WASHINGTON (Reuters) - President Bush said on Thursday he would work to convince Congress of the need for spending cuts, tax cuts and Social Security reform in a bid to reassure financial markets he is determined to address huge fiscal problems.
He promised to send Congress a tough new budget next year, saying: “If the deficit is an issue, which it is, therefore it’s going to require some tough choices on the spending side.”
Central to Bush’s policy strategy is the reform of Social Security, which is forecast to begin running out of money as the post-war baby boom generation retires in coming decades.
Although he did not present any specific proposals, the president advocates reforms that allow workers to hold a portion of their Social Security payroll taxes as private investments. He also rejects raising payroll taxes to finance transition costs estimated at $1 trillion to $2 trillion.
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How does this math work out, you ask? It’s simple. I’m no economist, but I’ve played them on stage in several hilarious improv scenes over the years. So I’m pretty qualified to lay this all out for you.
1) A Really Bad Metaphor
First, some background. Social Security isn’t a savings account. It’s not a credit card either. No, it’s a more like a giant treadmill that powers a stereo that plays music to inspire the treaders. The folks on the treadmill? They’re today’s workers. The stereo? Senior citizens, receiving the benefits of the treaders’ work. The inspirational music? It’s a promise, a song about the stereo still having power even after you get off the treadmill.
The important thing here is that there is really no battery. Not a big one, anyway. To keep the music going, we’ve gotta run like psychopathic hamsters. Today’s work pays today’s seniors, and the song tells us that there’s a younger generation training in the other room that’s gonna keep the treadmill going when we get off it.
Yes, yes, when we get off the treadmill we are somehow transformed into a stereo. I know. I said it was a bad metaphor. The point is that the work you’re doing right now is immediately sent out to older folks in the form of Social Security checks.
The other important thing is that there was supposed to be a “battery” of sorts that would store up some of the energy (another metaphor for this that we Americans chose not to buy was “lockbox”). We’ve been tapping that for other things, though, running some cables from it into the next room where they need light by which to spackle the holes in the walls of a room marked “Budget.” Ooops.
2) The Plan
So what happens if we siphon off some of this energy (social security taxes), and allow people to put it into individual retirement accounts for themselves? Well, Gramps is screwed, obviously - he’s relying on the work that’s being done right now. How are we going to keep him comfortable, able to buy the soft food, the bizarre Christmas presents, and the Levitra that has become the bane of Grandma’s existence? That’s the $1 trillion to $2 trillion “transition cost.” That’s what’s going to keep Gramps healthy, happy, and priapic.
So the plan, that we present-day workers put aside our own Social Security taxes into individual accounts, relies on two little details: 1) That we invest wisely and the market never, ever collapses, and 2) that somebody covers that $1 trillion to $2 trillion of lost benefits money over the next decade or so. Anyone have any ideas? Can anyone spot me the cash? Hello? Well, we’ll just have to ask the President…
3) Brother Bush Explains It All For You
Our budget, you might remember isn’t exactly balanced. It is in fact deeply in the red. President Bush is concerned about this, but he categorically rejects raising taxes (Yeah! Fightin’ for the Little Guy! Etc.!). His solution is to “make tough choices on the spending side.”
Tough choices are going to necessary. But where do we make those tough choices? IS there any hope of balancing the budget without raising taxes in the next couple of years, let alone paying down the debt, even without that niggling little $1 to $2 trillion transition cost?
No, no there’s not.
Go ahead, monkey with the figures yourself, over here. Unless you decide to Leave Plenty of Children Behind and stop paying for highways and make government work a volunteer thing and have the President eschew the White House for a Motel 6 for the next couple of years… it can’t be done. Tax receipts are too low, costs are too high…
… and over at the Social Security Gym, people will soon be starting to get off the treadmills to take care of their own futures…
4) Paul Krugman Hates America
Economist, columnist, and America-hater Paul Krugman’s been going on about this for years. He seems to think that the administration’s been doing all this on purpose, to bring us to the point where it’s clear that social programs like Medicaid and Social Security simply can’t be saved and then… cut ‘em loose, survival of the fittest, make Grampa pay for his own Alpo and erections. Paul Krugman is scaring seniors. Paul Krugman obviously didn’t hear the President promising to keep America’s promise to its citizens. Paul Krugman is probably going to point out that the President has started to talk about “tough choices.” Paul Krugman has facial hair, not unlike Osama bin Laden.
