James Leroy Wilson's blog

Saturday, April 30, 2005

IOUs for dummies

Jane Galt's partner Mindles H. Dreck shows - not explains, shows - how the US government's IOU's to Social Security work. But how this proves, like Dreck thinks, the superiority of Bush's "privatization" scheme, in which the government directs our investments, is beyond me:

Asymmetrical Information: IOUs for dummies

Far better to call things as they are. Social Security is welfare, mainly for old people but also for the handicapped. So let's transition the whole operation into general revenue/expenses (and do the same with Medicare) and cease the robbery of the working poor of Social Security and Medicare taxes, and end the fiction of the trust funds.

1. Abolish these special taxes and transfer them into the general income tax code.
2. Each year, figure out how much we are to spend on welfare for old people and the handicapped as part of the general budget.

In other words, let's abandon the idea that the Social Security will run out of its "surplus" (in 2018, 2042, or whatever year they say). Instead, make it run out of its surplus today by repealing Social Security taxes.

The only real effect of this is to make our tax code more progressive. The working poor will be freed from the regressive Social Security taxes, and if taxes have to be raised through the more progressive income tax code, it will paid mainly by people with higher incomes.

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