Los Angeles Times Editorial on Social Security, December 20, 2004....
President Bush is setting out to convince the nation that the danger is imminent and can be addressed only with bold action. Sound familiar?
The White House is deploying the strategy it used to sell the war in Iraq to sell its plan for partial privatization of the Social Security system.
The intelligence might not be as flawed, but the spin is equally disingenuous. If no changes are made to Social Security, according to the latest educated guesses, the program will not be able to pay out all its commitments by 2042. But it's absurd for Bush to equate this long-term actuarial shortfall — which could change dramatically over the years — with real deficits that make financial markets wary.
That didn't stop the president from doing it at a two-day economic pep rally he hosted in Washington last week.
The assembled discussion panels also offered sometimes conflicting narratives tailored to the Bush agenda.
Some said trial lawyers and their class- action suits were placing the United States at a competitive disadvantage, while others hailed the chief's tax cuts as the reason the nation was growing at a much faster rate than Europe and Japan.
The assembled cheerleaders weren't supposed to connect the dots. After all, the economic growth rates that they claim could be achieved by extending the president's tax cuts would avert that Social Security shortfall altogether.
Bush's argument is that borrowing $2 trillion now to cover the cost of allowing individuals to directly invest a portion of their own contributions is prudent because it would avoid borrowing trillions more later. If you buy that argument, there are some weapons of mass destruction in Iraq you might want to acquire as well.
Social Security's projected shortfall, though admittedly something the government needs to worry about, is not a real liability adding to Washington's already alarming mountain of debt, or pressuring interest rates. That $2-trillion IOU Bush wants Uncle Sam to sign would be such a liability.
The administration wants to have it both ways. To pursue its privatization agenda, it wants to alarm Americans into thinking that Social Security is deeply imperiled.
But Bush refuses to support the obvious remedies available if the program really were in danger, such as raising the cap of $87,900 on the amount of a person's income subject to payroll taxes.
The United States has been unable to tether its growing trade and budget deficits, which is why the dollar's value keeps tumbling on world markets.
The Bush administration is not only insisting, rather daftly, that it can cut the deficit while extending its tax cuts; now it wants to borrow trillions more to confront what it fraudulently labels an imminent threat.
Bush's intentionally confused economic policies all contribute to a different sort of shortfall — the U.S. credibility deficit on the global stage. For a spendthrift borrower, that poses a real, imminent danger.