But let’s assume Paul Krugman is wrong. It’s a pretty safe bet; he teaches at one of those Ivy League colleges and his name implies that he has not accepted Jesus Christ as his personal savior. So he’s obviously out of touch with mainstream American values, underestimates the power of faith, and can’t see how unsolvable problems can be solved when an ol’ fashioned Texas ranch hand rolls up his sleeves and tackles the hard problems that leave the effete eggheads piddlin’ in their Dockers.
So we’re left with looking at what Bush is offering to us. The way to maintain a strong defense, keep our senior-related promises, fund public education, allow for individual retirement accounts to be siphoned from the Social Security tax, continue to cut taxes in general, and balance the budget. We need to believe in…
5) The Solution
It’s easy. Americans are the hardest working, most ingenious, most innovative, bravest, and most pious people in the world. We believe in God, and Freedom, and Opportunity for all. We have a healthcare system that is the envy of the world, even if the rest of the world won’t admit it. We have the best educational system on the planet, even if other countries’ children tend to test better and earn more degrees. We are a beacon of freedom and democracy worldwide, even if foreigners don’t think so. How are we gonna get through this, Mr. Krugmanbergsteinowitz? Faith. Hard work. Freedom. The American Dream. Thank you, and God bless the United States of America!
Fanny Roborat
34 comments
SeattleDan
December 16, 2004 at 5:30 pm
1Yeah, that Krugman guy,always doom and gloom with him. Why cant he just shut up and love being an American?
tim
December 16, 2004 at 6:11 pm
2Clearly you and Krugman have forgotten the basis of all Bush economic planning, the “Post-Rapture, Who Really Gives A Shit At That Point Dividend”.
Jack K.
December 16, 2004 at 6:18 pm
3[stirring strains of “God Bless America”]
…the solution is simple for an ol’ fashioned Texas ranch hand who has all that thinkin’ time on his hand because there aren’t any of those pesky ol’ cows to get in the way:
1. Institute a compulsory draft with a guaranteed call-up age spanning from 15 to 50 with no deferrments. We round up Iraqis that young and have National Guard troops that old (and older) serving in combat, so this age span shouldn’t be a problem. This addresses so many issues: A) we would then have a huge robust Military that could invade every nation in the Middle East simultaneously without all this fretting about force numbers. B) By reducing the number of school-aged children in the upper grades (having virtually eliminated grades 9 - 12), we can realize tremendous budget cuts to the schools. C) This will drive all those liberals over the border to Canada for sure, and they’re the only ones whining about all those spendy federal social programs anyway.
2. Redefine “senior” as age 80 and over, with everybody else working for the defense industry making all the goods our newly expanded military needs. This will not only take many people off the SS rolls by turning them into productive salary-earners, but also most of these major players in the miltary industrial complex have superb health care plans (say goodbye to Medicare) and retirement plans (even further reducing the SS burden….
…solutions are out there, and robustly righteous, God-fearing men like Gee Dub, with ample prayer and reflection and diversion of the press’s attention to another Scott and Lacey-type trial, will find them…
[/stirring strains of “God Bless America”]
Murray
December 16, 2004 at 7:20 pm
4It sure is handy to have a faith based reality, no pesky facts to get in the way. Just like Reagan who cut taxes, raised spending and assumed that the deficit would magically go down, W is a true believer. (Although Reagan was demented, - hmm.. come to think of it, they have that in common too).
The only down side is that eventually the Chinese and other foreign investors who keep our economy propped up will acknowledge we are dead beats and pull the plug, sending us into an Argentina like crash. When gasoline cost $5 a gallon and a new digital camera goes for $3000 it will probably get the public’s attention.
Sorry, I’ve been reading Krugman too much.
Chris
December 16, 2004 at 7:41 pm
5I agree, Murray. Or, I would like too.
Unfortunately, the “just wait and eventually they’ll run themselves into the ground/the movement will implode/the people will catch on” strategy won’t work in this case. I keep imagining it will, but that 9/11 glow that sustained the neocons for so long still has enough energy to keep weak Democratic candidates out of office.
