Pat Toomey: Economic amnesia

Washington Times ^ | April 1, 2005 | Pat Toomey

[RWR8189]

Sometimes you need to be reminded of where you came from to understand where you're going. The Club for Growth is giving one senator such a reminder today with the launch of an ad campaign designed to send a simple message: Higher taxes are not the answer for Social Security reform.

Sen. Lindsey Graham of South Carolina came to the Senate with a strong record of cutting taxes to support increased freedom and economic growth. But in the debate on Social Security reform, Mr. Graham has suffered a sort of economic amnesia. He is proposing a large tax increase, in the form of raising the income level subject to payroll taxes, in order to finance the transition to personal retirement accounts. Such a tax increase is not only unnecessary, but it would be devastating to our economy.

The president's proposal to allow younger workers to divert a portion of their payroll taxes to personally owned investment accounts would, temporarily, increase the already impending gap between promised benefits and projected tax revenue. But over time, the power of compounded interest (the greatest power in the world, according to Einstein) will allow ever-greater portions of workers' retirement benefits to come from their accumulated savings. The government's obligation will diminish accordingly, the funding shortfall will shrink, and, unlike the current system, a reformed Social Security system would become permanently solvent. The temporary funding of $1 trillion-$3 trillion is a bargain because it wipes out the $11 trillion shortfall of the current system.

[fiftymegaton]

Damn it! Toomey should run for president.

[Mind-numbed Robot]

Most, if not all, of the transition costs are to fund the "surplus" to "make SS safe for seniors until ??????". Funding that surplus is the major problem.

We should adjust the FICA, a tax cut for the people to spend, to only pay the checks due each month. The surplus is scattered throughout the budget as pork and that will continue as long as it is available. In addition, fictitious interest accumulates to increase the SS debt. We will never pay that debt of IOUs so to keep pretending is to make matters worse.

We only pay out what is due each month so that is all we should plan and tax to do. When they can't, because the surplus is gone, they simply raise the rates, the eligibility age, or reduce the amounts paid to recipients in order to be able to pay the checks due the current month. All the rhetoric about surplus is stupid because the surplus is always gone and always will be.

There is more to say but this is already too long.

[traviskicks]

Loved it. The Club For Growth is the only organization that will stand up to the big, fat, lazy, big government, get-along, media loving, Republicans.