All Commentary
Friday, November 1, 1996

The Return of Thrift: How the Collapse of the Middle Class Welfare State Will Reawaken Values in America

Longman Offers No Principled Opposition to Wealth Transfers

Mr. Weinkopf is an editorial associate at National Review.

The notion that welfare dependency breeds bad habits, and that the end of welfare will restore good ones, is sound, but unoriginal. What distinguishes Phillip Longman’s rendition of this conservative staple from previous takes is that he applies it not to the underclass, but to the American middle class, which, he reports, is every bit as dependent on sundry benefits as welfare mothers are on food stamps and AFDC. Middle-class entitlements, he argues, will soon bankrupt the federal government, as they already have bankrupted the bourgeois ethic of hard work and thrift.

Longman painstakingly documents the insolvency that awaits Social Security, Medicare, military-retirement and veterans’ benefits, federal pensions, and myriad lesser-known others. The big lie behind these programs is that they have been paid for, in advance, by regular deductions from their beneficiaries’ paychecks. Historically, however, federal-entitlement recipients have collected far more than they have put in, leaving the financial burden to future generations. The debt cycle cannot exist in perpetuity, and the baby boomers’ imminent retirement is sure to break the bank. When that happens, Longman claims, the middle class will have to give up welfare—and all the excesses it permits—cold turkey.

This is good news. But advocates of limited government are sorely mistaken if they think Mr. Longman is an ally. The Return of Thrift offers no principled opposition to wealth transfers per se; Longman merely resents that they are administered inefficiently and benefit mostly members of the middle class. He is in favor of redistributing of wealth as long as it goes to the needy. A reason to expect higher taxes in the next century, which he gladly accepts, is that as the size of the American underclass continues to grow . . . the cost of social programs targeted toward the poor no doubt will escalate dramatically. He never thinks to extend his argument—that the end of welfare will restore self-reliance to the middle class—to the lower rungs of the economic ladder.

Longman’s prescription for thrift is compulsory savings, deducted automatically from paychecks on a fixed, progressive scale. He never considers that the government could reduce its debt or spur individual savings by cutting taxes. Instead, he calls for tax hikes by urging that Congress eliminate loopholes in the tax code, such as deductions for mortgage payments and medical insurance, without proposing other reductions to take their place.

When discussing Medicare reform, Longman favors rationing (he laments that new technology is keeping seniors alive longer than ever before), without even mentioning medical savings accounts, let alone outright privatization. The Return of Thrift is a hard-bound oxymoron, its first twelve chapters chronicling the inherent liabilities of government planning, its final two demanding more. Longman is prescient, however, when he warns that like narcotics, big government can be so addictive that junkies will defy common sense, at their own peril, to get a fix. He’ll have ample time to meditate over the theory in rehab.