CT Blue

As a reminder that there are no final victories in politics, there have been rumblings on the internet that the wise people in Washington are insisting that we must, before all things domestic, fix the non-existent crisis in Social Security. Kevin Drum is the latest super blogger to note that the Washington Post has been beating the drum about the “crisis” quite steadily, despite the lack of evidence that Social Security has more than minor problems, all of which are rather long term. He points out that we might be better served waiting, at least until the trust fund balance is exhausted, to decide what action to take, as we will then have a better idea about the lay of the land at that point.

There’s another point that has to be made. There are only two “solutions” to the crisis, at least only two that are within the acceptable limits of discussion. One is to solve the “crisis” by raising the payroll tax, the other is to solve the problem by destroying the program. The latter didn’t work out too well for Bush, and it’s unlikely that his fellow Republicans will want to walk that plank at this particular moment. That leaves increasing the payroll tax.

But, that presents a problem. At this point raising the payroll tax would simply increase the Social Security trusts fund surplus. That increased surplus would be invested in the very treasury bills that Bush and his Washington Post supporters insisted were worthless; mere “I.O.U’s. Full faith and credit, we were told, was for the Chinese, not the American worker. That being the case, any money we infuse into the system now will simply disappear down the same hole, stolen by George Bush to transfer to his cronies, and replaced by worthless pieces of paper. The only thing we can hope to do is pay as we go, because any surplus we generate is lost to us. By that logic, it makes no sense to do anything until payroll taxes no longer cover the cost of current benefits. In fact, if we accept their logic, the rational thing to do now would be to cut payroll taxes so that they only cover current benefits, since we are flushing the surplus down the toilet anyway.