Monday, March 28, 2005

Wack job of the day

From one of the fundamentalist demonstrators working with Terri Schiavo's parents, linked here:
"Mahoney said the fact that Schiavo has survived nearly 10 days since the removal of the tube that has supplied her with nutrition and water indicates that she wants to appear before the House Government Reform Committee."
The estimable Mahoney also "challenged House Speaker Dennis Hastert, an Illinois Republican, to show that he was not 'just playing politics' with the subpoena." So the Republicans are starting to reap the whirlwind on this a bit.
We also learn on-line here that, in 1988, Tom DeLay apparently agreed that his father, having lost brain function in the same manner as Terri Schiavo, should not be connected to a dialysis machine to keep his empty shell alive. This, of course, did not prevent DeLay from describing a fundamentally identical decision in the Schiavo case as "barbarism."
DeLay's press secretary tries desperately to distinguish the two cases on the ground that a feeding tube is different from a ventilator. I suppose he could also have distinguished them on the ground that the patients' last names were different.

UPDATE: Here is an astonishing story about a former U.S. intelligence officer in Iraq, a self-proclaimed torturer of Iraqi prisoners, who is worked up about the fate of Terri Schiavo. I guess I was more literally correct than I realized in my earlier post where I suggested that if she weren't brain dead, "they'd be fine with the CIA torturing her."

Friday, March 25, 2005

A meme that deserves death

Yesterday's Tax Policy Colloquium at NYU featured a paper by Steve Bank of UCLA Law School, entitled A Capital Lock-In Theory of the Corporate Income Tax, available here. Although I like Bank's legal history work, I disagreed with a lot of the analysis in the paper, which attempted to link one of corporate law's main features - the fact that a shareholder cannot demand her proportionate share of firm assets, since distributions are controlled by the Board of Directors - to the imposition of tax at the corporate level. One of my main objections concerned how the paper, following an established law and economics tradition in legal scholarship, seemed to blend descriptive with normative analysis, i.e., why we have the type of corporate tax system we now have with why this type of system might be good. Bank disclaimed meaning to take this view (which is contrary to the anti-presentist historian's code that he well understands), so what follows is a criticism, not of him, but the law and economics tradition that he did appear to invoke at the paper's start, which describes the search for a satisfying "positive theory of the corporate income tax" that would justify it theoretically and explain "why we treat corporations differently than partnerships."
The meme I denounce, with I hope not quite Bobby Fischeresque passion, in the title of this entry is the "positive theory" meme, which purports to explain why a given rule exists in terms of why it is needed and good.
When Blackstone celebrated the English common law, the idea may have been that God, as a noted Anglophile (in the view of the English) had taken care to make it come out just right. (If I am wrong about the basis for Blackstone's belief, then never mind.) But today I think, at least in academic circles that are not theofascistic in the Bush/DeLay tradition, the basis for the "positive theory" meme has more to do with a confusion either about how evolution operates, or about the reason for certain fruits of evolution that we observe whether or not they are being attributed by the observer to evolution.
Suppose we ask why people have a pancreas. A teleological reverse-engineering approach makes perfect sense here. Figure out what it does, and you will know why we have it. And we have it because it does something that benefits us. [Not to deny, of course, the appendix, the apparently dispensable tonsils, etc.] The reason this approach makes perfect sense is that evolutionary pressures operating at the level of natural selection of individuals have created the equivalent of deliberate design, i.e., having something because it helps the individual who has it. And natural selection also operates at the gene level. As Richard Dawkins famously emphasized, genes are a fundamental level at which natural selection occurs, and thus we may observe design of genes that is as if the genes were trying to help themselves in being disseminated.
Evolutionary biologists used to think that natural selection operated at the species level in such a way that traits would exist "for the good of the species." E.g., a monkey might warn other monkeys that snakes were coming from the ground, or hawks from the sky, because it was good for the monkeys to be warned. Now, there certainly is some natural selection at the species level, for example, in the sense that a species that, say, as a result of runaway sexual selection, adopts genetic innovations that happen to be highly favorable to all of the members' survival might do better than one that, through the same process, adopted something with less of these side benefits. But "good of the species" adaptations must face the prisoner's dilemma problem. If I promote the survival of my species at the expense of my own survival (or that of my kin), then natural selection within the species will tend to select against whatever leads me to do this. For example, if the monkeys that issue the warnings get eaten more because they draw the predator's attention, there will be selection against their doing so (assuming genetic causation) unless there is sufficient offsetting benefit to themselves or their genes (e.g., aiding kin who share the gene, or else reciprocal altruism through deals that help both sides and in which shirking can be policed).
Maybe this is just an overly longwinded way of making the obvious point that society will not adopt collective institutions that are good for the society just because they are good for the society, unless the self-perceived interests of the individuals who influence political outcomes are served thereby. One certainly can't posit here natural selection at the societal level that has led only those societies with good corporate tax rules to survive. So to my mind it is a fallacy, akin to positing good-of-the-species adaptations without showing how they are sustainable at the individual and genetic levels, to look for "positive theories" or "justifications" in the standard legal literature sense, based on the premise that, as with the pancreas, once we decide what a given institution is doing (since we know it must be doing something good) we have as well a full explanation of why it exists. (Not to mention as well that these are usually single-bullet explanations, the more counter-intuitive the better, of institutions that have multiple effects both good and bad.)
Legal Panglossians, beware - I am onto you.

