Poor Acting
David Brooks tells us that the poor would stop being poor if they'd, well, stop acting poor.
Across the page, Krugman's jaw drops at the site of another bad actor.
"The traditional definition of chutzpah says it's when you murder your parents, then plead for clemency because you're an orphan. Alan Greenspan has chutzpah."
Greenspan's complicity in destroying the Social Security (and Medicare) surpluses will be his legacy.
And it's an ugly one because the stakes are so high -- so high, they're, in the words of Edmund Andrews, "surreal."
"The Bush administration has estimated that the gap between promises under current law and the revenues expected will total $18 trillion over the next 75 years. But an internal study in 2002 by the Treasury Department, looking much further ahead, concluded that the gap was actually $44 trillion - and would climb each year that nothing was done.
"Indeed, the numbers are so big and extend so far into the future that they border on the surreal. Analysts in both Congress and the administration warn that the flood of retiring baby boomers will cause federal spending on old-age benefits to eventually consume as much of the nation's economy as the entire federal budget does now. And while the problems would be acute even if today's federal budget were balanced, the budget deficits that seem likely for the rest of the decade make matters worse. That is because the government is borrowing more than $200 billion a year from the Social Security and Medicare trust funds to finance its operating deficits.
"In theory, the two giant trust funds are accumulating huge surpluses that can be used to pay for benefits when the baby boomers retire and the systems start taking in less than they are paying out. In practice, those surpluses are being spent, and the government will probably have to borrow enormous sums to meet its obligations to retirees."
Bush, of course, has a fantasy for fixing this mess.
"Mr. Bush and many administration officials contend that much of Social Security's problems could be solved by letting people divert some of their payroll contributions to private investment accounts they might manage for themselves.
"But some experts say that the government would have to borrow as much as $1 trillion over the next several decades to make up for the lost revenues and pay retirees benefits earned under the old system.
"And the Congressional Budget Office, in a report on privatization plans last year, said none of the proposals would have much effect.
"'Using government resources to buy stocks and bonds, without other spending and tax changes, would not automatically lead to an increase in the nation's pool of investment resources,' the budget office concluded. 'There is no such thing as a free lunch.'''
But, of course, Bush lives in a fantasy world where no news is allowed to disturb his sleep.
"Some experts contend that even the administration's chilling projections about the looming problems of Social Security seriously understate the problem.
"In 2002, two senior economists at the Treasury Department were asked by Paul H. O'Neill, then the Treasury secretary, to come up with a comprehensive estimate of the federal government's long-term fiscal problems. The total, calculated Kent Smetters, then a deputy assistant secretary for economic policy, and Jagadessh Gokhale, an economist on loan to the Treasury from the Federal Reserve Bank of Cleveland, was an almost unthinkable $44 trillion.
"That projection was swiftly disavowed by the administration. Rob Nichols, a spokesman for the Treasury Department, said the White House never intended to use the study in its official budget forecast. 'They were doing what they called an independent paper,' he said.
"Mr. Gokhale, now a senior fellow at the Cato Institute, a policy research group in Washington, recalled matters differently. 'At some point, late in the game, it was decided that it wouldn't be in the budget,' he said. 'In my opinion, if they had reported these numbers, they would have gotten a lot of credit.'''
Across the page, Krugman's jaw drops at the site of another bad actor.
"The traditional definition of chutzpah says it's when you murder your parents, then plead for clemency because you're an orphan. Alan Greenspan has chutzpah."
Greenspan's complicity in destroying the Social Security (and Medicare) surpluses will be his legacy.
And it's an ugly one because the stakes are so high -- so high, they're, in the words of Edmund Andrews, "surreal."
"The Bush administration has estimated that the gap between promises under current law and the revenues expected will total $18 trillion over the next 75 years. But an internal study in 2002 by the Treasury Department, looking much further ahead, concluded that the gap was actually $44 trillion - and would climb each year that nothing was done.
"Indeed, the numbers are so big and extend so far into the future that they border on the surreal. Analysts in both Congress and the administration warn that the flood of retiring baby boomers will cause federal spending on old-age benefits to eventually consume as much of the nation's economy as the entire federal budget does now. And while the problems would be acute even if today's federal budget were balanced, the budget deficits that seem likely for the rest of the decade make matters worse. That is because the government is borrowing more than $200 billion a year from the Social Security and Medicare trust funds to finance its operating deficits.
"In theory, the two giant trust funds are accumulating huge surpluses that can be used to pay for benefits when the baby boomers retire and the systems start taking in less than they are paying out. In practice, those surpluses are being spent, and the government will probably have to borrow enormous sums to meet its obligations to retirees."
Bush, of course, has a fantasy for fixing this mess.
"Mr. Bush and many administration officials contend that much of Social Security's problems could be solved by letting people divert some of their payroll contributions to private investment accounts they might manage for themselves.
"But some experts say that the government would have to borrow as much as $1 trillion over the next several decades to make up for the lost revenues and pay retirees benefits earned under the old system.
"And the Congressional Budget Office, in a report on privatization plans last year, said none of the proposals would have much effect.
"'Using government resources to buy stocks and bonds, without other spending and tax changes, would not automatically lead to an increase in the nation's pool of investment resources,' the budget office concluded. 'There is no such thing as a free lunch.'''
But, of course, Bush lives in a fantasy world where no news is allowed to disturb his sleep.
"Some experts contend that even the administration's chilling projections about the looming problems of Social Security seriously understate the problem.
"In 2002, two senior economists at the Treasury Department were asked by Paul H. O'Neill, then the Treasury secretary, to come up with a comprehensive estimate of the federal government's long-term fiscal problems. The total, calculated Kent Smetters, then a deputy assistant secretary for economic policy, and Jagadessh Gokhale, an economist on loan to the Treasury from the Federal Reserve Bank of Cleveland, was an almost unthinkable $44 trillion.
"That projection was swiftly disavowed by the administration. Rob Nichols, a spokesman for the Treasury Department, said the White House never intended to use the study in its official budget forecast. 'They were doing what they called an independent paper,' he said.
"Mr. Gokhale, now a senior fellow at the Cato Institute, a policy research group in Washington, recalled matters differently. 'At some point, late in the game, it was decided that it wouldn't be in the budget,' he said. 'In my opinion, if they had reported these numbers, they would have gotten a lot of credit.'''
posted by John at 6:39 PM
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