Democrats cannot really understand why they lost the 2004 presidential election. They pulled out all the stops in their campaign for Kerry. They even had endorsements from such intellectual heavyweights as Leonardo Dicaprio, Ben Afleck, and Michael Moore (although Michael should probably be considered more anti-Bush than pro-Kerry). Meanwhile, Kerry promised to truncate Bush’s tax cut in order to shore up programs like social security, without making any troublesome, or for that matter, innovative changes to these programs basic structure--i.e. delaying crises without solving them. It seemed that a running theme of Kerry’s was an underlying fear of fundamental change and innovation in ‘safety-net’ programs and instead a promise of better short-term funding, all, of course, financed by erasing Bush’s tax cuts.

Bush, on the other hand, has realized the opportunity to shift the debate on social welfare to offers of a hand-up rather than of handouts. Bush has taken the first steps to this new ideal of an ‘ownership society.’ An ownership society, as opposed to Johnson’s “Great Society,” is driven by, those free market principles which seem to prove meddlesome in the lofty and grandiose schemes of our friends on the left. Rather than ignoring these fundamental economic principles, the idea of an ownership society applies them for the general benefit of society. Indeed, school vouchers, and Bush’s proposed reforms to social security and the tax code (to pick a few ideas) can all be related to the far-reaching idea of an ownership society.

What all of these reforms have in common is the idea that money is more efficiently used for the improvement of society when it is in the hands of those to whom it belongs. However, what individual ownership does not necessarily entail is the complete absence of government. In privatizing social security and authorizing vouchers, the government is still requiring that money be spent on retirement and education, respectively, while allowing greater freedom concerning how the money is applied to those general requirements. Additionally, in both cases, giving direct, if somewhat limited, control over individuals hard-earned money eliminates the inefficiencies of government bureaucracies and forces the government to become more accountable.

Think about it: when you are a government bureaucrat in a cubicle somewhere in the recesses of the Department of Education, it does not make much difference to you personally whether you paid two dollars for a pencil that could easily be bought for ten cents. It’s not your money. You don’t see a dime more in your pocket regardless of what you paid for the pencil and you don’t really have to worry too much about being fired because of you have a high level of job security. Forcing the Department of Education to compete with private schools or lose funding, forces them to be more efficient and more responsive. Uh oh, sounds like that darn “invisible hand” again. Similarly, privatizing social security would create more competition for individuals’ retirement accounts and thus drive investment companies to lower fees and increase returns. New competition forces the government to be more responsible with social security tax revenue and to no longer use surpluses from the deceivingly named Social Security Trust Fund to cover their deficits. What a novel idea! Social security taxes being used to finance social security programs. Who’d have thought it?! The end result would be better retirement options and more wealth for all Americans.

Tax breaks and tax reform have similar effects if considered in the light that voluntary exchanges of money lead to win-win situations. Because taxes are not voluntary exchanges, it is not necessary that the government use a citizen’s money as efficiently as possible. After all, the citizen has to pay no matter what, so there is no fear that an inefficient allocation of resources may lead to a loss of revenue or profit. Some may argue that elections and other democratic processes serve to make politicians more accountable, but the truth of the matter is that there is a cost involved in this, too. Going through lines and lines of legalese to determine whether a spending bill contains frivolous spending requires time and maybe even legal training. Not only is there this cost of monitoring, but there is also the cost of monitoring the monitors to make sure that they are not corrupt. What is important is that government bureaucracies are not inherently self-monitoring whereas individuals and corporations are. Money in the hands of individuals is much more likely to be spent efficiently and presents a greater potential for growth and improvement.

The beauty of an ownership society is that it allows for safety net programs while simultaneously allowing more and more people to provide for themselves. In fact, the costs of safety net programs will go down as more and more people move into a higher and higher standard of living. Such economic progress also indicates how lower tax rates can paradoxically increase tax revenue. Bush’s proposed social security and tax reforms take us closer to this ideal of ownership and economic progress that is a unique and exemplary characteristic of the United States. It is no wonder that Kerry’s cynical and defeatist policies did not trump Bush’s policies of growth and ownership.