Wednesday, February 09, 2005

What's a Default Among Friends?

Josh Marshall has been all over the President's speech today in which he hints at defaulting on Treasury bonds, indicating that the Social Security Trust Fund doesn' t EXIST.

Some in our country think that Social Security is a trust fund -- in other words, there's a pile of money being accumulated. That's just simply not true. The money -- payroll taxes going into the Social Security are spent. They're spent on benefits and they're spent on government programs. There is no trust. We're on the ultimate pay-as-you-go system -- what goes in comes out. And so, starting in 2018, what's going in -- what's coming out is greater than what's going in. It says we've got a problem. And we'd better start dealing with it now. The longer we wait, the harder it is to fix the problem.
Uh, that's not what the Greenspan Commission's report back in the 1980s suggests. Go read Josh here.

2 comments:

Michael Roy Hollihan said...

I'm the first to admit I don't read Josh regularly. OK, hardly at all. But is his incredulity to be taken seriously? It's been a staple of critics of the SocSec system for decades now that there is no "trust fund," that Congresses both Democratic and Republican have raided it constantly to pay for programs, that the fund is nothing but a pile of IOUs.

Remember Al Gore during the 2000 campaign and his SocSec "lockbox?" Why does anyone think it's needed, if not to prevent thievery?

Or has Marshall decided to suddenly take seriously and literally the metaphoric truism? That's a cheap rhetorical ploy if it's true.

Anonymous said...

"Today the system is sound, but the demographic crisis looming is clear. The baby boomers, 76 million of us, are now looking ahead to their retirement. And people clearly are living longer,so that by 2030, there will be twice as many elderly as there are today. All these trends will impose heavy strains on the system. . .Today the system is sound, but the demographic crisis looming is clear. The baby boomers, 76 million of us, are now looking ahead to their retirement. And people clearly are living longer, so that by 2030, there will be twice as many elderly as there are today. All these trends will impose heavy strains on the system." president Bill Clinton / april 7, 1998