[Speed Gibson,
Tuesday March 22, 2005 at 6:39am]
Try Reading your own Paper
Our friends on the Minneapolis Star Tribune are back again with another editorial on Social Security. Let me begin by applauding the very civil tone used this time, unlike the previous rants.
They focused on a proposal to raise taxes by "8 percent" and cut future benefits by 8 percent. I'm going to take that 8 percent tax increase to mean 8 percent of the current tax, meaning an additional 1 percent. Somehow, this doesn't seem at all enough. Or did they mean 8 percentage points worth of tax increase? Republicans also often confuse percentages and percentage points the same way, in speaking of private accounts.
But the premise under all of this is that the trust fund is real and it isn't. Taxes will have to be raised further (or other spending cut - fat chance) to "redeem" the "bonds" "held" in the "trust" fund.
This must also the basis of their claim that private accounts "have nothing to do with Social Security's solvency" which of course is false. Look at Chile's experience. Finally there is a twisted inference that private accounts would be funded by public borrowing from the otherwise solvent "trust" fund.
This is why I pound on this trust fund business. It underlies all of the Left's arguments, that given the large "surplus" currently there, only a little tweaking is necessary. But the truth is, every dollar paid out next month has yet to be collected. As the worker/retiree ratio drops from 3.3 to 2.0 over the coming years, a lot more will need to be collected, a lot more than an 8 percent increase.
Eric Black's last article set the real-world rules regarding reform. The Editorial Board should send out for a copy of their own paper before reprinting their fantasy-world view of this important, urgently needed, and overdue reform.
They focused on a proposal to raise taxes by "8 percent" and cut future benefits by 8 percent. I'm going to take that 8 percent tax increase to mean 8 percent of the current tax, meaning an additional 1 percent. Somehow, this doesn't seem at all enough. Or did they mean 8 percentage points worth of tax increase? Republicans also often confuse percentages and percentage points the same way, in speaking of private accounts.
But the premise under all of this is that the trust fund is real and it isn't. Taxes will have to be raised further (or other spending cut - fat chance) to "redeem" the "bonds" "held" in the "trust" fund.
This must also the basis of their claim that private accounts "have nothing to do with Social Security's solvency" which of course is false. Look at Chile's experience. Finally there is a twisted inference that private accounts would be funded by public borrowing from the otherwise solvent "trust" fund.
This is why I pound on this trust fund business. It underlies all of the Left's arguments, that given the large "surplus" currently there, only a little tweaking is necessary. But the truth is, every dollar paid out next month has yet to be collected. As the worker/retiree ratio drops from 3.3 to 2.0 over the coming years, a lot more will need to be collected, a lot more than an 8 percent increase.
Eric Black's last article set the real-world rules regarding reform. The Editorial Board should send out for a copy of their own paper before reprinting their fantasy-world view of this important, urgently needed, and overdue reform.