-Caveat Lector-
>>> Gore's theme ... unfortunately, "All" may be just "Al" with a lingering "L" ...
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>From NEWSMAX.COM
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Al's Most Vicious Lie
Alan Reynolds
Monday, Nov. 6, 2000
Of all his distortions and exaggerations, Al Gore's assault on George W. Bush's plan
for Social Security is the worst.
Scaring Seniors
Gore charges that "Bush has promised a trillion dollars out of the Social Security
trust fund for young, working adults to invest and save on their own. But he's
promised seniors that their Social Security benefits will not be cut, and he's
promised the same trillion dollars to them. . . . The trillion dollars that has been
promised to the young people has also been promised to older people. And you cannot
keep both promises."
Totally false.
First, the Bush plan would not give young people a trillion dollars, or even one
dollar. It would merely give them a choice to invest part of their own Social
Security taxes in an IRA, or to just leave it all wasting away in Social Security.
Those who elected to pay 15 percent less into Social Security would end up
collecting about 15 percent less in benefits from Social Security. That reduction of
benefits is largely automatic, since benefits are based on taxes paid over 35 years.
This reduced reliance on tax-financed benefits would take a big load off of Social
Security 35-40 years from now, when a huge number of retired Baby Boomers will
otherwise become an impossible burden on a relatively small number of younger
taxpayers.
That is, partial privatization could reduce Social Security's huge $2.4 trillion
surplus over the next 10 years - but it will certainly shrink Social Security's
expenses by several trillions over the long run. And it is in the long run that the
system's financial problems are expected to occur.
He Knows It's a Lie
Listen carefully, and you'll hear Gore qualify his claim, as in the third debate:
"If you're in your mid 40s, under the governor's plan, Social Security will be
bankrupt by the time you retire."
In fact, Social Security will have far more income than is needed to pay benefits
for at least 25 to 35 years, and the Bush option barely dents those near-term
surpluses in exchange for tremendous long-term savings.
Gore's hysterical claim that Social Security will be bankrupt in 20 years (when
those who are now 45 turn 65) inadvertently revealed that the Bush plan poses no
risk at all to anyone older than 45.
But the program still faces that crisis in a few decades, when its accumulated
surpluses run out. Rather than cut other government spending to keep up payments to
seniors, will Washington choose to cut benefits or raise Social Security taxes?
(This might be done surreptitiously - as when Clinton and Gore hiked the tax on
Social Security benefits in 1993.)
That's the real risk faced by those under 45. Such reductions in after-tax benefits
could easily wipe out the meager 1.9 percent return that younger workers are
theoretically supposed to receive on their payroll taxes.
Workers under 45 are understandably skeptical about their odds of even getting back
as much in benefits as they pay in taxes. Younger workers tend to be appropriately
enthusiastic about the opportunity of selecting from a bigger retirement menu under
the Bush plan.
The "Lock- box" Hoax
Gore pretends unspent Social Security taxes can somehow be squirreled away in a
"lockbox," but that too is a hoax. Surpluses can only be used to buy back Treasury
bonds.
Gore tries to make a big deal out of the interest expense saved by allegedly
redeeming privately held bonds at an earlier date than Bush, but Gore's own rosy
estimates show an interest saving of only $6 billion a year. That is chump change
compared with Social Security's promised benefits that are expected to exceed
revenues by nearly $20 trillion over the long haul, in the absence of something like
the Bush reform.
Gore's infamous penchant for class warfare and antibusiness rhetoric has been a
minor annoyance compared with his new passion for pitting young against old. Either
he is inexcusably misinformed about Social Security, or he hopes to misinform enough
voters for enough time to squeak past the election before being unmasked.
"You can fool some of the people some of the time," has become the fundamental theme
of a shameless campaign. Gore propaganda about Social Security insults older voters
by assuming they are easy to fool.
Alan Reynolds is Director of Economic Research at the Hudson Institute.
Copyright 2000 NYP Holdings, Inc. All rights reserved.
End<{{
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The only real voyage of discovery consists not in seeking
new landscapes but in having new eyes. -Marcel Proust
~~~~~~~~~~~~~~~~~~~~
The libertarian therefore considers one of his prime educational
tasks is to spread the demystification and desanctification of the
State among its hapless subjects. His task is to demonstrate
repeatedly and in depth that not only the emperor but even the
"democratic" State has no clothes; that all governments subsist
by exploitive rule over the public; and that such rule is the reverse
of objective necessity. He strives to show that the existence of
taxation and the State necessarily sets up a class division between
the exploiting rulers and the exploited ruled. He seeks to show that
the task of the court intellectuals who have always supported the State
has ever been to weave mystification in order to induce the public to
accept State rule and that these intellectuals obtain, in return, a
share in the power and pelf extracted by the rulers from their deluded
subjects.
[[For a New Liberty: The Libertarian Manifesto, Murray N. Rothbard,
Fox & Wilkes, 1973, 1978, p. 25]]
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