I’m pretty sure that, left to their own devices, they would eventually run themselves into the ground, but in the meantime they’re taking us down with them! Dammit, we need action, we need intelligent, GOOD people running things. We need new ideas! We can’t afford to wait.
Whew.
Ken, Just Ken
December 16, 2004 at 7:43 pm
6I think the “plan” also includes having the Republicans lose the next presidential election so that a Democrat can come in (a la Clinton) and do all sorts of tax raising and spending cuts for 4 to 8 years and have the Dems look like the bad guy.
I really thought Bush had made things bad enough in his first term to cause this, but apparently we’re gonna have more of a pendulum upswing to the right the Dems are going to have to come in and fix things again.
Bob
December 16, 2004 at 8:57 pm
7And if by some miracle a Democrat does win the White House in 2008, watch out for 2011. That’s when the “death tax” rollback expires. By Republican accounts, failure to renew a tax cut is tantamount to passing a tax increase. Nice little landmine for the lucky winner.
By the way, if it’s really a death tax, what happens if I refuse to pay it?
G Money
December 17, 2004 at 12:00 am
8Damn it. They totally got us this time, guys. Got to hand it to them - they got their stuff together.
Well, there’s really only one question we can ask ourselves at this point - what would George Lackoof do? He’d tell us to know our values and frame the debate: we know that when we next get into office we’ll have to raise taxes, because the Republicans won’t. Like you guys said, they want social security, welfare, public schools, libraries, etc to die. (Well, at least the ones at the top of their economic and political food chain do). With that in mind, let’s start preparing. We have to get it in the heads of the american people that paying taxes is a good thing - an adult responsibility that allows us to be the great nation that we are today. Commercials showing roads with potholes being fixed, kids being able to go to libraries, etc. can all ingrane a sense into the american public that paying taxes is responsible, and lowering them is reckless and immature - not characteristics of a good politician. If we prepare now, less americans will mind when we have to raise taxes in the future. If we don’t, we lose again.
Tom
December 17, 2004 at 12:18 am
9Oh Adam, I love how you’re so subtle.
As for informing the public about the good of taxes, I’m going to head over to the cynic’s corner and have a cry. People are generally not very bright, and probably won’t understand these kinds of things for a good many years later. By that time, who knows how screwed up our nation will be.
hedera
December 17, 2004 at 12:18 am
10The trouble is, maybe Americans now DON’T want to pay taxes for services, or have you not read about Salinas, CA, the former home of John Steinbeck? The city library is closing in the next couple of months. Boarding up the buildings. The city is in debt; the citizenry failed to pass the tax measure needed to keep it open; bye bye, library. As the holder of a not very recent M.L.S. (and I got out because librarians are the least paid and the first fired), I find this depressing. And it isn’t just the library in Salinas; in the last couple of years (quoting KQED’s California Report this AM), the citizens of Salinas have turned down tax measures to (a) keep the ER open in the local hospital, and (b) keep paramedics on the fire trucks. If they won’t pay for health care and emergency services, you can see where mere literacy wouldn’t have a chance.
chrisanthemama
December 17, 2004 at 1:09 am
11And direct from the soon-to-be-history Salinas public library:
“Carla Lane, browsing the stacks with her two young daughters, said that if the libraries have to close, that’s too bad.
” “We come here all the time, my kids love it, and I’m a big reader myself, ” said Lane, picking out an armload from the new-fiction shelf. “But I’m not sure the money is always being spent wisely.
” “I can’t believe that everything has been exhausted,” Lane said. “If they have to close, so be it. Maybe they can just open one day a week.” ”
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/11/20/MNGG49U VF51.DTL
Stupid ungrateful wench, with her big armful of new fiction. Steinbeck’s *whirling* in his grave.
Sharon
December 17, 2004 at 9:01 am
12People, people, calm down! What you liberal commie symps fail to realize is that in the absence of the nanny-state, private enterprize will quickly step in to fill the voids in libraries, EMTs, fire fighting, etc.
What? What’s that you say? The school-for-profit model has consistently failed? Nobody believes that libraries can be run on a for-profit basis? The house next door caught on fire and it spread to your house, because the neighbors hadn’t paid their local fire department subscription this year? Well, that’s clearly the fault of all us folks in the reality-based community. We just don’t have enough faith in the free market to solve all problems. But Our Leader is going to take care of all that. Trade deficit? People need to buy more American goods. Problem solved. See how simple it is?
