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. 



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