The Fallacies Underlying the Warren Social Security Plan

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https://www.manhattan-institute.org/economics/budget

The Fallacies Underlying the Warren Social Security Plan

Charles Blahous

OCTOBER 7, 2019 

BUDGET

Elizabeth Warren, U.S. senator from Massachusetts and candidate for president, recently released a Social Security plan that would exacerbate many of the program’s existing problems while also creating several new ones. The plan was announced in an article she posted on Medium, along with an analysis authored by Moody’s Analytics’ Marc Zandi. Normally, members of Congress have their Social Security proposals scored by the nonpartisan Social Security Administration Office of the Chief Actuary, but this proposal was introduced in a campaign context rather than a legislative one, hence the private analysis. While the proposal contains several substantive flaws, it serves the simple rhetorical message of promising higher Social Security benefits for all. The rationales given in Sen. Warren’s article for her plan exhibit several points of substantive confusion, which may partially explain why the proposal contains as many problems as it does.

It is impossible for an outside analyst to state with certitude why any particular public figure embraces a specific policy. Policy choices derive from several things, including subjective value judgments, gut instincts, one’s read of the substantive realities, political considerations, and many other factors. It is common for public figures to release plans accompanied by analytical findings that appear to support the proposed policies. However, the inclusion of such material rarely means that the policy was developed on the basis of neutral analysis of available information. At least as often, the analysis is provided as an after-the-fact rationale for policy choices driven by other subjective goals. This is particularly important to bear in mind when reviewing a Social Security plan such as Sen. Warren’s.