Changes in life expectancy are certain; what they will be is unclear. Since 1900, life expectancy at birth has increased 30 years (from 47 to 77), mostly during the century's first half, largely from reducing infant mortality by conquering infectious diseases. But since 1950, the most dramatic gain was in life expectancy at 65. How much more progress can be made there? How many people who live longer will choose to work longer? What unknowable public health developments will intervene? For example, if government succeeds in getting dramatic declines in smoking, some anticipated Social Security savings -- from the early deaths of millions of smokers -- will vanish.
All these are just the known unknowns; there surely are, as Donald Rumsfeld says, unknown unknowns. Which means that today we may be less distant from the enacting of Social Security (1935) than we are from a real solvency crisis in the system.
If Social Security is in crisis, what word can describe the condition of Medicare and Medicaid? Thirteen months ago this administration improvidently enacted a Medicare prescription drug entitlement that by itself adds to Medicare's solvency crisis a sum much larger than the entire Social Security system's shortfall. Given the life-enhancing dynamism of modern pharmacology, no one knows what the menu of prescription drugs will be even 10 years from now.
And last year America passed an ominous milestone: Spending by the 50 states on Medicaid exceeded spending by the states on elementary and secondary education. The $4.9 billion gap will widen.
One reason for reforming Social Security is that it is not in crisis compared to Medicare-Medicaid. But the best reasons rise from the philosophy of freedom:
Voluntary personal accounts will allow competing fund managers, rather than a government monopoly on income transfers from workers to retirees, to allocate a large pool of money. This will enhance the economic dynamism conducive to an open society. Personal accounts will respect individuals' autonomy and competence, and will narrow the wealth gap by facilitating the accumulation of wealth -- bequeathable wealth -- by persons of modest incomes.
It used to be the political left that had an exaggerated confidence in the transparency of the future. The left believed -- because Marx had deciphered history's unfolding, or because the social sciences had new analytic tools -- that the future had become knowable. Hence government could boldly act, sure of society's predictable trajectory. Today some conservatives, beginning their admirable project of Social Security reform, lack the conservative virtue of sobriety about the limits of prophecy. The sober truth is that the philosophic reasons for reforming Social Security are more compelling than the fiscal reasons.