The Second Coming Of Progressivism

Nearly a century ago, in what is known as the Age of Progressivism, the United States Government underwent a seismic political shift via a series of constitutional amendments. Alas, big-government was born.

A systemic extension of governmental power with the aim of eliminating the evils brought about by the industrial revolution was, and is, the preeminent theme of the American Progressive movement. In the early 20th Century, leaders of the Progressive movement were vocal in their calls for state interference in the social and economic dealings of the nation, laying the groundwork for the eventual rise of an American “welfare-state”, a term they used freely and openly. In 1913, two amendments to the U.S. Constitution, ratified by a Progressive Congress, would deal a near fatal blow to the maxims of American government.

The 16th Amendment arguably represents the most profound departure in American history from the vision of the Founding Fathers, as it grants the federal government the power to tax its citizenry “without apportionment among the several States and without regard to any census or enumeration.” It is the 17th Amendment, however, and its subsequent effects, that bear the most relevance to the controversies and tensions of today.

The 17th Amendment, ratified on April 8th, 1913, established the direct election of United States Senators through statewide popular vote. The original premise of the Constitution, and of the republican form of government it encompassed, was based upon a complex system of layered checks and balances. Most people are familiar with this “separation of powers” philosophy as it pertains to the inner-workings of America’s federal government, i.e., the executive, the legislative and the judicial branches. What many forget, however, and what the Founding Fathers considered vital to the success of the new government, was that the individual states were to hold the majority of discretion and influence in the governing of their respective citizenry. As stated in the 10th and final article of America’s Bill of Rights: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” To ensure the general sovereignty of the states, and to safeguard state-governments from federal usurpation, the Founders established in article 1, section 3 of the Constitution, that the “Senate of the United States shall be composed of two Senators from each State, chosen by the legislature thereof,” therefore ensuring a voice for the states in the affairs of the federal government. States would be represented in the Senate via legislative election, the people of those states would be directly represented, via popular mandate, in the House of Representatives, and the federal government would find its voice in a “President”, whose mode of election would be left to the respective discretion of the individual states. This would ensure a balance of power within and between the state and federal governments, a factor the Founders considered absolutely essential to the perpetuity of the union of the states.

The 1913 ratification of the 16th and 17th Amendments marked the apex of American Progressivism. The former established federal hegemony with regard to the American economy, the latter severely limited the ability of the states to defend against attacks upon their sovereignty.

So here we are, two years shy of one hundred years hence, having recently witnessed the second coming of Progressivism in the guise of healthcare reform. Whether or not the Obama Administration will prove as successful as its Progressive forefathers is a question yet to be answered. The states, stripped of their power by the 17th Amendment, are presently fighting back with their final means of recourse – that of the U.S. judiciary.

Because Obama-Care exceeds its constitutional mandate by forcing states into spending billions of dollars rearranging their current healthcare systems, irrespective of their ability to afford it, twenty of these states have opted to challenge the law in court. Had the 17th Amendment never been passed, one is tempted to wonder whether or not a Senate beholden to the interests of its states rather than performing, as it now does, as an arm of the federal government, would ever have passed Obama-Care. The same can be pondered of the Dodd reform bill and the multiple “stimulus” packages, all of which will ultimately prove detrimental to the interests of the states.

Of course, history is replete with “what ifs?” and while a repeal of the 17th Amendment is certainly not unthinkable and would surely represent a welcome revival of the system of checks and balance, such a repeal would also represent, at least for the time being, a highly unlikely scenario. One thing, however, is certain. The slow erosion of the federalist system began in 1913. Nearly a century later, in 2010, the chickens have come home to roost. The second coming of Progressivism is upon us. How the states react in the upcoming years will ultimately decide their respective relevance, or lack thereof, in the future of American government.

Socially Responsible Security

Socially Responsible Security


At its inception, Social Security was intended to act as a “safety-net” program for the elderly and disabled of America. In the 75 years hence, this program has helped to protect millions of American workers from poverty in their senior years and has provided countless others with a comfortable transition into retirement. If left on its present course, however, Social Security will no longer remain a self-sustained enterprise and will prove to be a burden rather than a blessing on society. Social Security currently represents over one-fifth of all government spending, the largest component of the federal budget. Because the program paid out more money in 2010 than it collected in taxes, and because the system will be running permanent deficits by fiscal year 2017, a pragmatic reform of Social Security is imperative if we wish for our children and our grandchildren to enjoy the same peace-of-mind in retirement as that of our parents and our grandparents. The impending insolvency of Social Security, if not soon addressed, will prove itself irreparable. The system is at a crossroads: Inaction will destroy it by default, while intelligent reform may usher it into the 21st Century, increasing its efficiency in the process.

