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Ten Ways to Disarm the Social Security Time Bomb

With discussion of the soaring federal budget deficit absent from the current “Decision 2004” debate, it’s time to bang the drum slowly for all things related to the word “Lockbox”. Unpaid looked long and hard to find something that would demonstrate the impact of ballooning federal deficit spending, commingled with pressure caused by mass retirements of the Baby Boom generation. The study former Treasury Secretary Paul O’Neill commissioned regarding federal debt projections cites a shortfall of $42 trillion. O’Neill trusted the estimates so much that he refused to call on Congress to pass a new round of tax cuts in 2003. President Bush then fired him and left the material out a federal report on the budget. What were some of the solutions the study proposed? They are:

More than double the payroll tax, immediately and forever, from 15.3 percent of wages to nearly 32 percent.

Translation: 1/3 of everything you earn would go to the federal government, irrespective of other responsibilities you have. So in other words, if you make $30,000 a year, your take home pay would go to $20,000. It sounds simple enough, but it would hurt people at the bottom uniformly more because most truly wealthy folks already think payroll tax is too high and therefore receive other perquisites and benefits in exchange for hard money. Also, because of standard monetary inflation, how much you pay for things won’t go down.

Raise income taxes by two-thirds, immediately and forever.

Translation: Essentially the same idea as the last one, but being an equal opportunity destroyer. Not to mention, uh, corporate persons would also get hit.

Cut Social Security and Medicare benefits by 45 percent, immediately and forever.

Translation: Your parents come to live with you, or you have to subsidize them. Either way, you’ll beg for a tax increase when you see how much time and money they will cost you.

Eliminate forever all discretionary spending, which includes the military, homeland security, highways, courts, national parks and most of what the federal government does outside of the transfer payments to the elderly.

Translation: No, not eliminate some spending…eliminate everything…so that even though the government has the money to pay benefits…it has no electronic means to transfer that money, nor is there a comprehensive postal service to mail anyone a check. Wait, wasn’t this a Kevin Costner movie?

The authors of the study, Jagadeesh Koghale and Ken Smetters, had their work published by the conservative American Enterprise Institute. Koghale is visiting scholar with the ultra-libertarian think tank The Cato Institute, while on sabbatical from the Federal Reserve Bank of Cleveland. Yet, the estimate used by them is on the low end of estimates offered by other studies…the more liberal Brookings Institute has it as high as $60 trillion. So perhaps it is time to consider more extreme measures to save our future.

Forced euthanasia.

Seeing as how uneasy concentration camps all over Florida would make people, we probably want to try a different strategy. Just tell anyone over 85 they are own their own, and watch the majority of them “disappear” about six months before the dreaded date driving the RV to Canada. After all, the sooner the retirees kick off…the sooner our debt troubles are over.

Complete and utter monetary inflation.

This would be slightly worse than cutting benefits by 45% for seniors, since other debt would be massively devalued as well. The purchasing power of the benefits would probably be cut in half, but, non-pensioners who are wage-earners would just be able to ride out the inflationary wave with the added benefit of erasing just about every dime of education debt they hold.

Demand international tribute.

Being a superpower is expensive, and with the military the deepest discretionary cost, perhaps we should start sending regimes a bill when we bail them out. Or perhaps invade countries with natural resources that we can exploit, but pick unpopular regimes that make us look like the good guy. Yeah, that’s a great idea…wait a minute.

Revert to a barter based economy.

Only problem with this is that even when an economy is based on barter, an impromptu currency will arise. Just ask the Argentine grocers who accept Visa, Mastercard, and Nikes.

Short the retirees how much they held on student loans.

Now here’s a creative idea. Deduct with interest the amount retirees of the retiring generation owe from those student loans that went delinquent. Except…that’s probably not enough.

Invent new fees.

Following the success of Arnold Schwarzenegger in California, the politicians steadfastly claim they aren’t going raise taxes, only to charge new fees for everything under the sun. The Gropenfuhrer hasn’t had to eat any political crow from this strategy yet, his reelection bid waiting until ’06…still…this might work. You can bet your bottom dollar everyone will be watching to see if his idea works…because there’s nothing a candidate for office loves more than telling someone they can have his or her cake and eat it too.

Make everyone an American citizen.

Give everyone on Earth “nominal” American citizenship, then force them to pay up. This idea didn’t work all that well for Diocletian and the Roman Empire, but it might actually work this time. 1) American citizens must pay taxes on all income earned inside and outside of the United States, unlike all other countries but Iran. 2) Most have no way to make it to the United States to demand any privileges or rights. 3) Add in a few select consulate and embassy closings, and it’s a solid idea.

Raise interest rates really high.

This solution seems innocuous, but it would only work if the European Central Bank, the Bank of Japan, and Bank of England correspondingly raise interest rates. The US could then raise interest rates and sell new government bonds to infuse the general fund with cash and pay back all the debt. The only pitfall: only a handful of Americans would then be able to afford anything financed on credit, including but not limited to cell phones, credit cards, cars, or houses.

Burn Canada!

No, not the cities…try the millions of acres of untamed Canadian wilderness. Unlike the Russians or Brazilians, who own nuclear weapons, the Canadians are at our mercy. Burn enough trees down, and voila major climate change. What’s that got to do with the Social Security mess? After Europe is buried in snow, and other equatorial countries have all their arable land flooded…who’s the only game in town for your crop needs? With wheat at World War I level prices, what is there to worry about?

Rent the President

Everyone seems to forget that foreign investment in the economy comes from all corners, from million-dollar deals to tourism. So why underestimate how much people are willing to pay for an unique experience abroad. Imagine hanging out with the President for a day, at the low cost of $1 million. Want to be Speaker of the House for a day? $100,000. Or how about a special tour of Area 51 led by Donald Rumsfeld himself? This would be one way to raise enough money to offset the debt, keep everyone happy, and cause any lasting impacts on the economy. Still, this would add a new dimension to having a government for sale.

posted by Thomas at 1:37 AM 0 comments