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Impeach George Bush
SOCIAL SECURITY CURE
You won't find it plastered in the headlines, but there is an easy - even obvious - cure for the Social Security Blues: TAX THE INCOMES OF WEALTHY AMERICANS JUST LIKE POOR AMERICANS!!!
Source: Daily Howler, 2005-02-06
Candidate: Big Government
DON’T ASK, DON’T TELL!
Can we “save SS” without private accounts? The New York Times buries a bombshell:
FRIDAY, FEBRUARY 4, 2005
DON’T ASK, DON’T TELL: Good grief! As everyone knows, the SS trustees project a $3.7 trillion funding shortfall over the next 75 years. And ever since his 2000 run for the White House, George Bush has said that this “crisis” can only be solved by the use of “personal retirement accounts” (and yes, that was the term he used, even during Campaign 2000). But what other changes to the current system might wipe out that funding shortfall? In this morning’s New York Times, Edmund Andrews offers a bombshell:
ANDREWS (2/4/05): Some Republicans have even gone so far as to suggest the one approach Mr. Bush DID NOT MENTION in his speech, RAISING THE CEILING on income subject to payroll taxes, which is now about $90,000 a year. The idea appeals to some politicians because only about 6 percent of Americans earn more than $90,000 a year.
IMPOSING SOCIAL SECURITY TAXES ON INCOMES OF UP TO $200,000 WOULD COME CLOSE TO ELIMINATING THE ENTIRE ($3.7 TRILLION) DEFICIT.
Good grief! What a bombshell! If Andrews is right, raising the ceiling to $200K would virtually solve the whole problem! And make no mistake: Few Americans have ever heard such a thing. Almost surely, Andrews’ editors placed this news where Times readers could barely miss it!
But if you found yourself thinking such thoughts, you don’t understand modern media. In fact, the quoted passage is paragraph 25 of a 26-paragraph report in this morning’s paper. If Andrews is right, this is major information-news that Americans should understand. But Andrews’ article doesn’t concern possible SS revenues increases; instead, it discusses four different ways the government could tackle that deficit by reducing SS benefits. The bombshell we’ve quoted involves raising taxes, something Bush has put off the table. So it rates footnote status at the end of this piece. Few readers will even see it.
Is Andrews right in what he says? We don’t know, because modern media rarely provide any real information, even about the day’s leading issue. But how could that deficit be addressed without resorting to private accounts? If you’re rational, you’ll see that this is an obvious question-and you might even think that our major papers would have explored it in detail by now.
But alas! Our major papers stare into air, failing to provide even basic information about a topic Bush has discussed for five years. How might that deficit be addressed without resorting to private accounts? Yes, you’re right, it’s an obvious questions. And our hapless newspapers-inert, lazy, shiftless-stare into air and ignore it.
Indeed: As we’ve noted several times in recent months, if you want information about SS, you have to turn to editorials, not to news reports. Today’s Washington Post gives another example. The Post scolds “Bartleby Democrats” for refusing to offer their own plans for addressing that revenue shortfall. In the process, the editors write this:
WASHINGTON POST EDITORIAL (2/4/05): In fact, there are responsible ways, consistent with Democratic [Party] principles, to "fix" Social Security, but elected Democrats have tended to run from them as if they were leaking vials of anthrax.
A plan by Democratic economists Peter Diamond and Peter Orszag features a thoughtfully calibrated combination of tax increases and benefit cuts-meaning that no Democratic politician wants anything to do with it, even though the Diamond-Orszag plan would make the system more progressive and put it on a sustainable footing even beyond the traditional 75-year horizon.
Wow! But how exactly would that plan work? Needless to say, it’s almost impossible to answer that question by reading our leading newspapers. According to Nexis, the Post’s news pages have described this plan just once, in a tiny, unsigned presentation on January 2. The New York Times has given the plan one paragraph, in a report on January 10.
How could Congress address that projected deficit without resorting to private accounts? It’s the most obvious question on earth. But today, Andrews’ bombshell rates a passing mention, way down in his penultimate paragraph. How are Americans supposed to judge the wisdom of the Bush proposal? As usual, our big newspapers stare into air, unwilling to present the most basic information.
Can you read between the lines? Papers to public discourse: Drop dead.
In their seminal book, The Phony Crisis, Baker and Weisbrot claim that the 75-year shortfall can be eliminated by a modest hike in the payroll tax-a hike “which would still leave future generations with an after-tax wage far higher than that of today’s employees.” To state the obvious, newspapers should be reporting the range of ways in which that shortfall can be addressed. But modern scribes like to stare into air.
IT’S SO EASY: While we’re on this general topic, let’s see how Baker and Weisbrot approach it. How easily can Social Security be made solvent? What follows is the kind of analysis that the Bruce Mortons (and the Aaron Browns?) always seem to deep-six. Remember-Baker and Weisbrot were writing in 1999. They refer to the standard, 75-year SS shortfall projection-a projection which, as they note a bit earlier, is based on conservative assumptions about economic growth:
BAKER/WEISBROT (page 24): [E]ven that shortfall, which may never materialize, is hardly anything to worry about. If we were to ignore the problem completely for the next 13 years and then fix it by the most politically drastic means-raising the payroll tax-future generations would not be greatly burdened.
For example, an increase on the payroll tax of ONE-TENTH OF ONE PERCENT EACH YEAR (SPLIT BETWEEN EMPLOYER AND EMPLOYEE), beginning in 2011 and continuing until 2046, would close the gap.
This would still leave future generations with an after-tax wage far higher than that of today’s employees.
For example, the average worker in 2030 would have an after-tax wage that is 28.7 percent higher than today, in real (inflation-adjusted) terms. Without these payroll tax increases, that employee would have an average wage 30.7 percent higher than his or her counterpart of today.
Baker and Weisbrot discuss raising the rate of the payroll tax, not eliminating the “ceiling” on income to which it applies. But note the general shape of their argument. Krugman noted how easy it is to make SS solvent through the next century. In this passage, Baker and Weisbrot make the same general point. But typically, this type of info is missing-in-action when the “liberal” press corps discusses this topic. Morton knew not to go there last night in crafting his absurd, fake report.
Again, is this what Andrews means in that highlighted sentence? Did he mean that, according to analysts like Baker/Weisbrot and Krugman, the whole solvency problem could disappear with an adjustment in the payroll tax ceiling? Here at THE HOWLER, we simply don’t know-and neither do the Times’ other readers. We do know this: Analyses like that of Baker and Weisbrot are routinely ignored when the Mortons “report.”
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User Originated Comments:
From: Linda
2005-02-06 18:40:30
life rule #1: people will believe what they want
to believe.
case in
point:
kos
2/6/05
we have a
situation where the number of people on social
security is going to double. people, rather than
living 15 months, are going to live 15
years.
tim's referring to the notion that
because life expectancy was much lower in 1945,
people only lived long enough to get 15 months
worth (of social security). as i explained
previously:
um, timmy? no. there's a
difference between life expectancy at birth, and
life expectancy at 65. according to the folks at
the ssa, for the cohort of people who turned 65 in
1945, 53.9% of men and 60.6% of females survived
from age 21-65. and, for those who made it that
long - survived until 65 - on average males lived
until they were 77.7 and females lived until they
were 79.7.
one month later, and timmy
still can't get his facts straight.
or
maybe he just doesn't want to.
my father,
who was born in 1916, has been collecting social
security for 24 years, and will be collecting for
many more years to come. life expectancy, right.
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