QandO

February 26, 2004

What Greenspan DID say
Posted by McQ

Let's be real clear on what Greenspan DID say yesterday and what various people are going to try to imply was his message. To begin with he DID say we can't afford Social Security at the level of benefits we're presently paying when the "baby-boom" generation hits.

Federal Reserve Chairman Alan Greenspan, stepping into the politically charged debate over Social Security, said yesterday the country can't afford the benefits currently promised to the baby boom generation.

For the life of me, I can't understand how this came as a shock to some people. For those with an ounce of economic sense this was a figurative yawn and a "so what else is new"? No kidding we won't be able to afford it ... some of us have been saying that for YEARS.

He DID talk about the deficit.

He urged Congress to trim those benefits to get control of soaring budget deficits, which he said threatened a "very debilitating" rise in interest rates in coming years.

Service on the debt is the second highest expediture in the budget behind defense. It doesn't take the proverbial rocket scientist to figure that the money spent servicing the debt could be in a better place ... your pocket.

He DID make an extremely important point about the tax cuts ... keep them and make them permanent. Why? Because they are of great benefit to keeping the economy healthy and growing.

Mr. Greenspan also repeated his view that Mr. Bush's tax cuts should be made permanent to bolster economic growth. He said the estimated $1 trillion cost should be paid for, preferably, with spending cuts so the deficit would not be worsened.

And how DID he say the deficit should be reduced?

CUT SPENDING!!

Hello out there in politico-land ... one more time for everyone: CUT SPENDING!

Do you think they'll get it?

Well, no ...

Sen. John Edwards, North Carolina Democrat and presidential candidate, called it "an outrage" for Mr. Greenspan to call for cuts in Social Security while at the same time endorsing making Mr. Bush's tax cuts permanent.

After all, how can you buy votes if you cut spending. And of course:

Rep. Dennis J. Kucinich, Ohio Democrat and also running for president, called for Mr. Greenspan to resign, saying his comments were "a disgrace."

Now days if you attempt to speak the truth, you're called upon to resign. A bit like killing the messenger bearing bad news, isn't it? Doesn't change the news one bit.

But, you say, why was Greenspan talking about Social Security now being such a big problem?

Because the political hacks who call themselves our representatives have been ignoring problems for YEARS. Its called the "third rail of politics" and they've refused to touch it.

Its never been a secret ... its all a numbers game, really and they've known the reality of those numbers for years as well.

77 million "baby-boomers" move into the retirement ranks and projections show the country will go from having just over three workers supporting each retiree to 2.25 workers for every retiree by 2025.

You don't have to be a member of Mensa to figure that one out, do you? Sound like a sound fiscal model to your, or a little more like a Ponzi scheme every passing day?

See you at 65 or 67 or whatever age they decide they'll pay you some of the money you've been shoveling in for years. Try not to die before you at least get SOME of it back.

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