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...Greenspan issued a fresh call to Congress to move promptly to put Social Security on firm financial footing, warning that doing nothing would lead to massive budget deficits and cause the “economy to stagnate or worse.”
The looming retirement of 78 million baby boomers will put a huge strain on the Depression-era retirement program and aggravate the country’s already bloated budget deficits, he said.
“Unless the trend is reversed, at some point these deficits would cause the economy to stagnate or worse,” Greenspan said.
The Fed chief again endorsed a key part of President Bush’s Social Security overhaul – to create private investment accounts – and said officials must proceed slowly in setting them up. But Greenspan also said that Congress must move ahead quickly to do other things to fix the retirement program’s financing problems.
Congress will need to consider possible benefit cuts and higher tax rates before the baby boomers begin retiring, Greenspan suggested.
But he cautioned that “closing the gap solely with rising tax rates would be problematic” because the high level of taxation that would be required could by itself “severely inhibit economic growth.”
Because “benefit cuts will almost surely be at least part of the solution,” Greenspan said it is imperative for Congress to let future retirees know as soon as possible that all currently promised benefits won’t be forthcoming when they retire.
As my friend Matt pointed out, Social Security is the first thing he can remember Democrats claiming the government was doing right, since GWB took office. Liberals claim that everything that happens is going terribly wrong and it’s all the fault of GWB—but suddenly, they claim, Social Security is perfect.
#2That argument is out of date. Permit me to quote you from a post on the excellent blog, Everything I Know is Wrong:
I was a Democratic voter for most of my life and I know what they want – but I don’t know why they think they’re getting it from Democrats.
... I wanted the same things then, as a Democrat, that I want now as a conservative. I wanted racial equality. I wanted a government that would uphold the Constitution and fight for increased personal freedom. I wanted lower taxes (not no taxes) and greater government efficiency. I wanted a government that would provide a safety net for its citizens, not a hammock. I wanted a government that would stay out of my life as much as possible, and wage war as little as possible, but not flinch when war was necessary. I wanted religious freedom.
...They say they are the party of diversity (by which they mean they will keep the races as far away from partnership with each other as possible, and defend institutional racism under the misleading name of “affirmative action”). They say they will uphold the Constitution (by which they mean they will enact campaign finance laws to restrict political speech, and will endeavor to undermine the second amendment). They say they want more freedom (by which they mean they want more taxation to pay for a larger government to control you more completely).
...The Democratic Party may still be able to win elections. They may be able to win policy fights. But they have lost the ability to do it simply because it is the right thing to do. They only do it for political leverage. Democrats, the members of the party, not the leadership, need to dump their “leaders” and build a new party. A party which actually stands for what its members want it to stand for. A party that will fight for right, because it is right, not because it is politically expedient.
Read the whole thing.
Well, Social Security was of course a Democratic program that was created despite fierce Republican opposition. The elites of the Rebublican party are offended by the entire concept of Social Security.