Thomas Sowell

One of a surprising number of old, well-established politicians being challenged in this year's election by some unknown newcomer is Senator Russ Feingold in Wisconsin. In a recent debate between Senator Feingold and his new challenger, businessman Ron Johnson, the difference between the old pol and new guy on the block stood out.

Feingold was clearly smoother and more glib-- and his arguments may have sounded more plausible to those unfamiliar with the facts. But what Ron Johnson said would have resonated better with those who did know the facts. How many people are in which category may determine the outcome of this election.

Senator Feingold wants Social Security kept pretty much the way it is. That would mean that there is not enough money to pay what is owed to the baby boomers who retire. Ron Johnson wants to keep Social Security as is for those who have already retired and for those approaching retirement years, but would not make it mandatory for younger people to join, if they don't want to.

Russ Feingold was on it in an instant, accusing his opponent of denying the benefits of Social Security to young workers and forcing them into the risky stock market for their retirement.

Although Senator Feingold cast himself in the role of a defender of Social Security, Ron Johnson pointed out that members of Congress like Senator Feingold had in fact undermined Social Security financially, by spending its money on other things.

This is in fact the dirty little secret about Social Security. In all the years when the money coming into Social Security exceeded the money being paid out in pensions, Congress simply spent the difference on everything from junkets to earmarks.

The fiction of a Social Security "trust fund" was maintained by giving government bonds in exchange for the money taken. But these bonds changed nothing, since they were just claims on future taxpayers.

If these bonds had never been printed, future taxpayers would have been on the hook for future shortfalls. Neither the government nor anyone else can spend and save the same money.

But the question is: How well did Johnson explain it to people who don't know the facts? That is also something that could determine the outcome of this election.

As for the dangers of the stock market, it would take a very poor index mutual fund to do worse than Social Security, even if the investor retires when the stock market is down.

After Ron Johnson referred to having recently read the Constitution, Russ Feingold pounced and depicted that as showing that his opponent hadn't read the Constitution before. It was the kind of political trick that may impress people who don't pay close attention.


Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

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