Monday
Feb212005
Better off with the lottery
Monday, February 21, 2005 at 3:00AM
By Ellen Ratner
Our traveling-salesman president went on the road this week to do what he does best: sell a bill of goods to the American people. He learned how effective he could be at sales way back when he was only Mr. George W. Bush, son of President H.W. Bush.
From convincing the citizens of Texas to fund his stadium and make him a millionaire in his own right, to selling a war and a tax cut in the same year, to now transforming the nation's retirement insurance plan of Social Security into a trillion-dollar-plus 401K plan, President Bush is the most comfortable and successful with the direct-marketing tactic. The problem with his latest product is that he isn't selling vacuum cleaners, he's selling an investment scheme that puts the nation's retirements and entire economy at risk.
Until now, unless you were in "mid-life," the Social Security debate was about as interesting as watching paint dry. I must credit the president with changing that. He's made Social Security a crisis. And Americans love to talk about crises. Like Weapons of Mass Destruction, the Social Security funding shortage is a looming threat for all Americans. If the president is great at selling his policies, he's even better at selling fear.
However, under the light of day – or weapons inspectors, as the case has been – most of his crises are not really crises at all. They are simply a distraction or justification to do what the president has long since wanted to do. Getting rid of Saddam Hussein, transforming the tax code, and privatizing Social Security, have been on this president's to-do list long before he had a presidential "to do" list.
And like Iraq, it's laughable to say that Social Security is in imminent danger. The giant Social Security piggy bank, called the Social Security Trust Fund, has been banking away extra dollars since the mid-'80s. Recent estimates show that the Social Security kitty is fully funded until 2042.
Putting the "non-crisis" element of the debate aside, I agree that the current Social Security system needs a slight makeover as it has in the past. As Paul Krugman, a leading economist, said in the New York Review article titled, "America's Senior Moment":
In 1983, following the recommendations of a commission headed by Alan Greenspan, Congress tried to prepare the program to deal with the baby boomers: It raised the payroll tax, so that Social Security would run a surplus.
They realized that since the 1970s, America went from 16 workers supporting one retiree to three workers supporting one retiree. As we move into the 21st century, two workers must support one retiree. This fact means that the system needs some adjustment. Many agree that this funding gap can be closed by a combination of policy changes ranging from raising the taxable cap of $90,000 on Social Security to means testing, to raising the Social Security tax itself.
These modifications amount to new taxes. But remember, our president is allergic to taxes. He would rather borrow hundreds of billions of tax dollars than ask wealthier Americans to sacrifice a little in order to ensure that the elderly have what they are entitled to.
The president's plan, or the alleged plan; because like Iraq, we know there's an invasion, but no plan for what happens afterward, is to borrow the "transition costs" and hope that the economy grows large enough to cover those costs and then some. I compare this to taking out a home equity loan to go to Vegas.
These transition costs can be anywhere between $800 billion and $2 trillion. I'm going to bet on $2 trillion given the administration's math grades to date. The Big Pharma giveaway, aka Medicare prescription-drug benefit is projected to cost twice of what the administration told us. And then there's the sore subject of Iraq. Larry Lindsey, Bush's economic adviser who was forced to resign because he told America that Iraq may cost as much as $200 billion, turns out to have been pretty much right on the money, so to speak.
President Bush, I must admit, is a brilliant salesman. He scares us with a terrible boogey man, and then convinces us he is the only one to save us, and that we don't really have to do anything except put our trust in George. The reality is that every time the president saves us, it ends up costing a lot of money.
In all likelihood, the hangover from the president's spending spree will end up burying the very Americans he claims he's saving. If I were a 20-something, I'd be better off buying a lottery ticket than trusting President Bush to invest my money.
Our traveling-salesman president went on the road this week to do what he does best: sell a bill of goods to the American people. He learned how effective he could be at sales way back when he was only Mr. George W. Bush, son of President H.W. Bush.
From convincing the citizens of Texas to fund his stadium and make him a millionaire in his own right, to selling a war and a tax cut in the same year, to now transforming the nation's retirement insurance plan of Social Security into a trillion-dollar-plus 401K plan, President Bush is the most comfortable and successful with the direct-marketing tactic. The problem with his latest product is that he isn't selling vacuum cleaners, he's selling an investment scheme that puts the nation's retirements and entire economy at risk.
Until now, unless you were in "mid-life," the Social Security debate was about as interesting as watching paint dry. I must credit the president with changing that. He's made Social Security a crisis. And Americans love to talk about crises. Like Weapons of Mass Destruction, the Social Security funding shortage is a looming threat for all Americans. If the president is great at selling his policies, he's even better at selling fear.
However, under the light of day – or weapons inspectors, as the case has been – most of his crises are not really crises at all. They are simply a distraction or justification to do what the president has long since wanted to do. Getting rid of Saddam Hussein, transforming the tax code, and privatizing Social Security, have been on this president's to-do list long before he had a presidential "to do" list.
And like Iraq, it's laughable to say that Social Security is in imminent danger. The giant Social Security piggy bank, called the Social Security Trust Fund, has been banking away extra dollars since the mid-'80s. Recent estimates show that the Social Security kitty is fully funded until 2042.
Putting the "non-crisis" element of the debate aside, I agree that the current Social Security system needs a slight makeover as it has in the past. As Paul Krugman, a leading economist, said in the New York Review article titled, "America's Senior Moment":
In 1983, following the recommendations of a commission headed by Alan Greenspan, Congress tried to prepare the program to deal with the baby boomers: It raised the payroll tax, so that Social Security would run a surplus.
They realized that since the 1970s, America went from 16 workers supporting one retiree to three workers supporting one retiree. As we move into the 21st century, two workers must support one retiree. This fact means that the system needs some adjustment. Many agree that this funding gap can be closed by a combination of policy changes ranging from raising the taxable cap of $90,000 on Social Security to means testing, to raising the Social Security tax itself.
These modifications amount to new taxes. But remember, our president is allergic to taxes. He would rather borrow hundreds of billions of tax dollars than ask wealthier Americans to sacrifice a little in order to ensure that the elderly have what they are entitled to.
The president's plan, or the alleged plan; because like Iraq, we know there's an invasion, but no plan for what happens afterward, is to borrow the "transition costs" and hope that the economy grows large enough to cover those costs and then some. I compare this to taking out a home equity loan to go to Vegas.
These transition costs can be anywhere between $800 billion and $2 trillion. I'm going to bet on $2 trillion given the administration's math grades to date. The Big Pharma giveaway, aka Medicare prescription-drug benefit is projected to cost twice of what the administration told us. And then there's the sore subject of Iraq. Larry Lindsey, Bush's economic adviser who was forced to resign because he told America that Iraq may cost as much as $200 billion, turns out to have been pretty much right on the money, so to speak.
President Bush, I must admit, is a brilliant salesman. He scares us with a terrible boogey man, and then convinces us he is the only one to save us, and that we don't really have to do anything except put our trust in George. The reality is that every time the president saves us, it ends up costing a lot of money.
In all likelihood, the hangover from the president's spending spree will end up burying the very Americans he claims he's saving. If I were a 20-something, I'd be better off buying a lottery ticket than trusting President Bush to invest my money.
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