Saturday, March 26, 2011

Mister Cabbage Tool

Over at FDL this morning, Phoenix Woman bats around the minions of Pete Peterson like a kittypet with a fledgling sparrow. Peterson is like the Koch Brothers of fiscal policy, showering grant money and cocktail-weenie buffets on those who opine that the greatest threat facing our nation is the potential shortfall in Social Security funding in 2037. As a result, this is been one of the great bugaboos of serious people and hack pundits for a couple of decades now, despite scant evidence and, ahem, more pressing matters.

Now, there may be more odious pundits in America than Charles Krauthammer, but the list is a short one (Hm...not as short as I thought). Anyway, Mr. Cabbage Tool has coughed up not one, but two hairballs of late, contributing to the national discourse on this matter. Others have had their fun with him, but it galls me to see such nonsense   in my local legacy media before breakfast.

So I wrote them a LTTE. I like writing LTTEs, because the 150-word limit forces concision, unlike the unlimited pixel space Mr. Google provides me here. There's been a change of management at the local daily, and coincidentally or not, they've passed on a number of my recent missives, whereas they used to print them more often than not. But given my free soapbox for the twelve of you, that twenty minutes need not have gone to waste:

If we’ve borrowed trillions from the Social Security trust fund, what’s the remedy? Well, how was that money spent?

The fund was flush because President Reagan hiked up payroll taxes on working people in order to set money aside for the Baby Boomers’ retirement. And he had to borrow from it to finance his military buildup because he had lowered taxes for the rich.

President Clinton helped erase Reagan’s deficits by raising taxes on the rich, and wisely counseled that we use the resulting surplus to pay back into Social Security. President Bush decided instead to cut taxes again for the wealthy, and then used the Social Security credit card to finance two wars and a haphazard Medicare expansion.

So the people who have enjoyed lower tax rates off of my retirement fund are just going to have to start chipping in again. Because we can’t give back the wars.

The word limit, though, forced me to omit other equally cogent rebuttals, one of which concerns the extremely conservative projections of future GDP growth upon which the 2037 doomsday deadline relies. And what does this morning's pressed tree pulp bring me but an upward revision for Q4 2010 from 2.8 to 3.1%. That's not enough to jumpstart us from our Bush hangover anytime soon, but it is more than a point above what the SS actuaries project for the average growth rate over the next 75 years. And under their optimist's scenario, we can muster up two point nine average growth between now and 2088.

In which case, the trust fund never runs out of money; not in 2037, not in my lifetime, and not in Charles Krauthammer's grandchildren's lifetime.

So the solution to the Great Social Security Crisis of 2037 is the same as for the Scary Deficit Crisis of 2011: put people back to work, get the economy moving, and the problem takes care of itself. Assuming you return to Clinton-era tax levels instead of renewing the Shrub Giveaway to the Oligarchy - because those tax cuts blow a bigger hole in the national debt over the next 75 years than the gloomy-actuary scenario does.

What a tool.

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