Wednesday, April 06, 2005
NPR reports that President Bush, in his quest to convince the nation of the need for privatized retirement accounts, recently took a trip to the office of the Federal Bureau of Public Debt. This agency is a branch of the US Treasury Department and, therefore, is part of the President's Administration. One might expect that when the President takes a trip to a Federal office, that he would talk up the merits and good work of that office. Instead, the President did the opposite. He ran down the office and its product, pejoratively referring to US Savings Bonds as "'I.O.U.s' -- not real money."
These US Treasure Bonds are the financial product which the investment industry generally considers one of the least risky investments in the world. In fact, the Treasury Bond is the vehicle which allows the current government to spend far more than it is bringing in because they are the primary means through which the government borrows to cover the shortfall in its budget. Yet, the President belittled this investment and agency which he is ultimately in charge of.
Apparently, the President's motivation for this trip and self-deprecating condescension is to create uncertainty in the public mind as to the viability of the future of Social Security. In his words, "It's time to strengthen and modernize Social Security for future generations with growing assets that you can control, that you can call your own, that the government cannot take away."
While I absolutely agree that Social Security is in need of fixing, I cannot agree with the repairs that the President desires to make. I believe that the American people largely believe that the President's intended repairs are misguided; why else would he put on such a conflicted show in which he seemed to be saying that the government has no intention of continuing to pay back its debts? I think this most recent media circus demonstrates that the Administration is desperate to drum up support for the President's plan because it has so little popular support.
Recently I received a phone call from Progress for America, one of the many ignoble 501(c) organizations which indirectly lobby for a politician or his policies. Actually, to describe the communication as a phone call is too generous; it was phone spam, a recording of Tommy Lasorda urging me to call my Congressman to voice my support of President Bush's proposed Social Security reforms. I decided to take Tommy's advice; I decided to write my Congressmen to ask them not to support the President's Social Security reforms until he offers a plan which both contains specifics, not mere demagoguery, and will not undermine the Social Security benefits that the American people feel that they've been promised. If the President wants to reduce the guaranteed payments of Social Security, he should lobby to do so overtly instead of lobbying for a policy which will undermine the ability of the system to pay that which it has promised. I also suggested that a real Social Security reform worth considering is to increase the $90,000 cap on the portion of one's earning which are subject to Social Security taxation.
Leif, you commented that reforms are needed. How pressing do you think this problem is?