In Newt Gingrich's Real Change, I read "Chapter Twelve: Real Change for Social Security" (which Newt wrote with Peter Ferrara of the Institute for Policy Innovation); "Chapter Thirteen: American History Requires Real Change in the Judiciary"; and "Appendix 4: D-Day Radio Prayer of President Franklin Delano Roosevelt, June 6, 1944".
Chapter 12, Newt defends allowing people to invest part of their Social
Security payroll tax in stocks and bonds that would be approved by the
U.S. Treasury Department. Employers would contribute to this
account as well, and, if the return falls short of what the government
promises people in terms of Social Security, then the government would
pay them the difference. According to Newt, this would take care of the
coming insolvency of the Social Security system, as well as the problem
of the government raiding the Social Security trust fund to spend money
on other projects----for a good percentage of that money under the
system that Newt supports would be in the hands of the people, not the
But there is a problem that people have identified in this sort of proposal. People's
payroll taxes are going to the current recipients of Social Security.
If people are allowed to invest part of their payroll tax rather than
contributing it to the Social Security trust fund, then there will be a
shortage in the trust fund, and the government will have to find the
money to pay current recipients of Social Security at the present level.
Newt actually addresses this problem.
First, he says that the amount that we allow people to invest should
start at a manageable level and then go up. That means that we should
not start out allowing people to invest a significantly large chunk of
their payroll tax, but we should start out at a more manageable rate.
Second, Newt states that the economy will grow as people invest part of
their payroll tax into the stock market, and that will increase revenue
and make up for the lost money in the Social Security trust fund.
Third, Newt says that the government should cut spending in other areas
so there will be money for the Social Security trust fund.
people think that the current Social Security system is in danger of
becoming insolvent, and that the trend of each Social Security
benefactor being supported by fewer and fewer taxpayers will result in
dramatically higher payroll taxes. Others don't think that the situation is that bad.
As I read Newt, I can see how one could have a dismal view of the
future of Social Security, since payroll taxes have gone up over the
Is Newt's solution the way to go, however? I
fear that people could lose their money through bad investments or the
stock market crashing, and stock market crashes do occur, as we saw in
2008. The government would then have to step in and pay people the
guaranteed amount of Social Security, with a possibly depleted Social
Security trust fund.
2. Newt's chapter on the judiciary was basically about how courts are attacking religion in the public square. But there were some
interesting things in this chapter. For one, Newt talks about how the
Federalists in America's early days supported a strong judiciary,
whereas the Democratic-Republicans feared judicial tyranny. Second,
Newt discusses how the current system actually encourages people to sue
public schools and the public square to remove religious items from
their midst. Essentially, the rule is that the defendant has to pay the
legal fees of the plaintiff, if the plaintiff wins (even partially).
acknowledges that this sort of rule is appropriate for civil rights
cases, especially when there are people who cannot afford to launch
civil rights lawsuits when they are the victims of discrimination. But
Newt does not deem it appropriate for Establishment Clause cases.
Newt supports the Public Expression of Religion Act (which I do not
think passed), which does not require defendants to pay the legal fees
of plaintiffs in Establishment Clause lawsuits. The court would still
be able to order the removal of religious items from the public square,
but the defendant would no longer have to pay the legal fees of the
Is this a reasonable policy? It could discourage
people from initiating Establishment Clause lawsuits, and Newt may
actually like that, since he says on page 172 that people in a democracy
may have to live with things that they don't like (presumably religion
in the public square). On the other hand, I have a hard time imagining
the ACLU giving up just because the defendants would not pay the
plaintiff's legal fees.
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