"Joe Miller Proposes Economically Impossible State Takeover Of Medicare And Social Security"
Much like Kentucky GOP Senate candidate Rand Paul was forced to stop talking about his longstanding opposition to the ban on whites-only lunch counters after this neanderthanish position threatened his poll numbers, the GOP’s likely standard bearer in Alaska, Joe Miller, is now trying to clarify his radical statement that Social Security and Medicare are unconstitutional. In an interview with Fox News, Miller tried to reassure viewers that he believes Medicare and Social Security are a “contract that we have with our seniors,” but he then outlined a plan that would bring both programs to a slow and painful end:
VAN SUSTEREN: All right, in the event that you are the candidate for the general election, what’s the story on Social Security and Medicare? Are you for it or against it? […]
MILLER: If you look at, for example, the inlays coming in to Social Security, as of April this year, they’re outstripped by the payments. That’s the first time in a while that that’s happened. It’s projected to continue for several years.
And if we don’t get a grip on that now, if we don’t come up with solutions, you know, whether it be privatization, personalization or some other solution, which, frankly, you know, it’s our preference that that be a transferred power to the states. That’s really what the constitutional basis of our platform has been, that we need to get back to transferring many of the powers of the federal government to the states. We believe that that’s what the Tenth Amendment provides.
First of all, Miller’s suggestion that privatizing Social Security could help balance the budget is flat wrong. Privatization imposes significant new risks on seniors, while creating new administrative costs and forcing benefit reductions. Yet despite being a riskier, less beneficial program for seniors, it also will cost more money than the present system.
Miller’s plan to transfer programs like Medicare and Social Security to the states is even more radical. Indeed, it is an economically impossible plan.
Under our current system, Americans can live in any state they choose. An American who begins their career in Ohio, moves to Virginia to accept a better job offer, and then retires in Florida pays the same federal taxes regardless of their residence. These taxes fund programs such as Medicare and Social Security.
Now imagine that we lived in Joe Miller’s America, and that each state was responsible for setting up its own retirement system. Under this system, the person described above would pay Ohio taxes while they worked in Ohio, Virginia taxes while they lived in Virginia, and would draw benefits from the state of Florida during their retirement. The state which benefited from their taxes would not be the same state that was required to fund their retirement.
States like Florida, which attract an unusually large number of retirees, would simply collapse under the weight of their retirement programs. Florida would be forced to jack up taxes on its own workers to pay for the influx of retirees, but these higher taxes would drive workers out of the state, forcing Florida to jack up taxes even more. Eventually, this “death spiral” would lead Florida to insolvency, leaving its senior residents without any benefits whatsoever. Nor could Florida prevent this death spiral by simply limiting retirement benefits to seniors who spent their working career in Florida — the Constitution forbids states from denying benefits to their residents based on length of residence.
Simply put, Joe Miller’s grasp of economics is even worse than his grasp of constitutional law. His “tenther” plan to turn seniors’ fates over to the states cannot work so long as Americans are allowed to live wherever they choose.