Arnold Kling at The Bottom Line. actually pointing to an article he wrote for TechCentralStation. In an article comparing economists to Galileo (I kid you not), he make the following statements:
The key point to realize about our entitlement programs is that they do not work the way that you would expect. What you expect is that when Joe pays taxes for Social Security or Medicare, then that money goes into an account until it is time for Joe to draw his benefits. Instead, Joe's taxes go to pay for current beneficiaries, and future taxpayers have to pay Joe when he starts to draw Social Security and Medicare.
It may not be working the way we would expect, but that's not our fault. We were told to expect it to work that way.
Mr. Greenspan…in 1983 said that one way to make sure Social Security remains solvent once the baby boomers reached retirement age was to tax them in advance.On Mr. Greenspan's recommendation Social Security was converted from a pay-as-you-go system to one in which taxes are collected in advance.
As an economist I expect Mr. Klein is fully aware of this, so this statement borders on the mendacious.
And just how big a tab have we run up with Social Security and Medicare? What is the damage? Well, it turns out that the present value of the unfunded deficit in entitlements has been estimated by Jagadeesh Gokhale and Kent Smetters to be $45 trillion. Even if President Kerry or Edwards turned the rich people in the country upside down, emptying their pockets of all their financial assets, homes, cars, and everything else, that still could not cover the tab that Congress has run up on our behalf.
So we turn the non-rich people (who collectively own far, far less than the rich) upside down, emptying their pockets of all their financial assets, homes, cars, and everything else instead.
Pfaugh.
We don't want your assets. We want at least as much of your unearned income as you take of our earned income. That leaves your assets in your hands, still busily churning out mo' money than you are capable of spending anyway.
Posted by P6 at March 4, 2004 12:28 PM
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Comments
Best way I have heard the argument put prom. Makes me shiver like a Sharpton quote- to the heart of the matter.
Posted by Mr.Murder at March 7, 2004 04:48 AM