Tuesday, August 31, 2004
Copyright © Las Vegas Review-Journal

EDITORIAL: Promised too much?

Reid, Greenspan differ on soundness of Social Security assumptions

My "personal feeling is that Social Security is the most successful social program in the history of the world," said U.S. Sen. Harry Reid, D-Nev., in a visit to the Review-Journal last week.

But what about those who warn the program is actuarially bankrupt -- that without some major restructuring the promised benefits won't be there for those now under 40, by the time they retire?

Such doubts "are one of the legacies of those who hate government and who hate Social Security," explained the Senate's second-ranking Democrat. "To talk about Social Security going broke is just not true," Sen. Reid concluded.

Sure enough, just four days later, another one of those radical government haters was back at it.

At a conference in Jackson Hole, Wyo., Federal Reserve Board Chairman Alan Greenspan warned Friday the federal government might have to scale back promises to the elderly in programs like Social Security and Medicare.

"As a nation, we owe it to our retirees to promise only the benefits that can be delivered," Mr. Greenspan said. "If we have promised more than our economy has the ability to deliver to retirees without unduly diminishing real income gains of workers, as I fear we may have, we must recalibrate our programs."

Mr. Greenspan has expressed similar views many times in the past, "but he went further on Friday by warning political leaders that they cannot count on continued rapid rises in productivity and faster economic growth to solve the problems ahead," The New York Times reported.

The Fed chairman warned particularly that the government may have trouble keeping a promise to pay for prescription drugs under Medicare -- a new "entitlement" now expected to cost more than $530 billion over the next 10 years.

Well. It's a good thing Sen. Reid (who surely knows more about the economy than this rube, Mr. Greenspan) has assured us that, "To talk about Social Security going broke is just not true" -- that such concerns are nothing but the paranoid confabulations of "those who hate government."

A recent TV commercial by the pro-tax group Moveon.org showed children laboring at menial jobs to pay off the current federal deficit -- implying the problem was the modest Bush tax cuts, rather than the astronomical growth in federal spending.

In fact, those deficits wouldn't exist without the ever-expanding entitlements which started out as Franklin Roosevelt's "modest retirement subsidy" and Lyndon Johnson's Great Society handouts -- so-called "insurance" programs which aren't really insurance programs or annuities at all, but rather redistribution programs that pay off older voters with extractions from the paychecks of their children and grandchildren.

If Social Security is really the finest retirement program ever devised, one wonders why Sens. Reid and Kerry aren't moving to shut down the competing federal retirement program they themselves participate in, instead placing themselves -- along with all other federal, state and local government employees -- under "the most successful social program in the history of the world."