George W. Bush, the man who brought us a war that is now going to cost $170 billion in this fiscal year and who also signed into law a huge expansion of Medicare with a drug benefit, has backed away from his pledge to oppose all Social Security payroll tax increases.
"So far, no one in the administration has simply stood up and said, 'We will not raise payroll taxes in any way, shape or form,' " said Pete Sepp, a vice president for the National Taxpayers Union, which led a coalition of several dozen groups to write a letter asking for such an assurance.
Meanwhile, the House's top Republican on tax cuts, outgoing Ways and Means Committee Chairman Bill Thomas, warned last week that the White House has hinted that it will accept a tax increase on higher-income families in order to win accommodations from Democrats.
Upper class people helped get Bush elected in the first place. They got a lot of tax cuts from him in his first year in office and have done well as a result. Can't say I feel a lot of sympathy for them at this point. But I fear that the term "upper class", when used in the context of tax increases, extends all the way down to my level of income.
Bush wants to make a deal with the Democrat-controlled Congress on how to once again "save" Social Security.
Social Security could be the first test. Since November, Mr. Bush has said everything should be on the table in the effort to fix the program's finances -- a statement in sharp contrast to his declaration after the 2004 elections that "We will not raise payroll taxes to solve this problem."
I oppose this sort of thing because I want a financial crisis in old age retirement programs to force a big rise in the eligibility date to begin collecting. In a nutshell, since people are living longer they should work longer. We can not afford to have so many people not working, especially since medical costs per retired person are rising so rapidly (as are all medical costs).
Bush's attempt to create private Social Security accounts was a foolish and deceptive proposal that would have made the problem worse, not better. Though his now dead Social Security privatization proposal is small potatoes in the folly leagues as compared to his immigration amnesty and guest worker program proposals. If we to continue to take in any immigrants at all we need to demand that all immigrants are revenue positive, meaning they will pay more in taxes than they receive in benefits. Otherwise they just make an already huge problem even worse.
I also think that attempts to fix the underfunding of Social Security amounts to political grandstanding because Medicare is the far larger problem and Bush has made the Medicare problem worse, not better. Medicare is projected to consume 24% of all federal income taxes by 2019 and 51% by 2042.
Even the debt and deficit numbers you read about understate the size of the current US federal deficit. The audited financials of the US government show a deficit more than twice the officially reported one. Similarly, the cost of the Iraq war is far greater than the amount appropriated for it each year while the war is fought. Joseph Stiglitz estimates the total cost of the Iraq war might be as high as $2 trillion. Among the costs we will pay for in the future: long term care of the maimed soldiers who survive; interest on the debt incurred to fight the war; opportunity cost of pulling people out of the private sector to go fight in the war; and interest on the debt accumulated to pay for the war.
All these hundreds of billions and trillions of costs and unfunded liabilities add up. The United States has peaked as a world power. For demographic reasons (aging population and declining average IQs - and more here) and other reasons we are going to decline as a world power.
|Share |||By Randall Parker at 2006 December 24 01:55 PM Economics Government Costs|