April 28, 2005
-- by Gary Boatwright
Love Brother Bush’s Traveling Social Security Salvation Show has mercifully come to an end. Because Love Brother Bush has been saying a lot of confusing things about Social Security, a lot of tiny brain journalists are . . . well, confused. Let's take a fresh look at how Social Security works just for them.
Programs that are financed through dedicated taxes are considered to be off-budget. Social Security with its FICA tax and Trust Fund is the largest off-budget program in the United States budget. In exchange for the privilege of using the excess FICA payments for general operating expenses, the Treasury Department issues special Social Security bonds to the Social Security trust fund.
In a nutshell, Love Brother Bush is stealing your FICA payments and giving them to Bill Gates in the form of tax cuts. Since Bill Gates needs lots of government welfare to keep Microsoft afloat, Bush is giving him not just your FICA payments, but the FICA payments of millions of other people as well.
The last couple of years FICA payments have been about $160 billion per year greater than the benefits due to retirees. FICA payments have been going into the general fund and the U.S. Treasury has been placing special non-tradeable Social Security "IOU" treasury bonds in the Social Security trust fund. That means Bush's actual deficit last year was actually close to $600 billion, but through this creative accounting gimmick, the budget deficit went on the books at a little over $400 billion.
The reason Love Brother Bush is so upset about this great arrangement, is that according to trust fund rules, someday the loans will have to be paid back to retirees in the form of benefit checks. The bad news is that because of Love Brother Bush’s tax cuts, the government will not have any money to pay retirement benefits, so Bush wants to divert some of the FICA payments going into the Trust Fund into private accounts. That means the Trust Fund will run out of money sooner. Why that is an advantage, not even the evil geniuses at the Heritage Foundation and CATO Institute have been able to explain.
Because Love Brother Bush cannot support Bill Gates in the manner to which he has become accustomed with surplus FICA payments alone, Bush must also give Brother Gates additional welfare in the form of tax cuts from revenue surpluses we don’t have. We are currently paying a little over $300 billion per year in interest on the national debt. Following the lead of supply siders at CATO and Heritage, Love Brother Bush wants to double that number with massive tax cuts for billionaires. In thirty years, nobody has been able to explain how tax cuts reduce budget deficits, but the theory makes Lawrence Kudlow giddy, and that seems to suffice for conservative economic policy wonks.
Astute readers are asking themselves why I am talking about the budget deficit. Let’s take a look at the future deficit chart from EPI. The teeny green box represents Love Brother Bush’s Social Security crisis. The tall blue column represents Bush’s tax cut deficits. To solve the teeny green crisis, Love Brother Bush wants to make the tall blue column about three times higher by extending his tax cuts.
To summarize, the fundamental flaw with Bush's stealth privatization plan is that it makes Social Security’s unfunded liability worse. His tax cuts make the budget deficit worse. To fix Medicare’s unfunded liability Love Brother Bush made it worse by giving a couple hundred billion dollars to Big Pharma. Does anybody detect a pattern here? In the private sector people get fired for fixing problems by making them worse.
The singular goal of all of Love Brother Bush’s economic plans and programs is to make our national debt clock spin like crazy. The faster the clock spins the better. Noted psychologists suspect it isn’ts massive government deficits themselves, but the frenetic spinning of the national debt clock that makes Lawrence Kudlow giddy. There are persistent rumors that Lawrence has been observed chortling madly at his desk while watching the national debt clock hecticly keep pace with Love Brother Bush’s deficit spending programs. Making Lawrence Kudlow giddy seems to suffce as a rationale for national economic policy.
We've covered an awful lot of ground today. One thing to remember about the economic reports you see on television and read in the newspaper, is that tiny journalist brains like Chip Reed and Dick Gregory are not capable of grasping complex mathematical concepts like pluses and minuses. Tiny brain journalists are almost as good as President Bush is at making the simplest economic issues completely unintelligible. Many of them are aspirijng to the exalted and dizzying heights of journalistic and economic malpractice achieved by Joe Scarborough and Chris Matthews.
If you would like to become more economically informed, I suggest your spend thirty minutes a day, for ninety days reading the three best economic blogs on the web:
After reading those three blogs for ninety days, you will have a better understanding of economic issues than any of our tiny brain journalists.
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Tracked on January 23, 2006 3:40 AM
I don't think I formatted the cool national debt clock exactly right, but it works. If you would like a cool national debt chart to add to your comments or blog, visit zFacts and click on Free National Debt Clock.
Posted by: GaryBoatwright at April 28, 2005 8:37 AM
Excellent post, Gary! Hope the 'tiny brain journalists' read it ...
Posted by: Helga Fremlin at April 28, 2005 2:41 PM
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