Monday, May 09, 2005

Krugman nails the Bush "plan" for social security: future cuts to prevent ... future cuts?!

The Final Insult - New York Times
But Mr. Bush isn't calling for small sacrifices now. Instead, he's calling for zero sacrifice now, but big benefit cuts decades from now - which is exactly what he says will happen if we do nothing. Let me repeat that: to avert the danger of future cuts in benefits, Mr. Bush wants us to commit now to, um, future cuts in benefits.
At last, someone noticed this. The alleged "Bush plan" now (supposedly) calls for means testing benefits and cutting them for the "wealthy". All very fine and progressive, but it's a benefit cut. It also emphatically demonstrates that government can't be trusted to fill the "deal" for past benefits; though I assume this could be "grandfathered" (in which case it might not help very much).

Even if I had an ounce of faith and trust in President Bush, I'd still look askance at this "plan". Since I have zero faith or trust in Bush or the Republican Party, it's a non-starter. The odd disadvantage of one-party government is that there's no true negotiation, hence no basis for trust -- especially given Bush's track record. The professor continues with devastating hits:
Suppose you're a full-time Wal-Mart employee, earning $17,000 a year. You probably didn't get any tax cut. But Mr. Bush says, generously, that he won't cut your Social Security benefits.

Suppose you're earning $60,000 a year. On average, Mr. Bush cut taxes for workers like you by about $1,000 per year. But by 2045 the Bush Social Security plan would cut benefits for workers like you by about $6,500 per year. Not a very good deal.

Suppose, finally, that you're making $1 million a year. You received a tax cut worth about $50,000 per year. By 2045 the Bush plan would reduce benefits for people like you by about $9,400 per year. We have a winner!

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