Wednesday, May 18, 2005


(Thanks to friend Joe for the cartoon and article.)

By Paul Krugman
Helena Independent Record

Hell hath no fury like a scammer foiled. The card shark caught marking the deck, the auto dealer caught resetting a used car's odometer, is rarely contrite. On the contrary, they're usually angry, and they lash out at their intended marks, crying hypocrisy.

And so it is with those who would privatize Social Security. They didn't get away with scare tactics, or claims to offer something for nothing. Now they're accusing their opponents of coddling the rich and not caring about the poor.

Well, why not? It's no more outrageous than other arguments they've tried. Remember the claim that Social Security is bad for black people?

Before I take on this final insult to our intelligence, let me deal with a fundamental misconception: the idea that President Bush's plan would somehow protect future Social Security benefits.

If the plan really would do that, it would be worth discussing. It's possible - not certain, but possible - that 40 or 50 years from now Social Security won't have enough money coming in to pay full benefits. (If the economy grows as fast over the next 50 years as it did over the past half-century, Social Security will do just fine.) So there's a case for making small sacrifices now to avoid bigger sacrifices later.

But Bush isn't calling for small sacrifices now. Instead, he's calling for zero sacrifice now, but big benefit cuts decades from now - which is exactly what he says will happen if we do nothing. Let me repeat that: To avert the danger of future cuts in benefits, Bush wants us to commit now to, um, future cuts in benefits.

This accomplishes nothing, except, possibly, to ensure that benefit cuts take place even if they aren't necessary.

Now, about the image of Bush as friend to the poor: Keep your eye on the changing definitions of ''middle income'' and ''wealthy.''

In last fall's debates, Bush asserted that ''most of the tax cuts went to low- and middle-income Americans.'' Since most of the cuts went to the top 10 percent of the population and more than a third went to people making more than $200,000 a year, Bush's definition of middle income apparently reaches pretty high.

But defenders of Bush's Social Security plan now portray benefit cuts for anyone making more than $20,000 a year, cuts that will have their biggest percentage impact on the retirement income of people making about $60,000 a year, as cuts for the wealthy.

These are people who denounced you as a class warrior if you wanted to tax Paris Hilton's inheritance. Now they say that they're brave populists, because they want to cut the income of retired office managers.

Let's consider the Bush tax cuts and the Bush benefit cuts as a package. Who gains? Who loses?

Suppose you're a full-time Wal-Mart employee, earning $17,000 a year. You probably didn't get any tax cut. But Bush says, generously, that he won't cut your Social Security benefits.

Suppose you're earning $60,000 a year. On average, Bush cut taxes for workers like you by about $1,000 per year. But by 2045 the Bush Social Security plan would cut benefits for workers like you by about $6,500 per year. Not a very good deal.

Suppose, finally, that you're making $1 million a year. You received a tax cut worth about $50,000 per year. By 2045 the Bush plan would reduce benefits for people like you by about $9,400 per year. We have a winner!

I'm not being unfair. In fact, I've weighted the scales heavily in Bush's favor, because the tax cuts will cost much more than the benefit cuts would save. Repealing Bush's tax cuts would yield enough revenue to call off his proposed benefit cuts, and still leave $8 trillion in change.

The point is that the privatizers consider four years of policies that relentlessly favored the wealthy a fait accompli, not subject to reconsideration. Now that tax cuts have busted the budget, they want us to accept large cuts in Social Security benefits as inevitable. But they demand that we praise Bush's sense of social justice, because he proposes bigger benefit cuts for the middle class than for the poor.

Sorry, but no. Bush likes to play dress-up, but his Robin Hood costume just doesn't fit.


Blogger Tom Harper said...

That's exactly right; now that their scam is seen for what it really is, they're lashing out. Just a bunch of ungrateful class warriors trying to destroy our free enterprise system. They're trying to take away any incentive to work, improve ourselves, etc. Riiight.

1:05 PM  
Blogger J. Marquis said...

Good article, great cartoon!

2:02 PM  
Blogger Lizzy said...

Their privatization plan is going over like a ton of bricks. I wonder if they will drop it or make it pass by any means necessary. Since lying & cheating is what they do best, my guess is the latter.

7:18 AM  
Blogger Unadulterated Underdog said...

Bush's plan doesn't have any medium of solvency to it whatsoever. That's why he has jumped on the idea that a Democrat had to setup different brackets of benefits where the higher the bracket the less benefits will be paid. While that may be flawed, it's still the only thing he has and it wasn't even his idea. He's turning into a dictator that doesn't know how to rule, that's my take on it. BTW, I have blogrolled this site. Cheers!

12:28 PM  
Blogger The Bird Poop said...

Let's not confuse Social Security Reform and S.S. Reform. The latter Bush is doing rather well in.

Poland Beware...

4:59 PM  
Blogger sleepybomb said...

i agree, once they have the filibuster busted, they are going after this . . . it will pass because dubya sez it's so.
be very afraid!

7:12 PM  
Blogger Damien said...

I'm don't think I'll ever be convinced that throwing your social security into the private sector will ever work, reguardless I'm sure that improving personal savings amoung individuals would be a good first step.

7:58 PM  

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