Tuesday, March 25, 2008

More Washington Post Social Security Lies

Dean Baker, co-director of the Center for Economic and Policy Research:
So under current law, Social Security has full access to these bonds and can meet all projected payments through the year 2041 according to President Bush's Social Security trustees, and through the year 2046 according to the projections of the non-partisan Congressional Budget Office. (Btw, Medicare is currently being funded in part by the same sort of IOUs held by the Social Security trust fund. This has not even been raised as an issue.)

Of course, if there were enough people like Mr. Sloan, Congress could vote to change the law and effectively default on the bonds held by the trust fund. (This doesn't seem likely, since the percentage of voters who are receiving Social Security will soar in the next decade.) Since the bonds are supposed to be repaid out of general revenue, which comes overwhelmingly from progressive individual and corporate income taxes, this default would amount to a massive upward redistribution of wealth. It would transfer more than $1 trillion from the bottom 80 percent of the population to the richest 5 percent, with the bulk of this money going to the richest 1 percent.
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