Thursday, March 24, 2005

Kudos, this time, for David Brooks

I have certainly not been shy in past blogs about trashing David Brooks when I thought he deserved it, so I shouldn't omit to praise him for showing a bit more of that above-the-partisan-fray spirit that I had been hoping for when he started writing for the Times.
A couple of days ago, he pretty clearly called Tom DeLay (or at least his aides), along with Ralph Reed and Grover Norquist, "sleazo-cons" whose outrageous lobbying scams constitute "sleaze of a high order" that rank with the worst deeds of "Tammany Hall grafters and Chicago ward heelers."
Perhaps I am making Brooks' column sound more uninhibited than it actually is, as much of the above language is directed in particular at lobbyist Jack Abramoff.
But Brooks pretty clearly, as the record justifies, associates Norquist, Reed, and DeLay's people with the Abramoff-style operations. So I would have to say he is coming down pretty hard on these guys, and doing better than William Safire ever did at showing a genuine willingness to call things honestly.
Let's hope it's catching.

A "Yes, but" for Brad DeLong and Paul Krugman

Sorry for the almost week-long blogless period. I am trying to restore my posting frequency, as the tragedy noted in earlier posts recedes, but I was on vacation with family and never got around to it.
A couple of interesting points I mean to comment on appeared in the press while I was away. For one, the following column from Paul Krugman, which I am linking to Brad DeLong as his site (unlike the Times) doesn't require registration.
Herewith Krugman:

Sometimes you really have to wonder. It should be obvious that the Social Security Administration's estimate of the growth of unfunded liabilities says nothing - nothing at all - about the cost of delaying a "fix", whatever that might mean. But it seems that even many economists - to say nothing of Joe Lieberman - don't get it.
So here's an example, to illustrate the point.
Suppose that an asteroid is bearing down on our planet. If nothing is done, it will strike in 2019, inflicting $20 trillion in losses. At a nominal interest rate of 5 percent, that's a present value of $10 trillion.
If we do nothing about the asteroid, by next year the present value of the future losses from the asteroid strike will be $10.5 trillion. So the "unfunded liability" from the asteroid strike rises by $500 billion a year.
Suppose that there is a way to fix the problem: we can send Bruce Willis into space to blow up the asteroid. So here's the question: if we wait a year to send Bruce Willis into space, does that cost $500 billion?
Of course not: it could cost either more or less. If waiting a year means that we've lost our last chance to stop the asteroid, it costs $10 trillion - the full present value of the avoidable losses the asteroid would inflict. On the other hand, if Bruce Willis can still blow up the asteroid next year (or any year before 2019), there is no cost at all to waiting. In fact, if waiting increases the Willis expedition's chances of success, there's a benefit to delay.
In other words, the $500 billion increase in the present value of the future costs from the asteroid says nothing about the costs of delaying action. All it says is that the future is getting closer.
The same is true for Social Security. The future is getting closer, so the unfunded liabilities of Social Security are rising in present value (though not as a percentage of GDP). This says nothing at all about the cost of delaying a "fix.' Those costs, if there are any, depend on the nature of the fix.
And it's hard to see any costs of delaying the Bush version of a fix. After all, the problem is that in the absence of changes in the system, at some future date Social Security may have to pay reduced benefits. The only thing the Bush plan does to help the system's finances is - guess what - reduce future benefits. Why does waiting a year to announce benefit cuts that won't happen for several decades have any cost?

