new math, new economics....new lies
To: Chispas who wrote (21354) 1/14/2005 1:29:12 PM
From: mishedlo Mark as Last Read | Read Replies (2) | Respond to of 21386
White House: Social Security accounts don´t boost debt
Friday, January 14, 2005 6:02:25 PM
White House: Social Security accounts don't boost debt WASHINGTON (AFX) - Allowing workers to divert a chunk of their Social Security payroll taxes into private investment accounts would boost government borrowing in coming years but wouldn't increase federal debt, White House budget director Josh Bolten said on Friday
Bush's Social Security plans have stirred a fierce debate over the fiscal implications of creating private accounts. Since payroll taxes are used to pay current benefits, allowing workers to divert a portion into private accounts would force the government to find alternative means of funding payments to current Social Security beneficiaries
Bush has ruled out raising payroll taxes to fund the transition to private accounts. Speaking at the U.S. Chamber of Commerce, Bolten reasserted the administration's stance that the transition should be funded by increased government borrowing
While borrowing requirements - estimated at as much as $2 trillion over the next decade - would be reflected in the near-term fiscal picture, it wouldn't represent "an increase in debt," Bolten said
[borrowing costs rise but there is no extra debt - Is this new math? - Mish]
He argued that the costs would be a wash over the long haul, with a revamped Social Security system wiping out the program's long-term projected shortfall of more than $10 trillion
"These are not new costs to the system," Bolten said
Critics charge that financial markets could react negatively to the increase in near-term borrowing. That's because Social Security's long-term unfunded commitments represent "implicit debt," which is viewed less warily by financial markets than the "explicit debt" that would be created by the transition borrowing, they argue
[Implicit debt vs explicit debt - too funny - mish]
While some lawmakers have indicated that debt associated with the transition could be held off budget, Bolten said the borrowing requirements would mean "as a matter of accounting we are required to recognize that cost to the government earlier" than would otherwise be the case
[Gee there is a solution - Let's hold it off budget and pretend it does not exist. LOL Mish]
Bolten criticized use of the term "transition costs" to describe the borrowing associated with creating the accounts, saying it would be better described as "transition financing." Bolten, however, said any transition borrowing wouldn't be reflected in the fiscal 2006 budget outline the White House is due to send to the printer in coming days because Bush has yet to lay out a detailed proposal
[It's not a transition cost it's merely "transition financing". Good god! What's next? Mish]
But some details may be coming soon
[Looks like I have my answer to that last question I asked already: "Who Knows?" Mish]
"I do expect that by the time that budget comes out on Feb. 7 there will be the opportunity to lay out more specifics," Bolten said.
[Gee, One might hope so. But with this administration I sure would not count on it. Mish]
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