Monday, April 11, 2005

Social Security Shell Game

The efforts by President Bush to highlight the "crisis" in Social Security financing has been in the headlines recently. According to Bush and friends, there is a pending crisis in Social Security that can only be solved somehow by investing in "private accounts," courtesy of the government, of coarse.

Last time we had a "crisis" in Social Security, the government raised taxes and the retirement age (yes, the new age is 67 not 65 any more). The result was not only solvency of the program, but the run up of huge surpluses that now reside in the "trust fund." Naturally, the government spent every penny of the trust fund, so all we have is a bunch of house from Uncle Sam in a file cabinet somewhere in Washington.

In my opinion, Bush should leave FICA alone and focus on Medicare, which is a real crisis. Thanks to the recently enacted prescription drug benefit, Medicare is bound to be unable to pay its obligations in only a few years. Social Security, on the other hand, is solvent through 2017. Let them raise taxes in 2018 to bail out FICA. If they raise them now, they will only increase the surplus and associated "trust fund" while spending all the money on unnecessary items and waste it away. Let the American taxpayer keep his earnings until its needed to pay seniors their due. In the mean time, let Bush ask for a tax increase if that's what he needs.

At least lets be honest about it.