DeLong then dutifully chimes in:

"Paul is, of course, right. There is no real economic cost associated with delay by itself: the $600 billion per year number is just a standpoint-of-valuation and choice-of-units effect. There is a real economic cost associated with delay only if delay robs you of the opportunity to undertake the most efficient and effective Plan A and forces you to adopt an inferior Plan B for fixing the problem instead. That's not the case here."

This is an interesting little chestnut for me, because I am generally a fan of infinite-horizon forecasting (notwithstanding its absurd misuse in connection with the Bush Social Security plan that does nothing to restore long-term solvency), and indeed I have argued that the proper economic-accrual measure of what we call the budget deficit would be the year's increase in the fiscal gap - $600 billion in this example. One point I plan to think about a bit more is that, important a principle though economic accrual of future liabilities is for various purposes, for other purposes, relating to the probability of future events, it may miss the mark. For example, although I like to say that the Bush prescription drug enactment cost $16.6 trillion (the estimated present value of the unfunded benefits it promises), obviously it would have been worse for Bush to waste $16.6 trillion that was spent today, as this would be 150% of a single year's GDP. The difference is that we might not (surely will not) actually spend the $16.6 trillion now projected, so in a sense the current policy because we know it can't and won't happen. (Which is not to say the words have no bad consequences given how they shape expectations and the political consequences of inertia.)
Anyway, Krugman and DeLong are right about the Bush plan because it doesn't actually cut benefits until later. But if we were talking about a rational response to the Social Security fiscal gap, as opposed to the Bush plan, the fact that the gap under present policy keeps growing each year actually does indicate that there is a cost associated with delay. This is the opportunity cost actually to shift policy sooner rather than later. Some of the fixes, such as those involving the better-off among the current elderly, do become impossible if we don't do them now.
Also, by delaying benefit cuts (as distinct from the announcement date for future benefit cuts, which only affects planning and perhaps the political probabiliies), we lose the ability to cut them less steeply when we do cut them. Similarly, suppose you had to cut your consumer spending over the rest of your life. The longer you wait to start the cuts, the steeper and presumably more painful the cuts will be when you get around to making them. The familiar argument in the public economics literature for "tax smoothing" is similar.
SO: Krugman and DeLong are right that a year's delay in adopting the Bush plan does not cost $600 billion. But they would be wrong if they argued that the accrual of the future liabilities does not indicate any grounds for responding (actually, not just by pre-announcement) sooner rather than later.
The question of how to think about the government's long-term fiscal sustainability problems is quite intricate and complex; more so than I had thought for a while even after thinking about it for the last 10 years.

Friday, March 18, 2005

First, do no harm

It's good to see Congress keeping so busy working on the critical issues of our day. Having completed the baseball steroid hearings yesterday, they are now on to the case of the brain-dead woman in Florida whose husband says that she would have wanted her feeding tube removed. As a gambit to keep her alive, Senate Majority Leader Frist wants to call her as a witness, on the view that federal law concerning the protection of witnesses will then require that her feeding tube be kept in. And the Government Reform Committee in the House, fresh from its baseball hearings triumph, is working on legislation to intervene permanently regarding her care.
Despite the very real tragedy here and the moral complexities of the withhold-care and related euthanasia issues, it would be a mistake not to laugh at the crass cynicism of the U.S. Congress in milking this issue for favorable soundbites. So readers are invited to offer their own jokes here. Here are a few offerings:
--At last the Senate has found a witness on its own intellectual level.
--No wonder they're intervening. If brain-dead individuals can have their care terminated, half of the U.S. Congress might be next.
--It's a good thing she's brain dead, or else they'd be fine with the CIA torturing her.
--As long as Congress is in the business of offering medical care instructions for specific cases, I wonder if they could get me a new theraband for my shoulder exercises. I'm awfully busy, and apparently I need a prescription.

Thursday, March 17, 2005

Taking out the trash

Some interesting news from a recent article by Sydney Blumenthal in Salon: Not only is Tom DeLay potentially in big legal trouble, but so are a couple of other big names in the slimy innermost circle of Washington politics:
"Meanwhile, the Justice Department has impaneled a federal grand jury to hear testimony into possible fraud and public corruption by one of the Washington lobbyists closest to DeLay, Jack Abramoff, and his business partner, public relations executive Michael Scanlon, DeLay's former press secretary. That investigation might yet encompass two other DeLay allies, former Christian Coalition leader Ralph Reed, another business partner of Abramoff's, and Grover Norquist..."
I believe this is the reputed rip-off scam that victimized Indian tribes.
Grover Norquist facing possible legal charges for corruption and selling government access? Perhaps Mr. Small Government will end up lamenting that the government's jail cells aren't one person smaller.

