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Ralf Seiffe believes, "If the president wants to win the Social Security debate, he and his troops need to steal a page from the Democrats and emphasize the crisis in much more palpable ways than they have so far."

Thursday, March 10, 2005

By Ralf Seiffe

OPINION - Democrats must be gloating that their core strategy of betting against America looks like it is finally going to have its first win.

If this week’s popularity polls are accurate, the swell for Social Security reform has crested and is heading towards low tide. This means that Democrats and others opposed to private accounts have successfully argued that investing in America’s future is less certain than putting your money in their Ponzi Scheme.

This must be heartening to the party of gloom. If Americans actually believce that investments in government are better than in our neighbors’ ingenuity, there is a bright future ahead for ever larger government.

This must be good news for party’s wise guys whose strategy has been soundly repudiated in unemployment, Iraq, Afghanistan, interest rates and between Israel and Palestine. Only with the active connivance of the myrmidons in the traditional media do these wins escape the average American’s attention.

President Bush’s political judgment has been stellar so far but it looks like this one is slipping away. His opponents have positioned the debate in their terms---“there is no crisis”---which despite its it evident falsity does comfort voters who will either be dead when the system defaults or are now too young to care.

Until now, the president has based his proposal on concept of the ownership society. This is an attractive concept and worthy of the world’s oldest and most innovative republic but it fails to engage the public. It’s too good for hoi polloi more comfortable with reacting to crisis.

Republicans, trying to convince folks that Social Security is in crisis, now find themselves in the position the Democrats usually hold. Republicans, at least Reagan Republicans, are genetically optimistic so attempting to exploit a crisis is not their forte’. Frankly, they are not much good at doom and gloom.

If the president wants to win the Social Security debate, he and his troops need to steal a page from the Democrats and emphasize the crisis in much more palpable ways than they have so far.

Here are a few suggestions.

The absolute first thing to do is to repudiate the Social Security trustees’ every one-in-a-while letter purporting to provide Social Security Account information. There letters come in envelopes printed in green ink are designed to counter any suggestion that the system is insolvent. If this were a privately operated scheme, federal prosecutors would cite these letters as the heart of the fraud and a reason to enhance prison sentences. Stop them now. When the trustees object, fire them.

In the place of these counter-productive missives, send a mea culpa letter to the same audience telling the truth about Social Security. Use a lawyer experiences in writing red herring prospectuses to project the troubles and risks of Social Security that any new venture must disclose. Three days after you drop these letters at the post office, tune into the evening news and watch Harry Reid sweat.

Next, Issue a Presidential Directive to the remaining trustees that they must cease using the Social Security Surplus to buy non-marketable bonds from the Congress. Until there are private accounts, require the trustees to purchase US Treasury obligations from the public.

Then, instead of squirreling away worthless paper in Robert Byrd’s state, deposit real bonds with a reputable bank’s trust department. Given the size of this surplus, more than $100 billion this year, it will probably take many banks.

This suggestion might be tweaked to require the SS trustees to buy the bonds from foreigners to reduce their huge dollar holdings. Further, a good bond trader might approach the Chinese and offer to buy at a discount because once the world hears that the US is doing something about its deficits, the dollar will skyrocket and the value of Chinese bank’s remaining holdings will correspondingly rise. Both parties will profit.

Another interesting thought is to take a page from Franklin Roosevelt, the architect of Social Security. During the crisis that was World War II, he asked the most able industrialists to serve their country for the salary of a dollar a year. In the same way that “dollar a year men” became heros, ask the banks to perform this service for a dollar a year. In one quick stroke, take the “transition cost” argument away.

These suggestions are just a start. Get Republicans to sponsor advertisements on MTV warning young folks not to count on Social Security. Get a grand jury investigation going to figure out what false expectations have been created by trustees. Start floating trial balloons to propose reducing current beneficiaries benefits one-for-one, right now, with the savings being directed to a real trust fund.

Democrats know what Republicans don’t understand. Establishing an ownership society will drive a stake through their blood-sucking, 70 year hegemony of the federal government.

Democrats will make any bet against America to preserve this dead carcass. They have already mounted a counter-offensive to the president’s 60 day plan.

Interestingly enough, the Democrats will start their tour on Wall Street and end it in Las Vegas. Nothing could better illustrate the difference between Ownership and welfare better. or more ironically. It’s time for Republicans to adopt more effective strategies.

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Ralf Seiffe advises business start-ups and product launches from Chicago, Illinois and is a political analyst and columnist for the Illinois Leader.