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Alan Greenspan is a Political Hack
So, I go and get the Washington Post today, and what's on the front page, on the important right hand column?
"Greenspan Warns of Economic Stagnation
Future Social Security Benefit Cuts Urged
By Nell Henderson
Washington Post Staff Writer
Thursday, March 3, 2005; Page A01
Federal Reserve Chairman Alan Greenspan yesterday urged Congress to act soon to reduce future Social Security and Medicare benefits, warning that growing federal budget deficits threaten to cause economic "stagnation" in coming decades."
You can read the whole article here (use BugMeNot to get through the registration).
Okay, firstly, he's a hack for urging Congress to reduce benefits, when there's not a need to. There's the trust fund. Secondly, he's a hack for trying to blame it on budget deficits that are largely the fault of the Bush administration's misguided tax giveaways for the rich. Thirdly, he's a hack for acting like tax increases are this impossible burden that will bring the economy to a halt.
But the fourth, and largest reason for his hackitude is this. From the same article...
"Greenspan was co-chairman of a 1983 bipartisan commission that agreed to strengthen Social Security's finances by raising payroll taxes and the retirement age."
Okay, so the taxes got raised, right? Remember my post a while ago about how Social Security was running a surplus and has trillions of dollars in the trust fund? That's trillions of extra dollars, paid mostly by working people, from a tax that EXCLUDES income over a certain amount. Trillions of dollars that everyday folks paid into Social Security, to have the extra money there when the baby boomers retire to cover the increase in Social Security costs. Those tax dollars were then used to buy Treasury Bonds, which sent the money into the general fund, where it was spent to cover things that income tax would have otherwise had to cover. Income tax, by the way, falls mostly on the highest income people. The ones exempt from a large chunk of Social Security's payroll taxes.
So since 1983, working people have been paying extra into Social Security to save up to cover the costs for the future. This was partly Greenspan's doing. Now, when those bonds are going to start being redeemed in the next 20-50 years, it's suddenly a crisis that requires benefit cuts. Because otherwise, taxes would have to go up, mostly on the rich. Because the only other option to pay for those bonds is to take MORE loans, or default on the Treasury Bonds.
Thusly, Alan Greenspan is a hack. He helped come up with a scheme that got the rich out of paying more taxes for the past 20+ years, and now when some of that might come due, it'd cause the economy to crash if we raised taxes to pay back the bonds. Hack.
That's what he has to be saying, right? 'Cause. I mean, nobody in the government would suggest Treasury Bonds are worthless and we might default on them, right? 'course not. Nobody would say that. Especially not the President.
President Bush on February 9, 2005
"Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust."
Oops.
(I may go into it later, but trust me, the government defaulting on Treasury Bonds would be a Very Bad Thing) (Also, once again, a nod to slacktivist where I got the Bush quote from.)
[EDIT: Apparently, other people including Harry Reid, the Senate Minority Leader, agree with me.]
Tags: Politics
"Greenspan Warns of Economic Stagnation
Future Social Security Benefit Cuts Urged
By Nell Henderson
Washington Post Staff Writer
Thursday, March 3, 2005; Page A01
Federal Reserve Chairman Alan Greenspan yesterday urged Congress to act soon to reduce future Social Security and Medicare benefits, warning that growing federal budget deficits threaten to cause economic "stagnation" in coming decades."
You can read the whole article here (use BugMeNot to get through the registration).
Okay, firstly, he's a hack for urging Congress to reduce benefits, when there's not a need to. There's the trust fund. Secondly, he's a hack for trying to blame it on budget deficits that are largely the fault of the Bush administration's misguided tax giveaways for the rich. Thirdly, he's a hack for acting like tax increases are this impossible burden that will bring the economy to a halt.
But the fourth, and largest reason for his hackitude is this. From the same article...
"Greenspan was co-chairman of a 1983 bipartisan commission that agreed to strengthen Social Security's finances by raising payroll taxes and the retirement age."
Okay, so the taxes got raised, right? Remember my post a while ago about how Social Security was running a surplus and has trillions of dollars in the trust fund? That's trillions of extra dollars, paid mostly by working people, from a tax that EXCLUDES income over a certain amount. Trillions of dollars that everyday folks paid into Social Security, to have the extra money there when the baby boomers retire to cover the increase in Social Security costs. Those tax dollars were then used to buy Treasury Bonds, which sent the money into the general fund, where it was spent to cover things that income tax would have otherwise had to cover. Income tax, by the way, falls mostly on the highest income people. The ones exempt from a large chunk of Social Security's payroll taxes.
So since 1983, working people have been paying extra into Social Security to save up to cover the costs for the future. This was partly Greenspan's doing. Now, when those bonds are going to start being redeemed in the next 20-50 years, it's suddenly a crisis that requires benefit cuts. Because otherwise, taxes would have to go up, mostly on the rich. Because the only other option to pay for those bonds is to take MORE loans, or default on the Treasury Bonds.
Thusly, Alan Greenspan is a hack. He helped come up with a scheme that got the rich out of paying more taxes for the past 20+ years, and now when some of that might come due, it'd cause the economy to crash if we raised taxes to pay back the bonds. Hack.
That's what he has to be saying, right? 'Cause. I mean, nobody in the government would suggest Treasury Bonds are worthless and we might default on them, right? 'course not. Nobody would say that. Especially not the President.
President Bush on February 9, 2005
"Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust."
Oops.
(I may go into it later, but trust me, the government defaulting on Treasury Bonds would be a Very Bad Thing) (Also, once again, a nod to slacktivist where I got the Bush quote from.)
[EDIT: Apparently, other people including Harry Reid, the Senate Minority Leader, agree with me.]
Tags: Politics