Wednesday, March 16, 2005

Tomorrow's headlines today

... "'Where's the buzz?', I kept asking after injecting myself." ...

Tuesday, March 15, 2005

Requiem for Social Security reform??

David Brooks, playing his I'm-thoughtful-and-above-the-fray card rather than his partisan card now that the election season has passed, worries about the apparent failure of President Bush's Social Security plan:
"[I]f Social Security reform fails ... it will be many years before any sort of big entitlement reform will come up again. The parties will keep playing chicken, and we will soon find ourselves catastrophically buried under our own debt."
Brooks is making a prediction, not an immediately verifiable or falsifiable claim about current policy. But I must say I strongly disagree. Actually, what I disagree with is not the somber prediction, which seems all too plausible, but the suggested causation.
Bush has gotten burned, not for trying to tackle the financing gap, which his Administration has for some time admitted is not addressed by substituting private accounts for existing benefits, but for trying to run a unilateral steamroller on a controversial policy change, on the supposed view that this would permit otherwise controversial benefit cuts to be made. Instead, he seems to have made benefit cuts even more of a political hot potato than they would have been standing alone.
There is no lesson whatsoever that the parties cannot, as in 1983, cooperate to make Social Security more sustainable by combining tax-side and benefit-side changes. If anything, what has happened this year reconfirms the lesson of 1983 by showing that alternative political approaches do not work.
Brooks blames the Democrats for playing Yasir Arafat, as he puts it, by turning down compromise offers floated by Republican Senators. At this point I'm not enormously interested in playing the blame game, but it certainly is worth noting that, after the way the Democrats have been rolled and excluded from all Capital Hill action over the last few years, a lot more would have been needed to persuade them that the Republicans meant to do serious bipartisan business and could be trusted at it.
Desperately offering concessions when you're way behind on points, and when you have zero track record of cooperative behavior in the past few years, is not the best way to test bipartisan good faith. So there is no lesson from the Bush follies that responsible bipartisan measures to address the fiscal gap have no chance. The lesson, rather, is that scorched-earth partisanship is a political dead end. Let's hope that the next generation of Republican leaders - since the current generation is lost beyond redemption - is listening.

Monday, March 14, 2005

At least (for a change) they aren't being actively harmful

Astonishingly - mirabile dictu - George Will has a good column today, laughing at the Congressional jackasses who have decided to hold hearings about the baseball steroids controversy.
The hearing is being held by the House's Government Reform Committee, formerly known as the Government Operations Committee. The rationale, apparently, is that it is about Educating America's Children, which apparently is a sub-category of government reform and operations. "Philip Schiliro, chief of staff for the committee's Democrats, says: 'If Sammy Sosa hit 60 home runs three times without being on steroids, kids should know that. That's a great message for kids.'" So there you have it, I guess.
Not to make light of the steroids issue, though I see it mainly as an issue of players cheating against other players and only secondarily as detrimental to fans, but I have also been amused by the Congressional blowhards who have been telling baseball that "if you don't clean it up, we will." And once they are done with that I suppose it will be time for them to tackle the Michael Jackson issue. But ethics rules for the House itself remain off-limits.

Friday, March 11, 2005

Tax Policy Colloquium - Kyle Logue on "The New Market for Tax Insurance"

