The case against reforming Social Security

In my previous post, I wrote that "if you're worried about [Social Security]'s finances, you can really only do one of two things: Lower the amount of money the program sends out or increase the amount of money it brings in."

That's pretty much true. But there's no real reason to be worried about "Social Security's finances." What we're worried about, rather, is the federal government's finances. If Social Security is proving a drag on the federal budget, then one option is make changes to Social Security, but another option is to make offsetting changes elsewhere in the federal budget.

And increasingly, that's my preference. It's a testament to Social Security's efficiency that every option for balancing its books is a bad option. Raising the retirement age hurts real people. Raising taxes also hurts real people. Cutting benefits hurts -- well, you get the point. Social Security is adding value. Any change you make will either increase how much we're spending for that value or decrease the total value we're getting from the program.

Conversely, there's plenty in the federal budget that isn't so zero-sum: We spend much more on defense than we need to spend. We have an absurdly inefficient tax code that could raise more money while doing less to harm growth if we cleaned it out. We have a health-care system that's about twice as expensive as the OECD average but isn't delivering better results. Cutting and reforming these programs might be politically difficult, but we'd be doing ourselves good, rather than harm, if we could manage it. Comparatively, cutting and reforming in Social Security is politically difficult and does us harm.