Greenspan's Con Job (lies about Soc. Sec to avoid tax increase on rich)

[papau]

Can we say "IMPEACH Alan Greenspan"?.... Eliminate the income cap of $87,000 on FICA taxes now-call it the rich folk's personal contribution to restoring fiscal order.

Greenspan's Con Job
by William Greider The Nation from the March 22, 2004 issue

<snip>....Then Social Security will be in trouble. And so government must cut benefits now, before it's too late. "I am just basically saying that we are overcommitted at this stage," he explained. "You don't have the resources to do it all."

...a bait-and-switch game on a grand scale -- in which the payroll taxes they paid into Social Security over many years will now be diverted to other purposes, including the generous tax reductions G.W. Bush has enacted for the very wealthy and the corporations...Social Security is not in deficit, not now and not for at least the next forty years. The trust fund will have a surplus next year of $1.8 trillion. In 2011 when, Greenspan warns, the baby boomers will start retiring in large numbers, the surplus will be $3.2 trillion. These stored savings, plus future payroll-tax revenue, are sufficient to pay all retirees the current level of benefits through 2042, according to the fund's very conservative actuaries....the borrowed trillions, in fiduciary terms, belong to the "beneficial owners" -- every worker who has paid higher payroll taxes for the past twenty years.

Greenspan is familiar with the accounting because he was chairman of the bipartisan commission that supposedly "fixed" the Social Security problem back in 1983 by imposing a huge increase in FICA payroll taxes -- extra revenue that produced the still-growing surpluses. This historic tax shift (I think of it as the "crime of '83") was most convenient to the Reagan Administration because Reaganomics had just created huge budget deficits by cutting income taxes for the monied interests and pumping up the military budget. The burgeoning surpluses from the Social Security payroll tax would help offset the economic impact of the deficits. Hardly anyone noticed at the time, since Democrats cooperated in the "solution." Now Bush Jr. has done the same thing. And Greenspan is proposing another "fix": Double-cross the workers who paid the extra trillions; don't disturb the new monster tax cuts delivered to the rich. Any con artist would appreciate the bait-and-switch as a nifty piece of work.

But the epic swindle may yet fail. Politicians, even the right-wing variety, hesitate to close the deal for fear the "marks" -- workers, young and old -- might figure it out. Meanwhile, there's one simple and just solution for any long-term fiscal problems Social Security might face: Eliminate the income cap of $87,000 on FICA taxes so that every highly paid worker, even Bill Gates, would pay the full freight. Since wealthy earners have benefited disproportionately from tax reduction, this would be their personal contribution to restoring fiscal order. Why doesn't someone ask the Fed chairman about that? If Democrats were more attentive to their constituencies, they would be aggressively promoting this reasonable alternative to Greenspan's sordid double talk, attacking him for duplicity and filing resolutions of impeachment. Did the Federal Reserve chairman knowingly deceive Congress and the public? What did the chairman know and when did he know it? Let the hearings begin.

http://www.thenation.com/doc.mhtml?i=20040322&s=greider

[Martin Eden]

1. This is the issue I'm pushing right now more than any other...

...in my attempts to persuade people to vote against Bush.

What it boils down to is this:

The money we've been paying into Social Security our entire working lives is being transferred to corporations and the rich in the form of tax cuts and corporate subsidies.

[teryang]

2. Double Cross

That is a phrase with a ring to it.

[indepat]

3. "Who will tell the people" if not William Greider? Let me say it again:

Greenspan's name should forever live in infamy even should this Republic live another thousand years or more, he should be "properly pilloried for gross mendacity."

[enough]

4. An important issue, forcefully stated.

Thanks for posting this article, papau.

Here is Krugman's discussion of the same scam.
http://www.nytimes.com/2004/03/05/opinion/05KRUG.html?n=Top%2fOpinion%2fEditorials%20and%20Op%2dEd%2fOp%2dEd%2fColumnists%2fPaul%20Krugman

Social Security Scares
By PAUL KRUGMAN (New York Times)

Published: March 5, 2004

snip>

The biggest risk now facing Social Security is political. Will those who hate the system use scare tactics and fuzzy math to bring it down?

After Alan Greenspan's call for cuts in Social Security benefits, Republican members of Congress declared that the answer is to create private retirement accounts. It's amazing that they are still peddling this snake oil; it's even more amazing that journalists continue to let them get away with it. Yesterday in The Wall Street Journal, a writer judiciously declared that "personal accounts alone won't cure Social Security's ills." I guess that's true; similarly, eating doughnuts alone won't cause you to lose weight. Why is it so hard to say clearly that privatization would worsen, not improve, Social Security's finances?

Should we consider modest reforms that reduce the expenses or widen the revenue base of Social Security? Sure. But beware of those who claim that we must destroy the system in order to save it.  

[enough]

5. And another concurring opinion today in the C.S. Monitor

http://www.csmonitor.com/2004/0308/p17s01-coop.html

A brighter outlook for Social Security

By David R. Francis

Federal Reserve Chairman Alan Greenspan warned last week that the nation "will eventually have no choice but to make significant structural adjustments in the major retirement programs."

Translation: Cuts in Social Security benefits are inevitable.

But is the situation that gloomy? A number of economists argue it isn't. A hard look at the numbers suggests that Social Security isn't broken, only in need of minor adjustments.

The Social Security system is in better financial shape than it's been for most of its 67-year history, says Mark Weisbrot, an economist at the Center for Economic and Policy Research (CEPR), a Washington think tank.

Some see a conspiracy on the part of those who don't like the government retirement system.

"When you want to reform a popular system, you have to make the case it's broken," says Lawrence Thompson, a senior fellow at the Urban Institute, another Washington think tank.

more>