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Jewish World Review Oct. 17, 2007 / 5 Mar-Cheshvan 5768 The unforgotten man By George Will http://www.JewishWorldReview.com | Explaining a simple proposal to help people squirrel away gold for their golden years, Hillary Clinton said that a person "should not require a PhD to save for retirement." But can even PhDs understand liberalism's arithmetic and logic? Consider the controversy over the State Children's Health Insurance Program, which is up for renewal. Most Republicans favor extending it. Almost all Democrats, and some Republicans, favor expanding it in a way that transforms it. SCHIP is described as serving "poor children" or children of "the working poor." Everyone agrees that it is for "low-income" people. Under the bill that Democrats hope to pass over the president's veto tomorrow, states could extend eligibility to households earning $61,950. But America's median household income is $48,201. How can people above the median income be eligible for a program serving lower-income people? Politics often operates on the Humpty Dumpty Rule (in "Through the Looking Glass," he says, "When I use a word, it means just what I choose it to mean — neither more nor less"). But the people currently preening about their compassion should have some for the English language. Clinton's idea for helping Americans save for retirement is this: Any family that earns less than $60,000 and puts $1,000 into a new 401(k)-type plan would receive a matching $1,000 tax cut. For those earning between $60,000 and $100,000 the government would match half of the first $1,000. She proposes to pay for this by taxing people who will be stoical about this — dead people — by freezing the estate tax exemption at its 2009 level. FREE SUBSCRIPTION TO INFLUENTIAL NEWSLETTER Every weekday NewsAndOpinion.com publishes what many in the media and Washington consider "must-reading". HUNDREDS of columnists and cartoonists regularly appear. Sign up for the daily update. It's free. Just click here. A conservative case can be made for something like Clinton's proposal. It is a case for reducing the supply of government by reducing demand for it, and doing so by giving people ownership of enlarged private assets as a basis for their security. It is a case for raising the nation's deplorable saving rate and simultaneously encouraging the nation's economic literacy and temperance by giving more people a stake in equities markets. George W. Bush made this case in his advocacy of personal accounts financed by a portion of individuals' Social Security taxes and invested in funds based on equities and bonds. When he proposed this, Clinton stridently opposed him, and not just because she thought it would undermine Social Security's solvency and political support. She also said it was a dangerous gamble that would make retirement insecure by linking retirement savings to the stock market. Echoing a trope from Al Gore's 2000 presidential campaign, she said investing retirement funds in the stock market was a "risky scheme." Today her Web site calls her proposal a way to save for "a secure retirement." After an undisclosed epiphany, she belatedly recognizes that 401(k) funds invested in equities are a foundation for security. John Edwards, too, has puzzling ideas. For the entertainment of Iowans, he has reinvented himself as a 19th-century Kansan — Mary Elizabeth Lease, the prairie populist who urged farmers to "raise less corn and more hell." In August, Edwards urged an Iowa audience to throw off Washington's yoke: "We need to take the power out of the hands of these insiders that are rigging the system against you." To measure how much Iowans are suffering from the rigging, Stephen Slivinski of the libertarian Cato Institute was asked to mine the most recent Census Bureau data. He concluded that Iowans paid $15.6 billion in revenue to the federal government and got $19.4 billion back, a gain of $1,286.53 per Iowan. But that is not all. Washington has rigged the system to inundate corn-growing Iowa with subsidies for corn-based ethanol. Slivinski says it is difficult to pin down the Iowa corn farmers' harvest of dollars because the subsidies come from exemptions from excise taxes and tariffs (54 cents per imported gallon) that stifle competition from cheap ethanol imports. It is, however, reasonable to add $2 billion to Iowa's gain from Washington's rigging of the system, so the average Iowan's gain is at least $1,963.65. Suppose Iowa did not have crucial presidential nominating caucuses. Or suppose it had them but its crucial crop were, say, broccoli rather than corn. Would the federal government still be, well, rigging the system to create a phony "market" to satisfy a specious "demand" for mandatory and subsidized ethanol? No, but it probably would be mandating broccoli at every meal. Many politicians pander, as Edwards does with gusto, to Americans' current penchant for self-pity. Hence the incessant talk about "the forgotten middle class." Because such talk is incessant, it of course refutes itself. Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here. George Will's latest book is "With a Happy Eye but: America and the World, 1997-2002" to purchase a copy, click here. Comment on this column by clicking here. Archives © 2006 WPWG

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