Tuesday, February 02, 2010
The assault on Social Security has begun!
No mistake about it, the move to dishonor the Social Security bonds is on. One tactic to achieving this goal is to lie about seniors. David Brooks did that today
... we are living in an age of reverse-generativity. Far from serving the young, the old are now taking from them. First, they are taking money. According to Julia Isaacs of the Brookings Institution, the federal government now spends $7 on the elderly for each $1 it spends on children.
Second, they are taking freedom. In 2009, for the first time in American history, every single penny of federal tax revenue went to pay for mandatory spending programs, according to Eugene Steuerle of the Urban Institute. As more money goes to pay off promises made mostly to the old, the young have less control.
Third, they are taking opportunity. For decades, federal spending has hovered around 20 percent of G.D.P. By 2019, it is forecast to be at 25 percent and rising. The higher tax rates implied by that spending will mean less growth and fewer opportunities.
- Brooks would have you believe that the "spending" on the elderly is all part of general revenues (e.g. income tax) and discretionary outlays. That's false.
- Watch closely. Brooks refers to "federal tax revenue", which includes Social Security taxes! Brooks is, in effect, complaining that
every single penny of taxes paid into trust funds went to pay for programs that the trust funds are designed for
- The bump in federal spending is largely a result of the economic troubles of recent vintage, not due to greedy seniors.
As I've said, so long as Social Security was taking in more money than it was paying out, it was a sacred honor between generations. The instant it started paying out more money than it was taking in, it became an unsustainable burden.
Back around 2000 before the popping of the "Hi Tech" bubble, there was quite a bit written about how much wealth geezers would be passing on to their children, grandchildren, etc. But then came Bush/Cheney, 9/11 and several more bubbles, reducing geezer wealth that perhaps the boomers were expecting to inherit, in anticipation of which many boomers used their home equity as their ATM rather than saving as had the geezers. Rising tides can result in bursting bubbles.
You'll notice that the scheduled beginning of the payback of the Social Security bonds is now being characterized as a bailout.
The propaganda war has begun.