"We will not raise payroll taxes to solve this problem." -- President George W. Bush.
"Reality is wrong. Dreams are for real." -- Tupac Shakur.
DETROIT -- President George W. Bush has disconnected reality from his public policy decisions. There is something revealing and striking in the fact that the President of the United States finds himself mentally on the same page with the late gangsta rapper. Tupac Shakur, at least, admitted his dreams trumped reality. Bush pretends he's for real.
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Bush was talking about his plan to partially privatize Social Security to "strengthen" the program and "save" it from the ravages of Baby Boomers growing old and actually expecting to get the benefits they've been helping to fund for the last 40 years or so.
Shakur, while claiming to dismiss reality, actually had a better grasp of it than Bush is now demonstrating in his clouded vision and plan to increase dramatically government borrowing and indebtedness in order to finance a transition to add personal retirement accounts to Social Security.
Bush essentially wants to borrow money -- experts estimate $2 trillion over the next 10 years -- and gamble your money on his bet that government speculating on stocks will "fix" the system. Much of Bush's plan, projections and assumptions are kept deliberately vague. But he's clear in the promise no taxes will increase, no benefits will be reduced for this generation of retirees and that the best road to privatizing Social Security investments is paved with public debt.
We can only dream how this will work.
Bush wants us all to roll the dice and pray the switch to individual pension accounts won't result in the economic crisis that plagued Argentina in the 1990s, when a similar privatization shuffle was attempted. The government chose massive borrowing rather than taxes to fund the experiment.
New York Times columnist and Princeton economist Paul Krugman regularly rains reality on Bush's fiscal fantasy parades, in which the president borrows today and hints that, come some indefinite tomorrow, benefits may be reduced.
"If Mr. Bush were to say in plain English that his plan to solve our fiscal problems is to borrow trillions, put the money into stocks and hope for the best, everyone would denounce that plan as the height of irresponsibility," Krugman wrote.
Tupac Shakur had a handle on such recklessness in his song "I'm Getting Money," and Bush would do well to heed the wisdom from the 'hood.
"Shakin' the dice, now roll 'em.
If you can't stand the pain, better hold 'em.
'Cause ain't no tellin' what you might roll."
Since others always endure the pain he causes, Bush rarely exercises such caution and restraint. Instead his "thought" process follows a predictable pattern which invariably leads him to "certainty." That's how we ended up in the tragic mess in Iraq. Bush continues to substitute his dreams of a military-imposed democracy spreading the winds of freedom across the despotic desert in the Middle East for the reality of horrible, endless bloodshed and Americans despised in the region.
Oh, yes, this nightmare of violence will also make us safer and more secure at home.
Here's how George W.'s dream world works. First, he feels what his "gut" tells him -- usually conclusions Karl Rove, the neocons and his corporate sponsors have already been whispering into his ear.
The next step is to "pray over" the matter, call it "reform" and sign on the religious right to declare the issue a matter of "values" and a "moral imperative." Toss in a few words about the future, children and your own courage in even bringing up the issue, and Bush is on his way.
From there, describe whatever the problem is as a "crisis" and use the usually compliant media to let the administration frame the issue and serve as an echo chamber for the White House talking points.
The Social Security fund is not in danger of imminent collapse and the use of the term "crisis" is largely a fabricated ploy to soften up public opinion to give Bush whatever he wants.
Some modest tweaking can sustain the Social Security trust fund with no change in benefits into the 22nd century, according to projections contained in a Congressional Budget Office report.
Based on that report, Krugman notes that Social Security fund stability "would require additional revenues equal to only 0.54 percent of G.D.P. That's less than 3 percent of federal spending -- less than we're currently spending in Iraq. And it's only about one-quarter of the revenue lost each year because of Bush's tax cut -- roughly equal to the fraction of those cuts that goes to people with incomes over $500,000 a year."
The Social Security fund started accumulating vast surpluses because back in the early 1980s President Ronald Reagan and House Speaker Thomas "Tip" O'Neill cut a deal.
Confronting reality, they realized the fund needed a huge infusion of cash to guarantee that there would be enough money to pay for the Baby Boomers when they reached retirement age. So payroll taxes -- paid mostly by working-class Americans -- were increased. Ronald Reagan signed the measure into law. I repeat, Ronald Reagan signed the massive tax increase into law!
But, by golly, it worked. Surpluses did grow and the Social Security fund -- with modest adjustments -- can continue to provide American workers with what they have grown to expect.
The rest of the financing for the federal government has not fared as well. But George W. Bush refuses to face the reality that his tax cuts for the wealthiest Americans, his unfunded imperial war in Iraq and his underfunded Medicare prescription drug benefit are creating the record government deficits.
Bush and his pals in the Republican Congress -- now legendary for their lard-assed political pork spending -- have created unprecedented fiscal peril and they have no plan whatsoever about how to address the problem. There's a real crisis there. We don't need to create one for Social Security, unless your purpose is to divert public attention from reality.
A few Republicans, though, are starting to squeal over Bush's plan to use public debt to pay for private Social Security investments. Sen. Lindsey Graham (R-S.C.), who supports creating private Social Security retirement accounts, spoke heresy, using a forbidden word to challenge Bush's reality.
"You can't reform the system and put Social Security on solid financial footing without some sacrifice," the senator said.
Sacrifice! Sacre Bleu!
Spend, borrow and pray -- that's the Bush fiscal mantra.
Sacrifice is for the poor, the French and the realists. In George W. Bush's dream world, there is a free lunch -- at least, until the bill arrives and he passes it off to someone else.
Sen. Graham is open to the idea of raising the annual tax cap on Social Security earnings from the current $87,500 to $150,000. That would result in additional payroll taxes of about $3,800 a year for upper-income taxpayers. Graham proposes that those higher payroll taxes be imposed for 12 to 15 years or until Social Security achieves solvency under the new private retirement accounts.
Since those income-earners already have benefited richly from Bush's income tax reductions and elimination of dividend taxes, the plan makes practical sense, along with a touch of distributive justice. Bush will have no part of such a realistic approach.
Better to borrow the money now, increase the deficit and pass all those costs on to future middle-class wage-earners. Under Bush's plan, the sure winners are banks, Wall Street brokerage firms and his corporate sponsors. For the rest of us, it's a big gamble and more debt.
There may be merit in some limited privatization of Social Security investment, but those changes must be made carefully and responsibly. Social Security needs common sense, not Bush's radical salvation. Modest taxation and fiscal realism make much more sense than his wild dreams, "'cause ain't no tellin' what you might roll."
|Niagara Falls Reporter||www.niagarafallsreporter.com||Dec. 14 2004|