A Moral Dilemma

A classic moral dilemma goes like this:

You are at a train track and see five people tied to the track ahead. A switch is in front of you which will divert the train, but as you look down you see a man is strapped to that track and will be killed. Is it permissible to flip the switch and save the five people at the expense of one?

If you are like most people, you said yes.

Now imagine in order to save the five people, you have to push a stranger in front of the train to stop it. You know for certain it would stop the train in time to save the five people tied to the tracks. Is it permissible to push the man and save the five people at the expense of one?

You probably said no. But the results are the same — the only difference is the method (passive vs. impassive). But in both cases you sacrifice one life to save five.

The problem is squeamishness. It is easier to be passive than active, even if being active has the same result as passivity.

Politicians in Washington face an analogous moral dilemma, to which I will come after setting the stage.

Government debt is rising, and will continue to rise unless the laws governing Social Security, Medicare, and Medicaid are changed to reduce future benefits from “promised” levels. (It has long been understood that the “promises” are not legally binding, and may be changed at any time.) Alternatively, taxes must rise considerably.

Barring benefit reductions or tax increases, government debt will reach a point at which it becomes unsustainable. That is, it would become impossible for government to borrow, except at extremely high rates of interest. Those high rates would spill over into the private sector and make corporate borrowing an unattractive source of capital for business expansion. At the same time, stock prices would drop, in response to higher interest rates, therefore making stock issuance an unattractive source of capital for business expansion.

The developments I have just outlined would lead to prolonged (perhaps permanent) economic stagnation, such as Japan has experienced. Stagnation would, in turn, magnify the burden on future workers, who will (no matter what) foot the bill for Social Security, Medicare, and Medicaid. At some point, politicians would confront two stark options: cut benefits even more deeply than they would if action hadn’t been postponed; maintain “promised” benefits and drive future generations into penury.

In a nutshell:

  • Today’s “promises” to future recipients of Social Security, Medicare, and Medicaid cannot be kept without doing harm,  in the form of onerous taxes and/or economic stagnation (at best), in the not-too-distant future.
  • Despite the certainty of that harm, most politicians are afraid to suggest that today’s “promises” cannot be kept. And they are equally afraid to raise taxes to the levels required to keep those “promises.” They are afraid because they believe that the truth will cost them their jobs.

Politicians who are unwilling to acknowledge the facts about Social Security, Medicare, and Medicaid are like the squeamish bystander who refuses to save five persons by pushing one person onto the train tracks. The one person, of course, is the politician, who fears that he would lose his job for the simple act of doing it.

For most politicians, there is no moral dilemma. Their course of action is preordained by their lack of morality. They will save themselves and sacrifice the well-being of millions of Americans.

Related posts:
Presidential Chutzpah
Can Markets Force Fiscal Discipline?
As Goes Greece . . .