The Sky Is Falling (again)

The latest annual report from the Trustees of the Social Security system can be read two ways: 1) the situation is unchanged from a year ago or 2) this is the Administration’s last chance to undermine confidence in the country's two most important domestic programs.

Guess which version the Bush officials involved picked?

These folks have been advocates of privatizing Social Security for years. However, they are steering carefully around that one in these times of falling stock markets and failing financial companies. Temporarily denied their favorite prescription, they’re stuck uttering gloomy and portentous sentences about America’s future and offering no remedies at all.

The same Administration that turned federal budget surpluses into disastrous deficits is preaching to the rest of us about the dire consequences for the federal budget when Social Security turns from a net buyer of treasury bonds into a net seller. This is not because someone else won’t buy the new treasuries issued to pay back Social Security’s bonds. Obviously, as long as the credit of the United States stands, that is surely what will happen. It is because at that point it will be harder to hide the true operating deficit of the government. And we know how antsy this Administration gets when the people know too much about what is going on.

Anyway, it’s hardly news that we need more cost containment mechanisms in Medicare – things like bulk purchases and price bargaining by the government. Things, in fact, often opposed by this crowd. We also need some minor tinkering with Social Security; we definitely do not need to abandon the basic sound ideas behind it. Bear in mind that even after all the bonds held by Social Security’s trust funds are spent, the program will still take in enough every year to cover 78% of benefits – even if we do nothing at all.

But hey; none of the administration comments are meant to build real solutions to the actual problems. It’s apparently just about seizing that last chance to cap eight years of attacking the very concept of social insurance with one last gasp of criticism – one last chance to scare the public.

 

 

Comments

[byard pidgeon]

I watched part of the SS and Medicare presentations, in full and rapturous admiration of the Trustees' ability to speak in absolute agreement, and the lack of any critical commentary or questions from the audience...perhaps that's why the panel was held at the American Enterprise Institute?
One also has to admire these Captains of Freemarkets, as they stand, resolute and proclaiming their faith, on the bridge of their sinking ship.