Horrendous tragedies gradually recede, as they have to if you want to go on living, and things begin to return to normal. Yesterday's Tax Policy Colloquium, my fifth since a string of about 250 sessions (counting AM and PM) over 10 years with David Bradford came to an end, was easier than it's been, although certainly a heavy cloud still hangs over it. It has begun to feel permissible and feasible to laugh again.
Yesterday's paper by Kyle Logue of Michigan Law School (visiting at Virginia), available here, discusses the recent, apparently very small, trend of companies buying insurance against losing on a given big-money tax issue. The market is small because insurers can't easily make the law of large numbers work for them, as with car insurance, so instead it amounts to betting that their tax-expert underwriters are setting the odds right. In other words, the insurers are like bookies who don't have matching bets on both sides (the IRS hasn't gone to them to bet on its side of the over-under). But the issues are interesting, extending, for example, to why we might not (if we would not) want to let criminals insure against the sanctions they would face if caught. The question is not as obvious as it sounds (e.g., insurance doesn't lower expected value), and you can learn a lot, concerning how to think about more realistic issues, from identifying the conditions under which such insurance would be fine, even if you agree that those conditions do not actually hold.
Other places where Logue has presented this paper apparently focused on the fairly predictable question of, gee, isn't this just a trick by corporate tax shelter promoters to increase their sales and reduce compliance? The answer seems to be no, although one could imagine conditions where that would be the case. We try to take a more unpredictable slant at our colloquium, also one more focused on fundamentals, an approach that owes a lot to David Bradford but that is now engrained enough here to continue without him. So we focused on why the tax insurance market remains small, how tax insurance relates to the broader problem of legal ambiguity, how risk aversion and deterrence are related, whether Logue is right to emphasize the distinction between merits risk (will I win if audited?) and detection risk (will the IRS spot the issue?), and how the IRS should price advance rulings. On merits risk versus detection risk, we seem to have persuaded Logue he was wrong to focus on it, but then to have persuaded ourselves (and perhaps him) that it might be a useful distinction after all, though for different reasons than the paper suggested. Not to be mysterious about all this here; I just don't want to make this post too long and detailed.
I say "we" because actually this time I didn't talk much. Practitioner Ed Kleinbard and economist Jason Furman did most of the heavy lifting. As these sessions have gone on over the years, I have been aiming for the same transition that Stephan Marbury is supposed to be trying with the Knicks: less scoring, more playmaking. I hope I am being more successful than he is.

Friday, March 04, 2005

You reap what you sow

From the "War Room" at
"Although Federal Reserve Chairman Alan Greenspan frequently spouts the Republican party line, he still gets the Oracle of Delphi treatment from members of Congress and the mainstream media. Greenspan has gravitas like most of us have breakfast, and when he pronounces judgment on something -- the economy, unemployment, Social Security -- his views are treated more often than not as the indisputable truth from on high.
"Is that starting to change? It's hard not to think so after reading what Harry Reid had to say about the Fed chairman yesterday. Appearing on CNN, Reid -- who is usually a killing-them-with-kindness kind of guy -- called Greenspan 'one of the biggest political hacks we have in Washington.'"
UPDATE: I guess I should add that I don't object to what Greenspan said, since I also favor a consumption tax, albeit preferably as a replacement to the income tax and with probably much greater progressivity than he prefers. But there certainly is no reason why either his position or his talents (admittedly significant, it seems, in terms of sensing macroeconomic trends) would lead his view on this to have any special weight. And he really has undermined himself with his increasingly clear partisan and ideological set of preferences, which I think he tries to hide behind the mask of the great Oz.
As a practical matter, Paul Krugman probably deserves credit (or blame) as the person who has licensed politicians such as Harry Reid to start attacking Greenspan as a partisan hack. And so long as these attacks are on Greenspan's broader political ruminations and interventions, not on his running Fed policy independently of direct political control, there's nothing wrong with it. A lesson to Greenspan and to future Fed chiefs that you should watch your partisan interventions if you want to preserve your reputation and independence would be very much in order.

Thursday, March 03, 2005

One-trick pony?

I suppose there is a certain fascination to watching a slow-motion train wreck, and all the more so if it is just a movie so no one is actually getting killed. I am starting to think this is a good metaphor for the Bush Administration's Social Security campaign.
As the polls keep showing Bush heading due south on this issue at an increasing clip, he just pours more and more coal into the boiler (if I may continue the metaphor). His redoubled barnstorming tour, 60 rallies in 60 days, now includes Cheney (why don't I think the Democrats are trembling over this?) as well as the rapidly melting Treasury Secretary Snow.
Bush must be thinking: why not. He has never lost a single U.S. domestic political fight of any significance, so why not keep going with the tried and true, especially with fellow zealots telling him that this will be a big-time legacy, will eviscerate the Democrats forever, and so forth.
As someone noted in some other blog somewhere (I would attribute if I remembered where), the guy is basically a one-trick pony. All he knows how to do is make big gambles and pull out all the stakes trying to pull them off. Ex-alcoholics are prone to risky behavior, I gather, although in this case I assume he is being urged on by various non-ex-alcoholic advisors.
One reason Bush's tactical approach may be bad for him over the long run is that if you keep on slamming down your chips and doubling your bets, at some point you are likely to lose, simply by the law of averages.
But another aspect of his problem comes to mind as well. I am reluctant to mention the name Hitler here, because, as much as I despise Bush, I recognize that the comparison is out of line. But I mean it as a typology of tactical approaches, not as a moral comparison. One could favor super-aggressive tactics and be a good guy, I suppose, although I tend to think it is associated with a bullying temperament that probably correlates with being vile.
Anyway, what I mean is this. Hitler just kept on bulling forward, making big aggressive moves, daring others to stand up to him rather than back down, etc. In a way this is how Bush does politics.
This approach can lead to stunning successes, as it did for Hitler through his run of astonishing victories from his taking over Germany through the Sudetenland and right through 1940. But while the unexpected (because unusual) boldness and daring of this approach can lead to stunning successes, it has a couple of problems. First, it is not always the optimal approach. One-trick ponies can't adapt to other tactics that may be more suited to a given problem. Second, people start to catch on to the bully, and it affects their reactions. Once enough of them realize the degree to which you are aggressive and insatiable, they may start treating you differently, to your detriment. Indeed, the earlier surprise factor may have been the main reason it ever worked. Sticking to 2005, since the historical analogy is clear enough, Democrats who Bush needs this time have learned that you can't make deals with him.
Anyway, the fact that Bush has been so successful politically so far does not rule out his experiencing really big political failures from hereon in. Indeed, the same tactics and qualities that brought him the successes may also start to drag him down. Although the downside for him is merely political failure, not a bullet in a bunker.