Rusty
December 17, 2004 at 11:20 am
13Tim and Sharon have it all figured out.
The cons (nothing neo about them) believe that our days are numbered so why care about a world that has been billions of years in the making? Remember James Watt, Reagan’s Interior Secretary? When asked by Congress about conservation for future generations he said:
“I do not know how many future generations we can count of before the Lord returns.”
–James Watt, February 5, 1981
The cons are clearly non-reality based #^@%wits. Rationality won’t sway them. You gotta go for the emotional.
Sharon’s got the other side of their personality nailed. The cons hated FDR because he put people to work. Private enterprise would not hire people during the depression so FDR started works projects that hired people directly. The capitalists have never stopped seething over the loss of money and power this meant to them. One of FDR’s remaining hallmarks was Social Security, a safety net that kept many from starving to death in the 30’s.
Bush has no intention of saving Social Security. His goal is to undo FDR’s legacy (and maybe the legacies of others?). Notice that he wants to “privatize” it. That is a code word for “we blue bloods are going to take back what the Democrats stole from us, even if it was for the good of the people and the nation.”
I’m telling you all, the election was lost but the war is not over. Keep up the fight. Write to your representatives. Keep writing to newspapers. Organize NOW to kick some conass during mid-terms!
Condi
December 17, 2004 at 11:25 am
14But don’t you guys see? Adam already gave us the answer. We Americans believe in God (do we??) and we must be His favorites - cause Our Fearless Leader told us so - so the whole point is moot. God will come down from heaven and save us all. I mean He’s got to be pretty rich by now and maybe he’ll give us a really low interest loan payable over millenia. I mean He can wait for payment too, right? So if we follow the rules and be good it’ll all be okay, but maybe we could get some room on this ‘thou shall not kill’ clause. I mean killing pagans is alright isn’t it - they can’t be human cause they don’t believe in our God. So you see? It’s all solved. No need to worry.
Tom in Santa Clara
December 17, 2004 at 11:28 am
15The situation in Salinas is disgusting! I spend most weekends in beautiful Monterey County and I’ve seen the increasing gap between the haves and have nots (agricultural laborers).
The hospital tax that didn’t pass would have insured that the County run hospital would have funding. That’s the place where the agricultural laborers go. They’re the ones who don’t vote.
Perhaps its just the bleeding heart liberal part of me that thinks this, but societies have a call to insure a basic safety net for everyone. Part of this insurance contains a responsibility of public officials to spend tax money wisely, not inflating their wages, not eating from the trough of huge overtime pay (like we see in so many cities and counties now), and seeing that the basic needs of citizens are taken care of. Its when those things are not done that we see the resultant crime, gang violence, random acts of not good stuff…Salinas is full of them in certain areas of the city….wonder why?
Olde Mother Felber
December 17, 2004 at 11:53 am
16Can’t speak for any unseasonably lusty Gramps, darlin’, but am nevertheless getting very nervous about your comments about the ancient as I sit over here on the borders of “… soft food, bizarre Christmas presents…” land.
You didn’t like your singing Moose last year?
Or the cat box that played “What’s New Pussycat?” every time Horatio got into it? (with oregano scented kitty litter included, no less.)
You should have said something then.
Hey. Blame everyone (I do) but keep your slurs offa the aged, eh? All they ever done was to keep on breathing.
Grumpily,
rapidly aging mama
Bob
December 17, 2004 at 12:14 pm
17I *like* the bizarre Christmas gifts. Those singing bass wall plaques may be the purest expression of that robust, I-don’t-care-if-it-makes-any-sense, can-do Americanism that got us where we are today. And the fish isn’t a bad singer.
Amber
December 17, 2004 at 1:34 pm
18>…but societies have a call to insure a basic safety net for everyone….
