Allen Greenspan, Chairman of the Federal Reserve Banking System, dropped a time bomb in the Republican's laps. Greenspan is appointed and retains his position at the discretion of the President and answers regularly to the Congress. So, Greenspan is never going to come out and say his boss is missing the boat, or the Congress is cheating Americans now paying into the Social Security. At least he would never say so overtly.
He did however; bring the issue of Social Security insolvency in 30 years or more down the road, into focus for the November elections. He did this quite effectively by linking Social Security problems to the deficits which this President and Republican Congress are responsible for. Specifically, Chairman Greenspan said according to Ken Moritsugu of Knight Ridder:
"I think it is terribly important to make certain that we communicate to the people who are about to retire what it is they're going to have to live with. And if we promise more than we can actually deliver, I think it will be a major blot on our whole fiscal process," Greenspan said.
The looming Social Security and Medicare crisis makes it all the more important to get today's growing federal budget deficit under control, Greenspan said. He described today's situation as "probably one of the most difficult fiscal situations we've ever faced."
Now Chairman Greenspan is not about to attack President Bush's tax cuts, that could get him fired. So if revoking any of the tax cuts is off the table, cutting spending is the only option left. And with a half trillion more dollars being spent in 2005 than are taken in by tax revenues, it is clear the President and Congress are not dealing with the problem at all. In fact, Congress and the President are using about 120 billion dollars of Social Security income to help keep the deficit numbers lower than they actually are.
Remember when all the politicians were talking, promising and debating the Social Security lock box? For all the talk, it never happened. And this Republican Congress is consuming Soc. Sec. income for pork projects and their own pay raise while managing even still, to spend more than 1/3 trillion dollars more than they are taking in. Chairman Greenspan is quite correctly bringing to the public attention, the fact that uncontrolled and unpaid for spending by this President and this Republican Congress is going to result in a breach of contract with the American tax payer with regard to Social Security. And such spending threatens future borrowing ability by the U.S. Government. Yes, the U.S. has a credit rating too, just like credit card users. While American credit is fine today, continuing to add interest on the debt, to the debt, and spending more than the government takes in, for years on end, will bankrupt the U.S. just as it would an undisciplined credit card user.
Cutting government spending is one approach. Raising tax revenues is another. Either or both of these solutions applied together will solve the future bankruptcy of the U.S. What Chairman Greenspan is pointing out in his own inimicable way is that this Congress and this President are doing NOTHING to deal with the solution. They are acting like thieves with stolen credit cards, spending with abandon because they know they will not have to pay the bill.
The American people owe Chairman Greenspan a vote of thanks for making this all important issue to Americans, an issue to be raised in the November elections.