Maybe The Republicans Plan Would Work Better
President Obama has made a claim that the Republicans, through Representative Ryan’s Budget, are trying to undo the Social Contract the US government has with its seniors and those that use Medicare. On its surface, this claim seems to have some merit, since Social Security and Medicare have become an entitlement to which many Americans have come to count upon for day-to-day living. However, when one examines the genesis of the Social Contract, it becomes clear that any action taken which will provide a segment of the population with the resources it needs to bring the disadvantaged segment of the population up to the standard of the rest of the population.
By most definitions, a social contract is an agreement by a population to be governed and an expectation for that government to provide for the life, liberty, security and justice within the agreed limitations of the society. In return, the governed individuals willingly give up some of their rights with respect to life, liberty, security and justice. While this may be a simplistic view of a social contract, it does provide an adequate point from which to examine President Obama’s claim and the Republican intent towards the social contract.
President Obama’s position of wanting to keep Social Security and Medicare as the preeminent components of the safety net for our elderly and poor is admirable, though short-sighted. There is no doubt that Social Security and Medicare, as currently funded and run, will become insolvent within a decade or two. To argue that no change is required implies that a future correction in funding will come from either more borrowing or higher taxes on those that are in the workforce. No gimmicks or creative bookkeeping can overcome the facts of a greater elderly population and a smaller younger population providing funding to these programs. As President Obama argues for no changes to these two entitlement programs he tacitly ignores the theories of social contract while demanding that the social contract not change. By default, if a program will become unavailable to a segment of the population, then the social contract is broken. Therefore, President Obama’s position of maintaining the status quo on entitlement programs is the position which will deny seniors their social security and the poor their Medicare. This logical outcome of President Obama’s position violates the social contract which he holds so dear.
On the other side of the issue is Representative Ryan’s budget which doesn’t end Social Security and Medicare programs, but rather restructures them in order to maintain the fiscal viability of both programs. Taken in totality of the impact of the Ryan budget upon the economic engine of the United States, it seems very plausible that Social Security and Medicare would become more robust for those not yet ready to retire and those not able to provide medical support to their families. As such, the impact of the Ryan budget would meet the requirement of providing Social Security and Medicare for the entire society and not just the elderly and poor. Therefore, using the social contract theory, Representative Ryan’s budgetary plan better meets the social contract with American society than the plan of President Obama.
The observation that President Obama, the Liberal Democrat, has a plan that does not meet the Social Contract as well as Representative Ryan’s Budget seems counter-intuitive. However, Social Contract theory is clear on the issue of providing for the society as a whole. If the greater good is met by a decreasing of an entitlement so that more of the society can take part of the entitlement, and by that decrease in the entitlement improves society as a whole, then a decrease is mandated until all in society are equally served. It seems difficult to dismiss that Representative Ryan’s Budget would not create the aforementioned conditions. On the contrary, a basic understanding of Austrian model economics would predict a growth in revenues, an increase in the standard of living, and a lowering of borrowing rates.
To date, the argument shall continue, along with the political misinformation provided by both sides of the debate. What is important to note is that a discussion of Social Contract must be looked at in the short and long view. In the short view, Social Security and Medicare must change in order to meet future obligations. In the long view, no change to these two programs, along with additional borrowing by the US Government, will lead to the ending of those programs through either default of debt or radical debt reduction measures. That said, the Social Contract that we Americans now expect, which is different from when the Constitution was adopted, can only be kept by redefining the entitlements and reducing the overall debt of the nation. Hence, the Republican plan is more likely to maintain the 20th century social contract between Americans and the American government.
