Tanner called for allowing workers to invest their share of the annual Social Security payroll tax surplus, which, he said, would put an end to the federal government borrowing and spending that money. “That surplus is being spent on everything the government does from rutabaga research to the war in Iraq,” Tanner said. “If Congress is going to spend like a drunken sailor, take the bottle away from them.” Krugman, however, said the surplus is needed to offset a decline in federal revenues augmented by the Bush tax cuts. “Those tax cuts, rather than the spending binge, are the primary cause of the (federal) deficit,” Krugman said.
In truth, the massive General Fund deficits are in small part due to Bush’s refusal to say no to any spending increase and in large part due to his willingness to cut current taxes. I want to say that Tanner has confused the General Fund issue with the Social Security issue. I want to say that the DeMint proposal does nothing to address the General Fund issue. But then Mark Thoma has already said it for me:
The whole idea that personal accounts are needed because of the inability of congress to act in their constituents best interest, because congress is morally bankrupt, always rings hollow to me. Don’t change the system, change congress. If congress is going to “spend like a drunken sailor” then throw them out of the House. If they thought you’d actually vote them out for this stuff, they’d behave differently, but they don’t think you will. Why is that?
As to Mark’s “why is that” – maybe it is because there are so many Bush supporters such as Tanner who are willing to lie about these issues. The good news is that the crowd in Poughkeepsie was not buying Mr. Tanner’s spin.