Tuesday, March 01, 2005

And on a much lighter note ...

... I avoided watching the Academy Awards the other night, less on principle than because I find the ceremony, and many of the films that typically are up for consideration, both boring and stupid. Plus, if you have skipped most of them, it's even harder to motivate any interest.
But this doesn't mean one can't check out who wins the awards, especially since I had seen two of the main candidates: Million Dollar Baby and Sideways. I was glad to see Eastwood and Million Dollar Baby do so well. I liked this film when I saw it, although I would call it good but not great and perhaps a bit on the stereotyped side. But it has lingered on my palate quite well (to sound like one of the characters in Sideways), whereas some movies I start to forget even as I am walking out of the theater. Likewise, Sideways, though a bit implausible in how well the two loser guys seemed to be doing, was quite enjoyable and pretty good, which these days is high praise.
(Presumably, the reason alternative music is artistically doing so much better these days than independent film is that the production cost and cash stakes are so much lower.)
I don't join the number of those who complain about Scorcese losing out again, even though his films from the 1970s through the Raging Bull/King of Comedy/After Hours era are among my absolute favorites. Some of his past best-director losses (e.g., to Kevin Costner) were ludicrous, but for the most part he just doesn't seem to make interesting films any more, and thus for many years I have been staying away.

David Bradford on Social Security reform

On this day when I am trying to serve David Bradford's memory via the WSJ piece that I mentioned in my previous post, I thought it might make sense to give his views on Social Security reform, which I know pretty well because we frequently discussed these issues.
David's biggest concern about U.S. fiscal policy, although it wasn't the main focus of his writing, was the fiscal gap. He was beginning to worry about the nightmare scenario of a capital markets meltdown with hyper-inflation and the like, but by far his main concern (a bigger issue to him than to me) was future generations, whom he felt we were treating unfairly. For this reason, he thought it vitally important to slow down entitlements growth and increase national saving.
Although he called himself a Republican (I told him he was a Rockefeller Republican), David actually liked the Social Security system the way it is, apart from the generational transfer, lack of pre-funding, and likely adverse effect on national saving. That sounds like a lot of objections, but what I mean to emphasize is that he liked the basic structure of offering people a mandatory fixed real life annuity, which he thought all sane people would want in their portfolios. Thus, he didn't think much of the privatization (oops, sorry, surely I meant to say "personal accounts") idea of replacing this system with another set of debt-financed risky investments that people can make on their own anyway.
Although he refused to accept quite so negative a view of the Bush Administration as that which I generally urged on him, feeling that it was still politics as usual and that the Democrats would comparably have blown up the fiscal gap, he did consider the Administration's current push on Social Security a complete waste of time at best, and possibly another disaster in the making like Medicare prescription drugs. He would have liked it, however, if all the rhetoric about solving problems now and providing for the future had actually been linked to a policy proposal that pointed in that direction.
One last point about David and the Administration's fiscal policy is that he didn't think they actually passed tax cuts in 2001 through 2003. To him these were simply tax shifts, to be offset later, given the fiscal gap, either by tax increases or by effectively retroactive reductions in transfers that might look different from tax increases in form but would be similar in substance.