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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: gao seng who wrote (230338)	2/23/2002 7:03:24 PM
From: gao seng	Respond to of 769670

Editorial: A bum rap on Bush He isn't "dipping into" Social Security, but neither does he have a good budget. By Register Editorial Board 02/23/2002 -------------------------------------------------------------------------------- Despite what you may have heard, President Bush is not stealing from your retirement funds. That accusation has been heard lately in the wake of the news that the government once again will be running big deficits. The president is dipping into Social Security to finance the deficit and give tax cuts to the rich, it is said. Not quite. Social Security funds are being used to help finance the deficit, but that doesn't constitute "dipping into" the funds. Your retirement benefits aren't threatened, at least not by Bush's budget. To see why, let's run through the basics of Social Security once again. It must always be remembered that Social Security is not a retirement savings account. It is an insurance system operated on a pay-as-you-go basis. The payroll taxes paid by today's workers go immediately into the benefit checks of today's retirees (and the disabled, orphaned and other beneficiaries). Temporarily, more is being collected in taxes than is needed to pay current benefits. That's being done to build a reserve so there will be enough money to pay the baby boomers when they retire. This reserve is the so-called Social Security trust fund, or surplus. When the federal budget is presented, this surplus is included on the balance sheet. The effect is to make the deficit in the operating budget appear smaller than it actually is. This is just an accounting gimmick that in no way jeopardizes the money that will be available for Social Security. Of course, the Social Security surplus is not simply stashed in a vault. It is invested. It would be irresponsible not to invest it. The chosen instrument is U.S. Treasury securities, the safest investment in the world. So, sure, Social Security funds are being used to finance the deficits and the national debt. That doesn't threaten the funds, it increases them with interest earnings. The government is borrowing the money and promising to repay it with interest. It's disingenuous to characterize that as "dipping into" Social Security. If the government didn't borrow the money from Social Security, it would borrow it from private investors, and no one would say that constitutes "dipping into" the investors' money. Occasionally, someone says Social Security is threatened because the government might renege and fail to repay the borrowed money. That's nonsense. The United States has never defaulted on a debt and, short of total collapse, never will. If things ever got that bad, Social Security would be the least of anyone's worries. So President Bush is innocent of stealing from Social Security. But that doesn't mean he has a good budget. The return to deficit spending is a huge setback to fiscal sanity and, possibly, to the health of the economy. The crime isn't against Social Security, it's against the lowly taxpayers who will have to repay the debt and pick up burden that Bush's tax cuts lift from the affluent. desmoinesregister.com Last paragraph assumes current GDP growth rate of about nil. Raise it to 2 or more percent, and there is no deficit.