Dan
December 17, 2004 at 2:16 pm
19Democrats and Repebulicans can take pride in creating endless “well-intended” programs that drive our budget deficit and national debt. Both parties have contributed their own brand of fiscal malpractice. But hey, how bad can it be?… I have an Ipod. The real problem is creating programs such as Social Security, the new and improved Medicare with drug benefits, corporate welfare, and thousands of other pork barrel programs designed to keep the office-holder in power. None of these programs are actuarially sound regardless of who runs the numbers. Why? Because they are not intended to be fiscally sound. They are intended to secure votes in the next election. Fiscal reality is for some other sucker to deal with. Both parties put us in this mess and neither party is acting in a responsible manner. Until we stop pointing fingers and begin taking personal responsibility for our own actions we are all heading for a collective disaster. Now, isn’t that a happy thought? What federal/state program can I apply for to seek counseling to deal with my mental anguish?
There REALLY are very difficult decisions to be made about our future. I just don’t think it happen anytime soon. Anyone have 99 cents so I can download an I-tune?
Sharon
December 17, 2004 at 3:12 pm
20One thing that the faith-based wingers refuse to accept is that there is such a thing as the Common Good. I could be richer than God, but unless I am willing to live in a bubble for the rest of my life, I still have to breathe the same air as everyone else, and air pollution knows no state or national boundaries. I still have to drink the same water as …. oh, well, never mind… I think we got suckered into buying designer water years ago. I still have to drive on the same roads to get from point A to point B. If my neighbor’s house catches fire, it hardly matters that I paid my private fire department and they didn’t–my house is still in jeopardy. If there is a TB epidemic in my city, I’m at risk, too, unless I am willing to live in aforesaid bubble. The list goes on….
But never mind. The Free Market is God. The Free Market will take care of everything.
Dan
December 17, 2004 at 4:00 pm
21The issue of common good is addressed in all economic models. Most differences in opinion rest in the degree to which the principle is applied.
tess
December 17, 2004 at 9:12 pm
22Excuse me for asking this, but isn’t the free market what ultimately lead the Dutch to bid up the price of a single black tulip bulb to several krona back in the 1600s, only for the flower market to collapse into an economic mess of epic proportion? Over a stinking flower bulb?
God bless the free market!
hedera
December 18, 2004 at 12:54 am
23I’m right there with Tom and Amber on the safety net. It never ceases to amaze me that all the neocons, who claim God is on their side etc. etc., don’t seem to hear the injunctions in what they claim is their religion to take care of the less fortunate. On the economic side, if you have more than enough (and many of us do), the principle that what goes around comes around should impel you to share some of what you have. Someday it may come around to you.
hedera
December 18, 2004 at 1:37 am
24I have to post this. I have to. I went to the “Word a day” site to see what today’s word was - it was calvity. (Means baldness - did you know?) But at the bottom of the page was this, labeled X-Bonus:
During times of universal deceit, telling the truth becomes a revolutionary act. -George Orwell, writer (1903-1950)
Here’s the link:
http://www.wordsmith.org/words/today.html
hedera
December 18, 2004 at 1:39 am
25And yesterday’s X-Bonus was even better:
Whenever ‘A’ attempts by law to impose his moral standards upon ‘B’, ‘A’ is most likely a scoundrel. -H.L. Mencken, writer, editor, and critic (1880-1956)
Mark that site! Here’s home:
http://www.wordsmith.org/awad/index.html
Lindsay
December 18, 2004 at 6:48 am
26This is slightly off-topic, but you’re a smart bunch so I’d like to run it by you…
Does anyone else have vague memories of actual conservatives, or is it just me? It seems to me that there once were real conservatives, and then starting with Reagan you have the era of neoconservatives….the difference being, conservatives have a way of looking at things that actually makes some sort of logical sense even if I disagree with it (ie reduce social programs in order to free up money for tax cuts and minimize government involvement in people’s lives), whereas conservatives live in Bizarro World (ie privatize social programs, cut their government funding, raise the funding for everything else, cut taxes, and then wonder why the deficit is so high).
I suppose it doesn’t matter, really, since conservatives seem like a dying breed- the neocon stranglehold on the Republican party has ensured that anyone who has both integrity and a functioning brain is squeezed out of anything important. But maybe if you folks could convince me that conservatives WEREN’T a legitimate political force before they were devoured alive by the self-serving space aliens known as neocons, I would stop fantasizing that John McCain had been elected instead of Bush.
