November of 1992.  No one expected the War on Terror or Medicare Part D when George W. Bush was elected in November of 2000. What kind of President will Barack Obama be?  We’ll find out.

In the mean time, I hope those of us on the short side of the vote count can avoid being as… uncivil… as those on the short side the last couple of times.  While I expect that I will disagree with President Obama on a great many issues, I intend to treat him with the respect due the office of President. The liberals have spent the past eight years accusing President Bush of being every kind of evil imaginable, mostly because of the closeness of the 2000 election.  The conservatives spent the previous eight years accusing President Clinton of every kind of dishonesty, largely because Ross Perot took more votes away from the Republicans than from the Democrats.  All of this has been damaging to the political fabric of our country.

Our job now, as conservatives, is to regroup and recharge for another election two years from now.  At present, we are the loyal opposition, working to block the worst excesses of a politically powerful majority.