Thursday, December 23, 2004

Bush backers made a sucker’s bet

Bush backers made a sucker’s bet
Gene Lyons
Posted on Wednesday, December 22, 2004
In making President Bush its "Person of the Year," Timegushed that he had successfully "reframed reality to match his design." Ponder that phrase. A cynic might think it a backhanded way of calling him a particularly accomplished liar. Indeed, Bush prevailed in November largely because many Americans simply cannot believe that their president would deliberately mislead them about matters of life and death. Consider, however, Bush’s doomsday pronouncements about the impending bankruptcy of Social Security. They’re sheer fiction, contrived to conceal this administration’s own fiscal recklessness—the combination of tax cuts for the wealthy and runaway spending that has increased federal outlays some 29 percent since his 2001 inauguration. After pledging during the 2000 campaign to set aside $2.6 trillion of the projected surplus in a Social Security "lockbox," Bush has, instead, produced swelling deficits. Now he promises strict "fiscal discipline." Do not hold your breath. Here’s the real problem: Over the past two decades, ever since a commission led by Alan Greenspan convinced the Reagan administration to raise payroll taxes to fund the retirement of the socalled Baby Boom generation, Republican and Democratic administrations alike have "borrowed" the proceeds to finance the year-to-year operations of the U.S. government. Instead of cash reserves, the Social Security Trust Fund, roughly $1.5 trillion to date, consists of "specialissue" Treasury bonds pledging repayment with interest whenever the money is needed to pay Social Security benefits.
Under current projections, that’s supposed to start happening in 2018, when the excess payroll taxes paid by Baby Boomers over 35 years to fund their own retirement will be needed. By then, the trust fund should be worth approximately $3 trillion—enough to keep the system solvent for at least another 30 years with no benefit adjustments whatsoever....