March 01, 2004
Greenspan's Amnesia
Kevin Drum has a good piece on Calpundit about Alan Greenspan and his selective amnesia of late. It appears that Alan co-chaired a commission 20 years ago that recommended increasing the regressive payroll tax in order to ensure the solvency of the Social Security program. In the last three years, he's been jumping on the even more regressive tax-cuts-for-the-rich bandwagon, which turned the Social Security surplus into a deficit. Now in during a Washington Post interview, Mr. Greenspan feels that the only way to deal with the deficits is to cut Social Security benefits. Here's the timeline Kevin draws for us:
1983: Recommended raising payroll taxes far above the amount required to fund Social Security. Since payroll taxes are capped (at $87,000 currently), this was, by definition, an increase that primarily hit the poor and middle class.
2001: Enthusiastically endorsed a tax cut aimed primarily at people who earn over $200,000.
2003: Ditto.
2004: Told Congress that due to persistent deficits Social Security benefits need to be cut.
So: raise payroll taxes on the middle class to create a surplus, then cut taxes on the rich to wipe out the surplus and create a deficit, and then sorrowfully announce that the resulting deficits mean that the Social Security benefits already paid for by the middle class need to be cut.
I don't know about you, but I take a dim view of having a "pay in advance" tax system that dries up before I get any benefit. On CNN, Lou Dobbs interviewed David Cay Johnston, author of Perfectly Legal. Rather odd for Lou to be making sense on his show (see previous blog after the Iowa caucus), but Johnston points out that Daniel Patrick Moynihan in 1983 predicted that if the payroll tax on the middle class were increased, it amounted to thievery and "the middle class were going to have their pockets picked by the rich." Twenty-one years later, Moynihan was right.