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February 4, 2005

Robber Barons

Posted by Phil on February 4, 2005 1:55 PM

They wouldn't do that, would they? Sam Rosenfeld, TAPPED:

[Pres. Bush, SOTU] So here is the result: Thirteen years from now, in 2018, Social Security will be paying out more than it takes in. And every year afterward will bring a new shortfall, bigger than the year before. For example, in the year 2027, the government will somehow have to come up with an extra $200 billion to keep the system afloat -- and by 2033, the annual shortfall would be more than $300 billion. By the year 2042, the entire system would be exhausted and bankrupt. (emphasis added)

There's a lot of dishonesty packed into that passage, but I believe the word "somehow" was what triggered the initial Democratic grumbling; that word is certainly what provoked me to sputter and scream at the TV screen in rage. The subtext of this "somehow" is, of course, that the Social Security Trust Fund--established through payroll tax hikes in 1983--doesn't exist, and apparently never did.

Though it has some stiff competition, the prospect of a government default on its debt to the Trust Fund is the most brazen outrage of the entire privatization debate. Payroll taxes on working people's wages were apparently jacked up 20 years ago just for the hell of it, and in the ensuing years have helpfully served to finance large income-tax cuts for wealthy Americans. How many Americans actually know what the Social Security Trust Fund is, let alone whether or not it's a "myth," as David Frum said on television after the SOTU and an endless number of fellow conservatives have been insisting for a while now? How many Americans are aware that their payroll taxes were raised on the explicit promise of shoring up Social Security, and that now Republicans are set to break that promise?

"That money's as good as gone anyway," the crooks say. After all, the Trust Fund is "invested" in U.S. Treasury bonds. We might as well have bought swampland with it! Link is to MediaMatters, where we find the eminent Brit Hume fallaciously explaining (emphases MM's)...

On paper, there's quite a lot of money that is in--that is in the Social Security trust fund--that is credited to the Social Security system on the government's books. ... And while the money has been put into government notes, and that is to say, has been borrowed by the government and spent on various things, and therefore does not exactly physically exist in the government's treasury anywhere. ... And that is the money that allows people to say that the system remains solvent for quite a long period of time.

However, that money would have to be -- would have to come from somewhere to be paid into the Social Security system when the moment comes.

Yeah, it "would have to come from somewhere": The government would have to pay it back, just like I'm paying back the loans on my car and my house.

"That is the money that allows people to say that the system remains solvent." As though "that money" is so much rhetorical smoke and we're all a pack of fools. Haven't you heard? Your money isn't actually at your bank! Do we need Jimmy Stewart to give the speech he gave during the run on Bailey Building and Loan? "Your money's not here--it's in Bill's house and Ted's house!"

I know "my money" isn't just a pile of greenbacks somewhere--if it was, the pile would be in my basement. What part of the modern banking system does Brit Hume think we don't understand? And what do they expect the Chinese to do when they find out the U.S. government doesn't even honor debts to its own citizens?

Rosenfeld again:

This is the most brazen Robin Hood-in-reverse scam you can imagine, unfolding over the course of two decades. People ought to know about it.