It is time for Mr. Greenspan to retire. Things were bad enough last week, when he appeared publicly to support, at least partly, the White House attack on Social Security.
Time out: yes, it is an attack on Social Security. Regardless of the choice of euphemisms, any proposal to “divert” or otherwise remove payroll taxes from the Social Security program, to send them elsewhere, is taking money out of Social Security.
Payroll taxes, you see, are what fund the Social Security program. So taking even part of the payroll taxes and sending them to Wall Street, or into some form of bundled private accounts that amounts to sending them to Wall Street, is taking money out of Social Security.
This is, on the face of it and self-evidently, the reverse of what Social Security needs. There is no “crisis” facing the Social Security program as yet, of course, and there is no “crisis” due for many years, indeed for decades. The program will not even end its break-even period for many years. The GWBush campaign to pretend that the program over-all needs urgent immediate assistance is so obviously smarmy and bogus that even the opinion polls reveal that less than half the public supports any part of the White House’s thus-far-guarded hints at what it wants.
In so far as there is a genuine problem looming in future, it can be fixed. That is, any future revenues shortfall can be easily addressed – by increasing revenues in the most painless, the simplest, and the most sensible way, in other words by removing the payroll tax cap for the wealthy. Payroll taxes now are levied only on the first $90K of income, a regressive tax that penalizes everyone but the wealthy. Tax the higher income brackets, and you’ve made a start at addressing any future shortfall. In fact, since that money will be earning money itself, the shortfall is postponed as well as diminished.
But if Social Security needs a revenue boost, the way to accomplish that is not to take money out of Social Security. And yet, what the Bush White House is proposing is (repeat after me) to take money out of Social Security. They’ve even got some of the rightwing “noise machine” arguing that the program is a “Ponzi scheme” – apparently because people keep being born and then aging. Presumably they feel the same way about education, and for that matter, churches: new people keep getting born, and then, they put their children into schools and churches, and then, blame it, the schools and churches keep requiring support.
Speaking of simple taxes, Greenspan appeared today to advise the White House taxation council with his ghastly recommendation: make our taxes even more regressive. He’s out in public talking about “broadening the tax base,” cf. those pyramid-building scenes in the old Charlton Heston movie The Ten Commandments, with innumerable insect-like extras pulling gargantuan blocks of rock on huge logs, to build a monument for mummies. Our “tax base” isn’t “broad” enough already, with the top two percent raking in every conceivable tax advantage, both direct and indirect, from Bush’s unconscionable tax cuts for the rich to the corporate dodges that high-powered lawyers push in federal courts at taxpayer expense, and everybody else making up the difference, through either more taxes or fewer services, or both?
On top of that, he’s even talking about – and this has been the dream of the nut right ever since Franklin D. Roosevelt – a national “consumption tax,” as though that were the kind of thing we need more of. Take one moment and consider this suggestion clearly. We need a federal “consumption tax,” at a time when the states and municipalities are taxing, fee-ing, tolling, licensing and permit-ing virtually every legal activity known to man, and largely because of Bush’s budget-busting? Has the man gone around the bend? Aside possibly from food in cans, is there anything we don’t already pay some kind of surcharge on to consume, to sell, or even to make? We pay sales taxes on vehicles and fuel; we pay taxes, fees and tolls for bridges, tunnels and open (ha) highway lanes; barbers, liquor store proprietors, dog groomers and a host of other small operators pay for a license just to set up shop; is there any sizeable sector of the economy that is free of “consumption” surcharges in some form, aside from the corporations and individuals able to park a chunk of their operating revenues overseas or offshore?
I have no personal feeling against Mr. Greenspan. He even hired one of my own younger relatives, an assistant of his. But if he is going to go along with the reverse-FDR, Warren-G-Harding-on-meth, starve-the-public, bloat-the-contractors, uber-laissez-faire-for-the- rich, ultra-control-for-everybody-else intriguing of a vilely selfish cadre in one administration, then he has lost all claim to be the voice of economic reason. You can either go along with the administration’s ghastly, intentional rotting-out of a vibrant and socially mobile middle class, or you can speak for fiscal probity. Not both.
It’s time for him either to reconsider, or to resign.