Fuzzy, Fuzzier, Fuzziest: Junior's SS Math

So, Junior launched his new "initiative" to save Social Security this afternoon. From the AP:

"President Bush on Thursday flatly ruled out raising payroll taxes to ensure the solvency of Social Security as he began a push for historic changes in the retirement program... 'I will not prejudge any solution,' Bush said."

AP's been doing a pretty good job of late juxtaposing contradictory comments like this as they issue forth like explosive flatus from the mouth of Junior and his lackeys, but this contradiction like most will slide right under the radar of the mainstream media. Which is shameful, since this charade is particularly emblematic of the politically fantastic, utterly irrational, and mind-bogglingly ignorant economic policies of this administration.

"'Does this country have the will to address this problem? I think it must,' Bush said, sitting next to Treasury Secretary John Snow and the members of his panel."

If the country has the will, Bush is certainly not about to call upon that will. The only way to save Social Security, as any impartial and credentialed economist will tell you, is to raise additional revenue to make good on future payments. In other words, taxes.

Loathe to electrocute himself on the third rail lest he suffer the same tax-hiker legacy as dear old 41, Junior puts forth his alternative: private accounts. There's only one problem. If private accounts are offered as an alternative to paying into the public trust that in today's model is Social Security, the Bush plan would diminish revenue; perhaps slightly, perhaps significantly. But it will never and can never increase revenue. This plan is in intention and construction a replacement for Social Security.

Of course, this is a tactic designed to appeal to those who respond in a Pavlovian way to Rove's "Ownership Society" premise. Only for those who live hand to mouth, and even for those on fixed incomes or those in the middle class, this plan paves the way for a "You're On Your Ownership Society," and it ain't hard to connect the dots to a future where America's elderly die poor and penniless in vast numbers.


Blogger Ellis Godard said...

Taxes won't save social security without being so high that they'd crumble the economy. Euthanasia and some Malthusian death checks might help. But raising the payout age, to perhaps 75 or higher, would help.

The safety net was designed for those who surpass life expectancy. Maybe we loosen that up and let it follow a reasonable period of time covered by retirement savings (for folks who make it that far). But tighten up and cushion everyone past 65 in perpetuity? Doesn't work demographically. There won't be enough working folk to pay for the pensioners.

December 10, 2004 at 8:44 AM  
Blogger The Termite said...

Can you attribute your statement that SS was meant as a safety net for those who surpassed life expectancy? I was always taught that it was a response to the development of the aging poor. Volatility in savings and investment vehicles created a class of elderly Americans who were insolvent and either couldn't stop working despite flagging health or couldn't compete in the labor market and so died poor or penniless. It wasn't part of the bargain that people would keep dying at around 60.

Depression survivors are all gone now, so maybe we've forgotten as a society how distasteful we find the reality of old people dying of exposure and starvation in our streets.

I'd also like attribution on your remark about how it's impossible to save SS without bankrupting the economy, and barring that a suggested alternative that doesn't sound like something out of "Logan's Run." Lots of respected economists think it's easily salvageable.

December 10, 2004 at 11:41 AM  
Blogger Ellis Godard said...

You're welcomed to hunt for attributions yourself. :) SS was set at 65 because that was the life expectancy at the time. It's now 73 to 82, depending on gender and other factors.

Which "lots of respected economists" think we can save SS without raising the age of payout, without dangerously high taxes, and without shifting to privitized accounts? Those are the three alternatives I've heard discussed since at least 1988 (16 years ago) and possibly earlier.

December 10, 2004 at 12:05 PM  
Blogger The Termite said...

Firstly, shifting to privatized accounts is not a strategy for saving social security. It's a strategy for privatizing it, period. And I'm sure you'll agree that "privatizing" a "social" program is essentially code for dismantling it. It's an oxymoron. Offering privatized accounts can only deplete the fund (among other potentially undesirable effects).

I would agree with raising the age. And when I have some time I will follow up with some links to economist opinions on the matter.

December 10, 2004 at 12:39 PM  
Blogger marxistcapitalistobjectivistbuddhist said...

And speaking of contradictions:

If W wants an "ownership society", why not just... let people keep their money, instead of forcing it into some government-sponsored shell game. The whole premise of Social Security is that sometimes people get unlucky or are just plain stupid-- they fail at ownership, and it's society's obligation to provide them a bare minimum of support. By design, SS is antithetical to private ownership. Which is OK by me-- I'm willing to have a little non-capitalist safety valve to help some people out, even if it costs me a pretty penny.

And while I agree with the Termite in finding it distateful that Bush's plan might leave people dying penniless, I find Bush's plan scary on another front: the prospect of government ownership of private industry, a nice trek towards socialism. You think the government will let American Airlines fail if some % of the government's portfolio is tied up in it? Not a chance. So, fuck the nimble innovator-- it'll be about preserving the pocketbooks of fat cat execs with the excuse that it's "in the public interest."

For a professed free-marketer, Bush is taking us dangerously close to a nice blend of fascism and socialism. Another contradiction...

December 10, 2004 at 2:31 PM  
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