That’s what Democratic Presidential Candidate Barack Obama is telling us.  We’re too stupid to manage our own fiscal affairs, so we need Know Betters in Big Government to do for us.

He’s using this argument on Social Security, in particular.  As you know, Social Security will be out of money in just a few short years, dependent solely on cash flow—incoming payroll tax revenue from current workers—to pay current retirees, and that cash flow is only sufficient (barely) to pay around 75% of the current benefits.  That’s how well the Know Betters in Big Government have done for us so far.

Obama’s solution? He promises to fight the privatization of Medicare and Social Security:

We’re going to keep the promise of Social Security by taking the responsible steps to strengthen it.  And that’s not by turning it over to Wall Street.

There are two insults to our intelligence here.  One is that he actually thinks we believe that any plan to privatize either of these does so by “turning them over to Wall Street.”  The other is, as I said, that we cannot manage our own affairs—we must rely on Know Betters to take care of us.

Now, before going further into Obama’s contempt for our intelligence, it’s useful to summarize the actual plans put forward by the Republican ticket and thereby expose the dishonestly presented red herring that is Obama’s straw man.  With regard to Social Security itself, Romney/Ryan are looking to gradually increase the retirement age and to slow the growth in benefits for higher income future retirees—the changes would not affect current or medium-term future (those already 55 years old) retirees.

For the Medicare aspect of the Social Security system, they propose fixed payments to future retirees (i.e., those younger than 55; there would be no change here, either, for current or medium-term future retirees), initially set equal to current Medicare payouts.  These folks then could use these funds to shop around for their own health insurance coverage and keep the money they save if they buy a policy that costs less than these payments.  The resulting competition also will bring down the cost of such coverage and improve the quality of the policies offered (magnifying future savings) since these folks, now with skin in the game, will shop aggressively.  Or they could stay in the existing Medicare program, which would remain unchanged.

There’s very little privatization here; certainly, there’s not enough to suit me.

But why does Obama object even to this little bit?  After all, private accounts (to take an earlier suggestion from Republican Vice Presidential Candidate Paul Ryan, but which is not in the proposal actually on the table today), created from a diversion of one-third of a worker’s current payroll tax payment, would let these workers earn a greater rate of return on those tax payments than Social Security provides them.  This would achieve a number of things: for one, it would give the workers a considerable measure of responsibility for their own futures, and this would let them shop around for the best investments—driving costs down through competition.  For another, it would let those workers set aside money for their own future (and ultimately for their own families’ future) and not have it all diverted for the current retirement of utter strangers.  For a third, it would allow these workers to satisfy their own moral obligation to “seek their own happiness” and to not be burdens on strangers, except temporarily and in the most dire conditions.

Opponents—Obama—object to this individual responsibility and freedom.   He says private accounts would make then-retirees dependent on volatile stock and bond markets.  And the move to private accounts would incur large transition costs, because tax payments diverted to the accounts are needed to pay benefits for current retirees.

The last is just a crude sophistry.  Transition costs are, by their nature, temporary—they are not permanent like, for instance, the cost of a failed, bankrupt social security system.  Moreover, the transition costs, while large (every dishonesty has a measure of truth in it, in order to achieve an appearance of plausibility) actually are easily borne.  A flatter (I say flat) and broader-based income tax system will bring in more revenue for the government through that broader base, fewer (I say no) deductions, credits, and the like, and through sharply increased economic activity which will generate increased income to be taxed.  This excess [sic] revenue can be used both to cover the transition costs and to pay down the debt (and exclusively to pay that debt once the transition is complete).

But more than this, a population that isn’t beholden to—isn’t dependent on—the incumbents aren’t a power base for those incumbents.  Obama’s Social Security and Medicare plans are just crass bread and circus vote pandering.  And they won’t solve the impending failures of Social Security and Medicare.

But Obama thinks we’re just too stupid.  Too stupid to manage our own affairs and too stupid to see through his empty rhetoric to the lie underneath.