The Problem With 'Libertarian Populism' Is That It Isn't Populist

Over the weekend, Tim Carney, one of the leading proponents of "libertarian populism," took issue with my contention that libertarian populists think "middle-class entitlements are unsustainable and must be constrained." He says that claim is unfounded.

So I asked Carney what he thinks about the overall shape of the federal budget, and he told me this:

Uh oh. "Maybe" safety net?

He added that the safety net should be principally left to voluntary organizations and the states, with the federal government as a last resort. This approach has obvious public-finance problems (well, obvious to most people except libertarians): Demand for safety-net programs moves with the business cycle — inversely to tax receipts — so the ability to run a deficit is key to backing them, and the federal government is much better-positioned to do that than states are.

But a slash-the-federal-entitlement-state view also just isn't populist. Federal entitlements protect the masses against problems like unemployment, retirement insecurity, and poverty. Seeking to dismantle them is the opposite of defending mass interests against elites.

You can frame your desire to shrink these programs in terms of a desire to cut relatively regressive taxes like the payroll tax, as Carney does. But the progressivity that is lost by cutting entitlements is far greater than any that is gained by cutting regressive taxes.

Carney then allowed this:

So he then advanced a more limited proposal: (further) means-testing Social Security benefits to finance a payroll tax cut.

What's funny about this idea is that when conservatives propose to add means tests to entitlement programs, liberals usually justify their opposition on the grounds that conservatives intend the means tests to undermine popular support for the programs by turning them into "welfare."

Conservatives generally say that's nonsense. But Carney is being explicit about means-testing as a first, achievable step on the road to a much greater dismantling of the federal entitlement state.

But what is perhaps most amazing about libertarian populists is how they believe their own rhetoric. To them, the federal government is an entity that taxes the poor to enrich the connected and powerful. Therefore, any effort to shrink the federal government is putting the people ahead of the powerful.

And there are lots of federal programs that are about enriching the elite. But excluding the Department of Defense, the really expensive programs are either mostly about providing benefits to the poor (Medicaid, TANF, SSI, disability insurance) or the middle class (Social Security old-age pensions, Medicare).

So you can call for abolishing the Export-Import Bank and say as many things like this about Democrats as you want:

But if you think devolving programs like Social Security is a good idea, you're never going to sell your economic agenda to the center of America's middle class.