Social Security: The Paper Cut "Crisis"

[swag]

http://globalpolitician.com/articles.asp?ID=358

2/26/2005
By Susan Goya

Excerpts:

. . . Bush often cites the bipartisan Social Security Commission chaired by Senator Daniel P. Moynihan, while forgetting that Moynihan wanted to repeal the 1983 increase in payroll taxes to prevent Bush Sr. from “embezzling” the surplus. “Mr. President…If there is a problem of dissimulation, I would suggest that it resides with the present practice of using Social Security trust funds as general revenues. My distinguished friend, the Republican Senator from Pennsylvania, Senator Heinz, has used a very direct word for this. He says it is called embezzlement.” {Congressional Record}

"From my perspective," said Allen W. Smith, author of The Looting of Social Security, "President Bush clearly admitted to looting the Social Security trust fund in three separate speeches this week” <11>. Bush now says there is no Trust Fund <12>: “Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust.”
. . .
Bush is saying he plans to default on the debt. In an analogy found on DailyKos <14>: “It is like borrowing from your kid's college account to fund a higher standard of living. When the kid gets into college, you then tell him the money is gone and he will just have to go out and take out $100,000 in loans (at a higher interest rate, because the family is now insolvent). But what the hey--he got to enjoy the nice house, the clothes, the vacations and the car, didn't he?”
. . .
Reports from other countries who have tried privatization are discouraging <29>. The Social Security Administration's favorite, the Chilean plan <30>, is falling far short of expectations <31>. Once the administration's public model of privatization, the Chilean plan is no longer mentioned. Britain's private retirement plan <32> has also disappointed expectations <33>. The Swedish plan, once recommended as a model for the US, has come under increasing criticism because the payroll tax is 16 percent and 95 percent of Swedish citizens do not choose manage their accounts <34>. They do not even bother to choose a financial instrument, and so end up with the “default” plan <35>.
. . .
In the meantime, given the administration's admission that private accounts are moot vis-a-vis Social Security, as Matthew Yglesias says, “There's no real sense in debating the merits of various hypothetical conservative proposals to maintain the viability of the current system when conservatives are not, in fact, making any proposals to maintain the viability of the current system” <40>.
. . .

(Worth a read in its entirety, I think. Hits several additional critical issues not excerpted.)

[On the Road]

1. Very Good Article

I especially like the suggestion that Bush's claim that there is no trust fund not only violates the Constitution, but is an impeachable offense.

[Name removed]

2. Deleted message

Message removed by moderator. Click here to review the message board rules.

[On the Road]

3. They Bought a Used Car from Art Linkletter

Art will never live to see the day the chickens come home to roost. He is NOT the right person to put your trust in.

[SharonAnn]

4. Thanks, excellent article. It makes some important points and

makes those points very well.

[MasonJar]

5. Wow! Another opponent of Bushethics killed in a plane crash.