Greenspan, Bush and Social Security: Robin Hoods in reverse
Alan Greenspan made everyone sit up and take notice yesterday by
declaring that, since he thinks raising taxes is a bad idea, the only
way to deal with the ballooning deficits the nation faces as the baby
boomers retire is to cut Social Security benefits.

So there you have it, more starkly laid out than ever before, by the one
voice in the national economy that everyone listens to. First we lowered
taxes with a plan ridiculously weighted towards rewarding the extreme
high end of wealthy citizens, while tossing a handful of crumbs to the
middle class; now we're told that we have to make up the difference by
cutting retirement benefits for the mass of Americans.

Let's be clear on a few things: I don't feel that Social Security is a
sacred cow that should never be reviewed, revisited or revised. Let's
talk about means tests, fixing the inflation indexing, whatever. There's
lots of room, and need, for good reform ideas. (The Bush privatization
idea is not, however, one of them; putting aside the argument over
whether it would offer good results, Bush has never explained how he
intends to pay for it. Since the cash to pay for current retirees'
benefits comes from current wage-earners' tax payments, if you put the
current wage-earners' payments into private accounts, you can't pay the
current retirees -- and we're right back to Greenspan's talk of cutting
benefits.)

But let's not allow the most basic fact of this national debate to be
obscured, either. Bush and Greenspan together are practicing a sick kind
of reverse-Robin-Hoodism (or should it be hoodwinkery?). What we are
witnessing is a gigantic transfer of cash from the pockets of the many
to the pockets of the few. This isn't just morally bankrupt -- it's
pragmatically stupid, since in the long run it hobbles the economy.

Our memory span is so short that none of the media coverage of
Greenspan's speech that I saw bothered to review the basic history he
The U.S. had already had a plan in place to deal with the baby boom
retirement! What do you think those surpluses we began to run up in the
late 1990s were all about? That was the money that a bipartisan
coalition of responsible Democrats and Republicans had -- at
considerable political cost to themselves -- begun to sock away so that
we could approach this demographic tidal wave with some degree of
confidence.

Fast forward to the 2000 election: Remember George Bush's absurd -- but
politically effective -- argument about the surplus? He told us it was
"our" money, not the government's, and he wanted to give "us" some of it
back. These are Bush's words from that election: "Half the surplus is
gonna go for Social Security reform and to pay down debt. One quarter is
gonna go for new programs that are needed. But I think it's fair, and I
think it's right, that one quarter go back to the hard working Americans
who pay the bills."

In hindsight, the distortions and outright lies rolled into that
campaign statement are too tightly packed to pry apart: As it turned
out, none of the surplus went toward Social Security reform or to pay
down debt. Bush pushed through a series of tax cuts that reduced the tax
burden on the wealthy while barely changing the tax situations of most
"hard working Americans who pay the bills." We encountered recession and
war, and instead of facing up to tough fiscal choices, Bush kept telling
us, "Just wait, the tax cuts will do their trick -- the economy will
grow, Americans will get back to work and the recovery will shave down
the deficit." None of that has happened, despite multiple waves of tax
cuts. Instead, the deficits keep getting worse.

So now the other shoe drops: Whoops, says Alan Greenspan to middle
America, George Bush wrecked your economy, the Republican Congress
squandered the national piggy bank -- now we'll have to cut your
retirement benefit! After all, isn't it more important to protect
billion-dollar estates from the "death tax" than to keep offering
working retirees a reasonable pension?

There is one thing Greenspan has done here that the Bush administration
will not forgive him for: He was supposed to wait till after the
election to start talking about cutting Social Security. Before the
election, this dose of truth-telling is a little too dangerous. People
might actually start paying attention.

Scott Rosenberg Salon.com

On Fri, 27 Feb 2004 16:48:59 -0500, Jim wrote:

Greenspan, Bush and Social Security: Robin Hoods in reverse
Alan Greenspan made everyone sit up and take notice yesterday by
declaring that, since he thinks raising taxes is a bad idea, the only
way to deal with the ballooning deficits the nation faces as the baby
boomers retire is to cut Social Security benefits.

Much snipped.

Greenspan did not declare that we must cut Social Security benefits.
He did not say the tax cut was a bad idea.

From the Washington Post:

"Federal Reserve Chairman Alan Greenspan warned Congress yesterday
that the federal government has promised more retirement benefits than
it can pay for and must consider scaling back those commitments soon
to avoid damaging the economy in the future. "

Note the words, 'must consider'.


"Greenspan, who supported President Bush's 2001 tax cuts, again
endorsed Bush's proposal to make the cuts permanent."

Note the word 'supported'.

"Democrats quickly seized on Greenspan's comments as a weapon in
blaming Bush for worsening the deficit and endangering Social
Security."

As did Jim.

"Republicans welcomed Greenspan's other remarks, which credited the
Bush tax cuts for helping the economic recovery."

Which they have.

"Yesterday, Greenspan again endorsed extending the tax cuts, pleasing
Republicans."

This kinda makes your whole post kinda suspect, Jim!




John H

On the 'Poco Loco' out of Deale, MD
on the beautiful Chesapeake Bay!