SOCIAL SECURITY LIES
AND CONTRADICTIONS

Two from WorkingForChange:

Another fake crisis from Bush's minions

At a staged event to promote his privatization scheme, Mr. Bush recently said that Social Security is going "bankrupt." Yet the government's own projections indicate that the Social Security Trust Fund can pay full benefits until sometime between 2042 and 2052, or roughly half a century from now. Why does he claim to be so worried about a minor financial problem that won't arise for decades, if ever, while he remains unfazed by the threat of global warming?

Permitting private accounts won't resolve those potential funding shortfalls in any case, according to the federal government's own analysts, including the U.S. Comptroller General. The only realistic solution, according to the Wehner memo, is to change the method used to calculate benefits -- and cutting them sharply. Why then would Mr. Bush insist on borrowing $2 trillion or more to finance privatization, thus creating additional debt for the young people whose future checks will also be slashed?

According to Mr. Bush, Social Security will someday break the national budget with unsupportable demands unless his proposals are enacted. Last year, however, he triumphantly signed a Medicare prescription drug plan that -- by the government's own reckoning -- will cost trillions of dollars more than Social Security. Why does he consider that election-year spending program prudent?

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The Free Lunch Bunch

If people are rightly skeptical about claims that Social Security faces an imminent crisis, just wait until they start looking closely at the supposed solution.

President Bush is like a financial adviser who tells you that at the rate you're going, you won't be able to afford retirement - but that you shouldn't do anything mundane like trying to save more. Instead, you should take out a huge loan, put the money in a mutual fund run by his friends (with management fees to be determined later) and place your faith in capital gains.

That, once you cut through all the fine phrases about an "ownership society," is how the Bush privatization plan works. Payroll taxes would be diverted into private accounts, forcing the government to borrow to replace the lost revenue. The government would make up for this borrowing by reducing future benefits; yet workers would supposedly end up better off, in spite of reduced benefits, through the returns on their accounts.

The whole scheme ignores the most basic principle of economics: there is no free lunch.

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