Nasty Letters To Crooked Politicians

As we enter a new era of politics, we hope to see that Obama has the courage to fight the policies that Progressives hate. Will he have the fortitude to turn the economic future of America to help the working man? Or will he turn out to be just a pawn of big money, as he seems to be right now.

Monday, December 27, 2004

Chimp_junta Steals From the Needy--But Wait, Is that Compassion?

Bush backers made a sucker’s bet

Gene Lyons

In making President Bush its "Person of the Year," Time gushed that he
had successfully "reframed reality to match his design." Ponder that
phrase. A cynic might think it a backhanded way of calling him a
particularly accomplished liar. Indeed, Bush prevailed in November
largely because many Americans simply cannot believe that their
president would deliberately mislead them about matters of life and
death. Consider, however, Bush’s doomsday pronouncements about the
impending bankruptcy of Social Security. They’re sheer fiction,
contrived to conceal this administration’s own fiscal recklessness—the
combination of tax cuts for the wealthy and runaway spending that has
increased federal outlays some 29 percent since his 2001 inauguration.
After pledging during the 2000 campaign to set aside $2.6 trillion of
the projected surplus in a Social Security "lockbox," Bush has,
instead, produced swelling deficits. Now he promises strict "fiscal
discipline." Do not hold your breath. Here’s the real problem: Over
the past two decades, ever since a commission led by Alan Greenspan
convinced the Reagan administration to raise payroll taxes to fund
the retirement of the so called Baby Boom generation, Republican and
Democratic administrations alike have "borrowed" the proceeds to
finance the year-to-year operations of the U.S. government. Instead
of cash reserves, the Social Security Trust Fund, roughly $1.5
trillion to date, consists of "special issue" Treasury bonds pledging
repayment with interest whenever the money is needed to pay Social
Security benefits.

Under current projections, that’s supposed to start happening in 2018,
when the excess payroll taxes paid by Baby Boomers over 35 years to
fund their own retirement will be needed. By then, the trust fund should be
worth approximately $3 trillion—enough to keep the system solvent for
at least another 30 years with no benefit adjustments whatsoever.

But here’s the problem, according to Allen W. Smith, author of "The
Looting of Social Security":" Instead of investing the Social Security
surpluses in regular marketable Treasury bonds that could be cashed in
whenever additional money was needed for benefits, the government
simply spent the money, leaving nothing to invest. The government IOUs
held by the trust fund are not at all like regular marketable Treasury
bonds....They are nothing more than accounting entries that tell us how
much the government owes to the Social Security fund. They couldn’t be
sold to private investors even at a penny on the dollar because they have
absolutely no cash value. "

Explaining the need for Bush’s proposed" reforms, "White House
spokesman Dan Bartlett recently put it this way:" After 2018,
the system goes from the black to the red. We have payments
going out that we can’t afford to make."

Americans have grown used to hearing such pronouncements from
authoritative-sounding" experts" from tycoon-funded, right-wing
Washington "think tanks" such as the American Enterprise Institute, the
Heritage Foundation and the Cato Institute. Indeed, so many have come
to believe them, the Los Angeles Times reports, that a "1994 survey found
that more people between the ages of 18 and 34 believed in UFOs than
believed Social Security would exist by the time they retired."

But here’s what Bartlett, Bush and the think-tank spokesmen actually
mean when they say Social Security’s going broke: They mean that the
trust fund has been looted fair and square, that everybody who’s been
paying those increased payroll taxes since 1983 has been successfully
swindled and that the U.S. government need not honor those special
issue Treasury bonds. As Smith writes, it’s a financial "crime against the
American public that makes Enron pale in comparison."

You may be interested to learn, courtesy of David Sarasohn of The
Oregonian, that each and every special-issue bond in the Social
Security Trust Fund bears the following inscription: "The bond is
supported by the full faith and credit of the United States, and
the United States is pledged to the payment of the bond with respect
to both principal and interest." Under our brave, new Republican
dispensation, the "full faith and credit of the United States" could
prove a meaningless phrase. Treasury bonds held by Richard Mellon Scaife,
Japanese banks and the Chinese government must, of course, be honored,
lest the international monetary system be plunged into chaos. But it’s
OK to drain Social Security to pay for Bush’s multimillionaire tax cuts
instead of honoring solemn obligations made to generations of defrauded
American workers and their families. Privatization, then, is partly an
elaborate shell game to distract public attention, partly a utopian
scheme dreamed up by the same geniuses who gave us the Laffer Curve, S&L
reform and the "Dow 36,000" among other economically destructive
"free-market" fantasies.

As for the deluded peasants whose future has been stolen, they simply
made a sucker’s bet and have only themselves to blame.

• Free-lance columnist Gene Lyons is a Little Rock author and recipient
of the National Magazine Award.§ion=Editorial&storyid=102652


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