When Texas Governor Rick Perry in the Republican debate at the President Reagan Library described Social Security as a “Ponzi Scheme”; Perry hoped the media would hyper-ventilate and scream that his political career was over. Back in 1982, Democratic Speaker of the House Tip O’Neill legendarily damaged the President’s and the Republican’s popularity by spinning that Reagan’s efforts to return Social Security to solvency was an effort to destroy the program. Perry understands that Social Security still remains popular; but he intends to use as a wedge issue against Democrats the fact that few Americans are willing to pay more taxes make the program solvent and that younger voters believe they will never receive the benefits they are paying for.

The Merriam-Webster Dictionary describes a Ponzi scheme as “an investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.” Social Security began collecting taxes in 1937 and began in 1940 to pay their first benefit recipient, Ida May Fuller. Ms. Fuller worked for three years under the Social Security program before she retired. The Social Security taxes on her salary were $24.75; her initial monthly check was $22.54; and she lived to collect $22,888.92. Essentially, Ms. Fuller earned a spectacular 925% return on her investment.

President Franklin Delano Roosevelt was quoted by his Labor Secretary Francis Perkins as trying to make sure Social Security would not be a swindle to future generations:

“Ah, but this is the same old dole by another name. It is almost dishonest to build up an accumulated deficit for the Congress of the United States to meet in 1980. We can’t see the United States short in 1980 any more than in 1935.”

Prior to the 1970s, the Social Security program was fairly well funded; because it took a highly visible Act of Congress to change the payments. But in 1972 Republican President Richard Nixon increased benefits by 20% and created a formula to automatically adjust Social Security payments by a cost-of-living-adjustment (COLA) tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers. President Jimmy Carter in 1977 more than tripled the Social Security tax on wages; but price inflation continued to drive COLA payments up faster than the taxes on wages.

When President Reagan tried to reinstate the original COLA calculation in 1982 he was pummeled by Democratic Speaker of the House, Tip O’Neill, who famously told the press that trying to change Social Security was the political equivalent of asking for the instant death of touching the “third rail” of an electric train. Republicans lost 26 Congressional seats in the following midterm elections, as the Democrats made preservation of Social Security the centerpiece of their campaign slogan: “It’s not fair … It’s Republican”.

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A year ago, in a blogpost entitled The Great Awakening, I argued that conservatives “should be grateful to Barack Obama, Nancy Pelosi, Harry Reid, and Rahm Emanuel.” After all, I wrote, they had unmasked “the Democratic Party as a conspiracy on the part of a would-be aristocracy of do-gooders hostile to the very idea of self-government in the United States,” and they had done so by making “the tyrannical propensities inherent within the progressive impulse visible to anyone who cares to take notice.” This is a theme to which I have returned repeatedly in a series of posts – some of them linked here, others archived here and here, and the most recent found here – arguing that, with the proper leadership, the Republican Party could seize this occasion and effect a political realignment.

The heart of the matter is simple. What Franklin Delano Roosevelt falsely claimed in 1936 is now demonstrably true: “A small group” of individuals – lead by our current President, his Chief of Staff, the Speaker of the House of Representatives, and the Majority Leader in the United States Senate – really is intent on concentrating “into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor – other people’s lives.” If they wish to effect a realignment, all that the Republicans have to do is to complete the task of unmasking begun by Obama, Pelosi, Reid, and Emanuel and make it clear that they really do intend to repeal Obamacare, to balance the federal budget without enacting permanent tax increases, to roll back the scope and size of the administrative state, and to restore within these United States limited, constitutional government.

They face two great obstacles. First, as I argued last year in my book Soft Despotism, Democracy’s Drift, the administrative state has been growing for almost a century now, and it has become entrenched. Moreover, its growth has been fueled not only by the ambitions of a self-styled progressive elite proclaiming its expertise and its desire to manage our lives for us. It has also been supported by the political psychology to which – the baron de Montesquieu, Jean-Jacques Rousseau, and Alexis de Tocqueville contended – commercial, liberal, democratic societies, such as our own, generally give rise. Put simply, men in liberal democracies tend to fall prey to what these thinkers call inquiétude, and under the influence of this uneasiness – this vague, unfocused fear lacking a defined object – they are apt, especially in times of economic distress, to be willing to trade independence for a promise of security. The Americans whom Tocqueville met in the early 1830s had the resources, institutional and moral, with which to resist this propensity. But we can no longer boast that, in the United States, local self-government is vigorous, private associations do much of what was allocated to government in Europe, the Christian religion provides us with a moral anchor, and marital fidelity and family solidarity afford us a haven from the upheavals that typify life in a dynamic, commercial society.

Second, no one really trusts the Republicans in Congress.

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When they teach American government and the history of the early American republic, political scientists and historians have a puzzle to explain. There is, within the American constitution, no mention of political parties. And yet it is impossible to make sense of American politics in and after the early republic without reference to parties. Moreover, the parties that did emerge in the United States bear only a faint resemblance to the parties that existed in England and on the European continent prior to the American civil war and even less to the parties that exist on the other side of the Atlantic today.

The two puzzles are related. It is true that the Framers of the Constitution had no liking and made no provision for organized political parties, and it is also true that all of the early Presidents made at least a half-hearted attempt to transcend partisanship. It was not until Andrew Jackson that we got our first unequivocally partisan President. It is also true that the partisan divide that emerged in the 1790s was viewed by both sides as something temporary and regrettable. Thomas Jefferson and James Madison formed a party, which in time they called the Republican Party, to counter what they considered a conspiracy on the part of George Washington’s Secretary of the Treasury Alexander Hamilton, and in response he formed a party to counter what he considered a conspiracy on their part. Absent the conspiracy, or in the eventuality of its defeat and disappearance, the American republic’s first partisans expected the parties to wither away.

In this presumption, as Martin van Buren came to realize, they were wrong. Given the separation of powers, it was virtually impossible to govern in the absence of partisan alliances. But the very structure of American government – in which Congressmen are elected by particular constituencies located in particular places and look to that locality for re-election, and in which Senators represent particular states and are no less sensitive to local concerns – subverts partisanship and promotes a species of moderation as well. Only the President sees the Union from the perspective of the whole. When Tip O’Neill remarked that all politics is local, he spoke in a fashion perfectly appropriate to his situation as Speaker of the House of Representatives.

We must, then, view political parties from a double perspective.

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