by Dale Coberly
AN IMMODEST PROPOSAL
Bruce Webb offered a modest proposal in a recent post to “fix” the Social Security “problem” by (essentially) cutting the payroll tax a few tenths of a percent to reduce the surplus and thereby reduce the debt by that much money borrowed from and owed TO Social Security.
What is wrong with Bruce’s proposal is that it takes more intelligence to understand than most people can bring to bear on the question, and would require more honesty from Congress than they have shown in two hundred years.
So here is an alternate proposal more suited to the intelligence and honesty of the times:
RAISE the payroll tax one tenth of one percent this year, and again next year, and the year after. This would be, from some perspectives, slightly unfair to the workers who pay the tax… but not a huge amount of money… and it would increase the national debt. But it would give congress some extra money to play with to spend on submarines and other things we need to win the war on terror. And it would put Social Security into long term actuarial solvency beyond any question or doubt.
And that would make the extra cost worthwhile to the workers. They would have their Social Security guaranteed, and that guarantee is worth more than a few bucks a week.
What the Congress would do with the rising debt is anybody’s question. But it is not a question that ever troubled them in the past, when the enemies of Social Security weren’t using “the looming crisis in Social Security” as an argument for killing the workers ability to save for their own retirement.
Oh, the limit of the payroll tax increase proposed here would be a 2% increase for the worker and for his employer. Phased in over twenty years, it wouldn’t hurt. And it really would go to pay for the eventual retirement of the workers paying the tax. Congress would never have to pay back the money in the trust fund, so that shouldn’t worry them. Unless the sight of those phony iou’s climbing into the stratosphere made them nervous.
by Dale Coberly