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Borrowing hundreds of billions or trillions for privatizing Social Security?

<![CDATA[The New York Times reports that the White House and Congressional Republicans are “beginning to acknowledge” that giving current workers private investment accounts based on their Social Security payments will require that the government borrow “from hundreds of billions to trillions of dollars over a decade, depending on how much money people are permitted to […]

<![CDATA[The New York Times reports that the White House and Congressional Republicans are “beginning to acknowledge” that giving current workers private investment accounts based on their Social Security payments will require that the government borrow “from hundreds of billions to trillions of dollars over a decade, depending on how much money people are permitted to contribute to the accounts and whether the changes to Social Security include benefit cuts and tax increases.” It would have been good to hear some of the details of President Bush’s plan during the election, but, gosh, it would have been unpatriotic to question him closely.
The “freedom” to invest Social Security revenues in the stock market is not worth borrowing more money; that isn’t freedom, it’s a mortgage our kids will pay off. Just last week, Congress raised the U.S. debt limit to $8.2 trillion, up about 25 percent from the time George W. Bush took office.
The U.S. government has buried future generations in debt, especially during the past three years, and additional trillions of dollars is thoroughly beyond the pale of fiscal responsibility. Alan Greenspan has warned about the burden of deficits on the dollar and a significant increase in federal debt will only come at an increasing cost—the U.S. actually faces the potential for foreign investors to take control of the dollar, just as Asian countries saw their currencies beaten down during 1997 and 1998.
Since George Soros made a lot of the money he spent to depose Bush this year during the Asian currency crisis, there may be a silver lining in all this. But that’s too high a cost for regime change, too.
Thankfully, there is some sense left among Republicans. The Times quoted Sen. Charles Grassley, the Iowa Republican who chairs the Senate Finance Committee: “Anybody who thinks borrowing money for the transition to personal accounts is going to solve the problem of the long-term solvency of Social Security doesn’t understand the size of the problem.”
Alas, Grassley is out of the mainstream, because the mainstream of Republican thinking is completely insane. Senator Judd Gregg, Republican of New Hampshire touts creative bookkeeping that would keep the Social Security-related debt off the government’s books while urging people to see things over the long-term: “You’ve got to look at this as a very significant long-term fiscal policy decision where you’re going to have a loss in the first 10 to 15 years and a significant move toward solvency in the last 20 to 30 years. That mitigates against doing it in the context of a typical budget resolution.”
Seeing the long-term demands having details about how this investment is going to work. As it stands today, the Bush Social Security reform plan looks like a hedge fund prospectus or Enron’s plan for California’s energy markets, short on detail and long on creative applications of accounting. That’s okay, though, because the Bushies expect that the consequences will fall on generations they won’t answer to. In the meantime, the idea of dropping trillions into the stock market plays right into the hands of Mr. Bush’s base, people like Ken Lay.
The recent faddish excuse for these kinds of policies has been that Congresspeople don’t have time to read the bills they pass. Get more Congresspeople or distribute the problem to the people to vote on if their representatives can’t handle the job. There is no circumstance that should justify that excuse when we’re talking about adding to the burden our children will bear into the future. If Congress—both sides of the aisle—and the White House can’t explain what they are doing with our money in detail, providing measurable goals that can be used to assess the early success of any plan as well as the long-term destination, they should be tossed out of office and imprisoned for malfeasance. Maybe executives at companies got away with fiscal murder, but our representatives need to accept that they are accountable for their decisions.]]>