-By Dan Scott
As I considered a recent article by Warner Todd Huston on Obama’s misquoting McCain over his position on reforming Social Security it raised the issue of when the next shoe will drop on the taxpayer. When George W Bush raised the issue of Social Security reform early on, what was the Democrats response? Here is a brief Explanation of Private Accounts idea:
In the 2004 Debates, George W Bush addressed the issue as a starting point:
In 2004, The LAT recorded the Democrat response: “He is trying to create a crisis,” Matsui said. “The problem today is a manageable problem.” In other words – Do Nothing, there is no problem.
The same response again in 2005: Democrats Blast Bush On Social Security. Of course, we in the conservative community have been discussing these issues forever and with the compromising ineffectual help of Republicans in Congress we are still only talking about it.
Wasn’t this the same response the Democrats had with the Fannie Mae and Freddie Mac (FMs)? The Democrats claimed there was no problem with the FMs and thus stonewalled reform when it could have made a difference, as we see they also made the exact same claims regarding Social Security when Bush raised the issue of reform! Everyone is shocked at the $700 billion proposed bailout of toxic mortgages. It seems the Party of Change is actually the Party of the Status Quo. The receipts for Social Security are dropping every year approaching 2017, the year in which receipts equal outlays. The significance of this is not just Social Security funding but the effect on the budget deficit. This year the budget deficit is projected to be $800 billion due to the slowing economy. Does that lack of forward thinking by Democrats give you comfort in their leadership abilities? Isn’t one of the marks of leadership to be proactive instead of reactive? Based on their track record so far, I would say their leadership is reactive. At this time the Democrats are still opposed to Social Security reform:
Between 2020 and 2042, $3.6 trillion will have to be raised in addition to current Social Security revenue and therefore from general revenue. This means a draw down of national debt by $3.6 trillion over 22 years (possible silver lining). But this is a good news, bad news kind of thing. The good news is politicians won’t be embezzling Social Security trust funds any more beginning 2017. I call it embezzlement since if a CFO attempted to fund a company’s annual operations budget with pension fund money, that person would go directly to jail, there would be no debate. If that CFO tried to claim it was an INVESTMENT as the Democrats have claimed, that CFO would be guilty of the same crimes as ENRON. The good news is the national debt may begin to fall starting 2017 when those IOUs start to be called in, the bad news is since when will politicians spend less to pay the money back??? The good news is by 2042 with sound fiscal management half the national debt could be paid off, the bad news is the annual short fall between Social Security income and outlays in 2042 will be $900 billion a year and climbing. These are the kind of news swings that more fits a manic depressive than of responsible leadership.
The information is widely available to everyone who chooses to see, so the Democrats know this as well. Democrats see Social Security as a money maker and are counting on roping us in like they did with Ronald Reagan, here is the table of expenses and outlays showing 1957 to 2007: Note those net amounts are inflated because they include interest payments on the IOUs they gave (part of the smoke and mirrors hiding the coming financial crisis of Social Security).
So how will the Democrats handle this? Didn’t Joe Biden say it was patriotic to pay more taxes? So that means you are a treasonous SOB if you oppose the government taking more of your money in taxes for more wasteful spending programs, I mean social investments. They euphemistically call this PAYGO. How’s that working for us so far, any return on our trillions of tax dollars (misappropriated Social Security funds) spent on social investments? Name me one. Given the Democrats stonewalling on reform, it’s fair to say they are only prepared to raise general revenue taxes in amounts to match the shortfall in Social Security and rising cost of social insurance programs, not reform the spending in any meaningful way. The left columns of table VI.F9 show how much Democrats are prepared to raise taxes in a knee jerk reactive manner to offset the rising costs of just the Social Security program. The Democrats plan in a nutshell, stop indexing the AMT for inflation (Charlie Rangel said so) and allow the Bush Tax cuts to expire in 2010 (Barack Obama said so). You’ll feel the bite on April 15th 2011 just before it’s time to vote for the next president again so you can guess what the pressing issue will be for that campaign season. If you thought Clinton’s tax hike was bad, then you won’t be thrilled by what the Democrats have in store for you come January 2009 if they get their way.
But…that’s not the whole story, there is also the Medicare Trust Fund to consider (HI Trust Fund or Hospital Insurance Trust Fund). This is why the Democrats are really in a panic to raise taxes and thus the underlying cause of Joe Biden’s ridiculous paying more taxes is patriotic remark. Check out the bad news: the magic years are 2010 and 2019. In 2010, Medicare outlays will exceed receipts plus interest and by 2019 all the IOUs that Congress left in the jar will have to paid back. What does that mean in terms of annual outlay? Go back to table VI.F9 and look at the center and right columns. When everything is combined together, the last year in which the Democrats can count on any of the trust funds bringing in money for their investments in social programs is 2014. That means the crunch is on now to find replacement revenue dollars by using the AMT and expiration of the Bush tax cuts as a stealth means of raising taxes without ever having to take a vote! NO ACCOUNTABILITY, the perfect political out.
I have heard a lot of talk about how there is plenty of blame to go around and that we should pull together to resolve the problem. All this talk of compromise and bipartisanship is how we got in this mess in the first place. Compromise only means stonewalling Democrats have forced Congress to acquiesce to their demands and bipartisanship is the successful outcome of their stonewalling. The question that should be burning in every voter’s mind come November 4th, 2008 is will we hold Democrats accountable for their stonewalling and refusal to reform Fannie Mae, Freddie Mac, Social Security and Medicare? Will we, the voter, allow Democrats to bamboozle us yet again by refusing to do any reform when it could still make some difference? Or will we allow ourselves to be put yet again in the position of crisis management making expedient choices that we ordinarily would never agree to in the first place? Expedient choices like the de facto nationalizing the FMs sticking us the taxpayers with yet another unpaid bill from a stealth redistribution of wealth scheme. Now here’s something to ponder: Does it stretch credulity when looking back on the Democrat’s track record of stonewalling reform of the FMs that maybe it was their plan all along in order to limit our options and thus force us into the choices that more conforms to their agenda? Is a fait accompli the consent of the governed? Do you call that Democracy?
Further Reference Material
Social Security Trustee’s Report
Historical Data tabs F3 & F9 of interest
CBO page with projected outlays
Income Cost, Interest and total accounts
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Dan Scott calls himself a “Member of the Global Capitalist Cabal preaching Capitalism and personal responsibility as the economic solution to world poverty.” He is also a member of the 14th Amendment Society — victimhood is a liberal code word for denying the civil rights of others. He is also a proud member of the Global Warming Denier Cabal, insisting that facts not agendas determine the truth.
Dan can be seen on the web at http://www.geocities.com/fightbigotry2002/ as well as http://www.geocities.com/dscott8186/saidwebpage.htm, And can be reached for comments at dscott8186@yahoo.com.
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