When last we saw our intrepid heroes, the approaching wave of baby-boomers was threatening to overwhelm OASDI, and hard-working Polish farmers had the CAP at the point of several rusty pitchforks (oh, the tetanus!). What strikes me in the comparison of the two is the response to the crisis in each. Certainly, the fatal flaws in these programs have existed from their inception (since they lie in that very inception). Both, however, have recently faced the need for reform from an impending, irresistible, and disastrous increase in cost. But reform has occurred in only one of these cases.<\/p>\n
When last we saw our intrepid heroes, the approaching wave of baby-boomers was threatening to overwhelm OASDI, and hard-working Polish farmers had the CAP at the point of several rusty pitchforks (oh, the tetanus!). What strikes me in the comparison … Continue reading
\nNow, there are lots of caveats to the comparison, but let me first make the comparison. In response to what were likely to be astronomical increases in the cost of the CAP, the EU managed to reform it. Of course, they had more than one option\u2014they could have abolished it, they could have lowered the target prices (the price level they sought to maintain through intervention), or they could have made agricultural subsidy independent of production (\u201cdecoupling\u201d).
\nIn the event, they chose the latter path, which is hardly surprising. The first would have put large numbers of angry French farmers on the streets of Brussels with torches in one hand and scathing glances filled with existential ennui in the other. It likely would have been unpopular with the newly acceding countries, as well, since for many of those countries this represented one of the benefits of membership. The second option would have angered only farmers in the current countries, and while consumers would have benefited, concentrated costs and dispersed benefits don\u2019t make for good policy in a democracy (works great in authoritarian systems, though).
\nThe least politically costly decision was, in fact, the one they made\u2014keep spending what we are now, but make sure the amount doesn\u2019t increase in the future. Current farmers aren\u2019t happy, because the money has to be spread a little further around, but neither are they outraged. Similarly, acceding farmers aren\u2019t happy, because they will miss the windfall they anticipated under the CAP, but neither are they outraged at getting nothing. And the EU got to remove the connection to production that was causing the costs to balloon.
\nSocial Security, on the other hand, remains mired in its situation. Certainly, Congress could eliminate the program or reduce the payments, though they\u2019d have a host of knitting-needle-wielding (say that five times fast) grannies after them, with no great thanks from the young whippersnappers who benefit. There\u2019s a reason it\u2019s called \u201cthe third rail of American politics.\u201d But Congress could decouple it from earnings, and redirect payments to those of lowest means. And they haven\u2019t.
\nNow there are certainly differences between the CAP and OASDI. Scale is one of them\u2014OASDI involves roughly 10 times the amount of money. That could work two ways. On the one hand, perhaps it means more to those who receive it (though I doubt it\u2014that probably reflects the scale of those receiving payments), which makes it more difficult to alter. To borrow from Scotland\u2019s poet-genius, Mark Knopfler<\/a>, no one wants to crash the ambulance.
\nOn the other hand, that would seem to make reform more pressing. And perhaps that indicates the difference\u2014timeframe. CAP reform arrived at its critical point, and Social Security will, too. One could argue that the EU put off reform until the last possible moment\u2014and since Poland has already acceded, but the baby boomers have retired yet, Social Security hasn\u2019t reached the last possible moment yet. Call it the Candide gambit: it\u2019ll be okay by the time we get there.
\nNevertheless, I can\u2019t help but think that part of the reason the EU successfully reformed its boondoggle, while the U.S. has not, is the presence of indirect democracy in Europe. The people who had to answer to the farmers could use the EU as the scapegoat, whereas Congress\u2026well, they usually blame the President, who blames them right back. That is, there\u2019s a political buck that gets passed. Neither Congress nor the President wants the buck to explode while they\u2019re holding it.
\nIndirect democracy, or at least some role for it (as in the Senate before the 17th Amendment), allows someone who doesn\u2019t have to face voters to bear the brunt of their electoral wrath. And that, sometimes, is what allows politicians to do the right, rather than the expedient, thing.<\/p>\n","protected":false},"excerpt":{"rendered":"