FROM GREENSPEAK -- AGAIN
By: Ed Henry
The timing was perfect. Washington's answer to Professor Irwin Corey delivered the same old tired and untrue story of a baby-boomer crisis looming on the horizon and about to wreck havoc on the Social Security system unless something is done soon.
Again, the story is that there are 76 million boomers born after 16 million servicemen returned from World War II in late 1945 and, although it is never stated so, the implication, propaganda, or whatever you want to call it, is that this horde of births between 1946 and 1965 is somehow unusual that it represents births above normal.
This simply is not true, but the media and the general public eat it up. Imagine, if these lusty servicemen had fostered that many children in America it would have amounted to an average of five kids each. And that's above the normal rate they would have had anyway which I think was around 2.5 children per family at the time. How many families do you recall with more than 7 kids prior to 1965?
What's more, if there were any truth to this exaggeration it would have shown up as a tremendous peak in the school system, the labor market, the housing market, car sales, and dozens of other places from 1965 onwards. Such major peaks do not exist.
This doesn't mean that there aren't some baby-boomers or births above normal, but it does mean that the true figure is closer to 7 or 8 million births above normal in that time period. Something any good insurance program like Social Security, which should have 147 million premium payers today, can handle with minor adjustment.
More than likely, having Monica Lewinsky on his mind slick Willie Clinton probably missed a decimal point in his notes or on his monitor when he first delivered the news that 7.6 million baby-boomers required that we "fix the roof while the sun shines." And, without checking census figures, the media took it from there (see for yourself).
Now, Alan Greenspan wants people to prepare to work longer. Like good sheep we should all yield more wool for farmer Jones by continuing to pay taxes a few more years before retiring.
This is not only an asinine solution from someone who has been literally robbing our retirement payroll taxes since 1983 ($98.7 billion in 2001, $89 billion in 2002, and $82 billion in 2003 with declining employment) but it's not the only solution. How about raising the cap on payroll taxes to incomes of $100,000 or for that matter $200,000 per year or just get rid of caps altogether and put in a sliding scale of decreasing benefits for the wealthy who don't need them anyway. It's also a dumb introduction to George W. Bush's intended "personal accounts" which he is, no doubt, about to deliver at the Republican Convention this week.
Bush had tremendous success with the younger generations by whispering something about personal investment accounts during his 2000 campaign. With all the trouble he's in now, it's time to bring this off the back burner again. Don't count on anything meaningful. Greenspan is just providing the introduction.
The truly sad part of it all is that no one, absolutely no one, will ask Bush or any politician how the Social Security trust fund became 22.3 percent of our horrendous national debt as well as whos going to redeem this debt that now amounts to more than $1.6 trillion.
Even more important, the solution is now, was then, and ever shall be stop stealing the money. Once that is done, the choices are only two.
One: Return the excess payroll taxes that the federal government has been stealing under the pretense of "borrowing" or "investing" it since 1983. This can easily be done in the form of a payroll tax reduction that would immediately put cash in every worker's pocket and stimulate spending which, in turn, helps the economy. If Social Security ever has a future shortfall, the money to pay benefits would have to come from other taxes or borrowing which is exactly the position we're now in anyway. Bush has given tax cuts to the wealthy, but nothing for the little guy.
Two: Put the excess in a real trust fund similar to the government's own Thrift Savings Plan and elect someone in the private sector to manage it. We know that we can't trust the government to manage it and there are good investment houses like TIA-Cref that specialize in bringing in an average 17 percent return. Even our own government turns their Thrift plan over to Barclay Bank of Great Britain. Besides, private sector people are not above the law and can be punished for malfeasance.
Anyone who has ever legitimately worked in the United States already has a
"personal account." Even if you avoided or refused to pay income taxes, every
employer you worked for sent the Internal Revenue Service a W-2 form in your name. It's
those records the Social Security Administration uses to figure your retirement benefits
and any private sector investor would need those records of your contributions so we can't
leave the crooks out entirely but it certainly cuts their wiggle room.
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."
Ed Henry can be reached at email@example.com
Ed's FREE pamphlet-"To The Moon, Alice" the national debt, your Social Security, and the Pay-It-Again Sam scam.
We also invite you to visit his website at www.uncle-scam.com
Published in the August 30, 2004 issue of Ether Zone.
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