PS Also, while I’m clearing the air, I feel this involuntary urge to commit acts of violence when I hear the nickname “Dubya.” Also when I see those little “support our troops” ribbons on people’s cars. Thanks for understanding. I wonder if there’s a 12-step program to help me cope with this?
sally, mutant
December 18, 2004 at 6:48 am
27It’s hard work dismantlng the New Deal and the Great Society.
I offer an urgent suggestion that I have not noticed in the postings about the current proposals:
Sidewalks! How dare upper-middle class and even richer people pay taxes to provide for and maintain sidewalks. For citizens to walk on! It’s as socialist as libraries.
Sharon
December 18, 2004 at 3:38 pm
28I’m right behind you Lindsay. If you find one of those 12-step programs, let me know immediately.
hedera, I, too, have noticed that Anu at A.W.A.D has been dropping these highly relevant quotes into his daily postings for quite a while now, going back almost to 2000, bless him.
To get back to the question of the free market and Christian principles for a moment, they are in fact related and not contradictory, at least not in most neocon minds. The way it works is this: the reason Christians cannot do their duty to care for the sick, the suffering, the homeless, and the hungry, is that the government takes so much of their money in the form of taxes, that they don’t have enough left over to do their Christian duty. Furthermore, when the government conducts secular, non-denominational social services, it infringes on their (Christians) territory. So government evil comes from both directions. If we cut taxes and get the government out of the business of providing a social safety net, Christians and the free market (is that becoming redundant now?) will fill in the gaps. That, at least, is the theory as I understand it.
The fact that it’s never worked before is just more proof that us reality-based folks just don’t have enough faith.
Who was it who said that a “just society” is one that, if you were dropped into the middle of it with an even chance of finding yourself in any given position in it, that you would be all right–you’d survive and thrive. By that standard, the US certainly does not qualify.
Thompson
December 19, 2004 at 8:47 am
29Lindsay, there’s a twelve-step program to help you get past your rage.
First you step on their stomach, then you step on their head, then you step on…
Hey, I didn’t say it was -constructive-…
Aw, carp. And just to stay on target, I remember a column by Dave Barry ages ago. He said there were three types of people you shouldn’t trust. People who want you to give them money, people who claim to be working for God, and people who say they’re working for YOUR best interest.
Apply to current situation and discuss.
Dave
December 19, 2004 at 4:57 pm
30Lindsay, next time you see a “Support our troops” bumper sticker ask them if they’ve sent a book, care package or letter to a soldier in harms way.
Just in case any of you would like to truly support our troops booksforsoldiers.com will list soldiers in the combat zone and what books or personal needs they request.
Bruce
December 20, 2004 at 9:21 am
31Murray’s scenario is rosy indeed! Gas only $5 a gallon? Bush never studied history, especially French history (he may have been “distracted” at the time). In 1789 Louis XIV’s reckless spending finally caught up with his grandson. With his credit dried up from his borrow-and-spend method of state finance, he desperately turned to the despised People. The result of THAT family’s mismanagement was regicide, chaos, warfare and dictatorship for the next quarter century. Strangely, God didn’t come down to save them from their stupidity. But Bush didn’t study history…
Johnnyboy
December 20, 2004 at 9:50 am
32You know what America’s fundamental problem is ? Too much democracy. I’m not kidding. A democracy, to properly work, depends on a relatively informed, relatively wise populace - and these conditions are not quite met here, I’m sorry to say. In these conditions, using the ‘people’s will’ to run every aspect of public life is borderline suicidal. Asking people to approve budget measures like Salinas’ ? Geezuz, whoever heard of people voting to increase their own taxes ? People electing their own judges ? Fer chrissakes, are you people stupid ?
The idea is to elect a government that is reasonably intelligent and responsible, who can be trusted to take care of budgeting, nominating competent officials, etc… without having to ask the people’s opinion at every goddamn turn. The problem with Americans is that they trust themselves more than they trust their government. Well congratulations, look at the great system you’ve got yourself now.
Landis
December 21, 2004 at 1:56 pm
33Uh, last I checked - at the federal level this is what we do. With the minor exception of electing the politicians who are more beholden to corporate donors than they are to the people.
Queen to be Kate Middleton
December 27, 2004 at 7:42 pm
34I just love your website! Im the one who keeps coming back every day. Best, Kate Middleton Queen to be Kate Middleton