Krauthammer's evasion:

Today, Charles Krauthammer weighs in on the Social Security debate. He says: (excerpts, emp add)

The Social Security system has no trust fund. No lockbox. When you pay your payroll tax every year, the money is not converted into gold bars and shipped to some desert island, ready for retrieval when you turn 65. The system is pay as you go. The money goes to support that year's Social Security recipients. What's left over is "lent" to the federal Treasury. And gets entirely spent. It vanishes. In return, a piece of paper gets deposited in a vault in West Virginia saying that the left hand of the government owes money to the right hand of the government.

These pieces of paper might be useful for rolling cigars. They will not fund your retirement. Your Leisure World greens fees will be coming from the payroll taxes of young people during the years you grow old.

... The really important date is 2018. That is when this pay-as-you-go system starts paying out more (in Social Security benefits) than goes in.   ... in 13 years the system begins to go into the red. To cover retiree benefits, the government will have to ... come up with the [money] -- by borrowing on the world market, raising taxes or cutting other government programs.

---

• If Krauthammer believes that the current surplus Social Security funds "vanish", then why doesn't he call for an end to such higher FICA taxes? Or does he believe that it's okay to have a clearly regressive tax paying for general federal expenditures?
  
  
• If the Bush tax cuts had not been implemented, this country's debt would not be so big, and might even be lower if surpluses were used to pay it down. In any event, it would be easier to redeem the Social Security bonds (aka "pieces of paper") by borrowing - which would smooth out the funding over time and not hit then-current workers with a big tax hike. Krauthammer does not call for a repeal of Bush's tax cuts (or mention them at all).
  
  
• Nice of Krauthammer to imply that Social Security recipients will be shaking down young workers in order to pay for "Leisure World greens fees." As if those elderly people who depend entirely on Social Security are the kind of folks who drive their new Cadillac to the country club for a round of golf.

posted by Quiddity at 2/18/2005 11:36:00 AM