Due to several factors including demographics, life expectancy and endemic government greed, Social Security, as it now exists, is unlikely to survive the present decade. What was originally intended to be an insurance program for American retirees, without adequate reformation, will inexorably morph into a debt-laden entitlement program costing American tax-payers $100 billion per year beginning in 2017, soon to be followed by $200 billion and then $300 billion annual deficits. By the year 2070, when the toddlers of today will be retiring, Social Security will have accumulated a staggering $27 trillion in debt. Of course, to consider these numbers is futile as the system will have ceased to exist long before reaching that point.

It is an incontrovertible truth that the baby-boomer generation, presently transitioning into the receiving end of the Social Security program, far exceeds in numbers what the contributing generation can afford. Once upon a time, the federal government had set up a trust-fund for such situations, subsidized by the surplus of preceding years. This trust-fund, however, was bankrupted long ago, replaced with government “IOU’s” issued by wily politicians who chose to “borrow” from these funds in order to pay for arbitrarily determined pet-projects and to aid in concealing politically damaging budget deficits. It is important to note that workers who are paying Social Security taxes today are not contributing to their own retirements; rather they are paying for the retirees who are presently collecting benefits. Simple math therefore reveals that the system is fundamentally broken. The quick, albeit temporary fix preferred by many demagogues encompasses an increase in payroll taxes and cuts in beneficiary services. These measures, however, will merely postpone the day of reckoning, offering what amounts to a band aid as a remedy for a mortal wound. The baby-boomers deserve to reap the benefits of what they have fairly invested into the Social Security program throughout their working lives, and future generations of Americans should endeavor to ensure the perpetuity of this worthy social program. But neither of these goals can be realized in a morally responsible manner without a pragmatic reform of the system. As Social Security now stands, it is inevitable that some future generation, be it our children, our grandchildren or our great-grandchildren, will bear the burden of our excesses. This scenario runs contrary to the tenets of Americanism and may be avoided by a three step reformation process.

First and foremost, all individuals 55 and older will remain in the present system. These people will be better served by the current program as the limited time they have left as contributors will negate the benefits of transition. All individuals 54 and younger will have their taxes transferred into private sector accounts which will be managed and guaranteed by Social Security. A worker earning the average wage and yielding the average dividends between the years 1965 and 2010 would have reaped a 75% increase in benefits had he or she invested their payroll taxes into a low-risk mutual fund account rather than simply transferring it into the hands of Washington bureaucrats. It is worth noting that these significant gains represent a worst case scenario, as the year 2010 is marked by an anemic economy. Under the plan I am proposing, all future beneficiaries of Social Security will be guaranteed the benefits that exist in the present system until such a time – approximately 25 years – when the money they have invested begins to yield greater returns than that of the benefits now offered. At this point, retirees will be entitled to 85% of all earnings above and beyond their guaranteed benefits. The remaining 15% will be transferred into a new “trust-fund” account that, by law, will be protected from government borrowing. The approximate 25 year transition period will be utilized to convert the Social-Security system into a veritable insurance program in which American workers will ultimately be investing into their own retirement accounts as opposed to merely paying taxes to compensate the benefits of others. During this transition period, an additional source of revenue will be required to meet the obligations of the baby-boomers. It is imperative that this money be raised without further indebting the system. This can be achieved through a gradual increase in the benefit eligibility age. Just as the benefits guaranteed by Social Security are adjusted according to inflation, so too would prudence dictate that retirement age be adjusted according to increases in life expectancy. A one month per year extension of the present eligibility age, over the course of 24 years, would result in a 2 year increase by 2035, at which point the average life expectancy of Americans will be nearly 15 years higher than that of 1935, when Social Security was born. The increased revenue created by this extension will enable the children of the baby-boomers to pay for their elders’ retirement while simultaneously contributing to their own independence in retirement. In addition, during this transition period wealthy Americans will receive a lower percentage of benefits than that of their peers in need, further expediting the program’s ability to fulfill its prior obligations.

This reformation of Social Security will result in a truly permanent safety-net that will reap more benefits for future generations and strengthen the American economy. United States citizens are loath to benefit themselves at the expense of their children and their grandchildren; this system will allow all Americans to invest in their own security and to do so in a manner that will benefit the economy as a whole. It will exclude the federal government from manipulating and “borrowing” from what is rightfully the property of individuals, reestablishing the proper relationship between the American people and their government. The alternative is increased taxes and depleted benefits, followed by the inevitable collapse of the system. There is a truth in Social Security that applies to most aspects of life: Government is not the solution - it’s the problem. The choice is clear: Endeavor to reform a broken system now, or transfer the burden to our children.