President Bush Is Planting Another Lie

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Reuters reports the following in an article entitled, Bush Says No Payroll Tax Hike for Social Security:

President Bush ruled out raising payroll taxes to help pay for Social Security reform on Thursday, leaving him few options other than a sharp increase in government borrowing to bankroll transition costs estimated at up to $2 trillion.

"We will not raise payroll taxes to solve this problem," said Bush, rejecting a solution advocated by some experts and Republican lawmakers.

The grand lie is very easy to detect. If the reform adds up to $2 trillion dollars to the national debt, the taxpayers will see an increase in their payroll taxes, just not this year. The current national debt is over 7.5 trillion dollars. This reform will bump that number to 9 or 9.5 trillion. If the President and his GOP led Congress hold to his promise of cutting the deficit in half over the next 5 years, the deficits each of those years will still amount to at least an additional 2 trillion dollars added to the national debt. That puts our national debt at 11 to 11.5 trillion dollars. A trillion dollars is 1,000 billion dollars, so we are talking 11 to 11.5 thousand billions of dollars of national debt.

This kind of national debt will also raise our interest to be paid by taxpayers on an annual basis from over 1 billion dollars a day today, to about 2 billion dollars a day if interest rates rise modestly over the next 5 years. That will put our interest on the debt at about 3/4 of a trillion dollars per year. So, yes, this Social Security reform Bush is considering will, in fact, increase every working person's taxes withheld from their paycheck. The really cute trick though is that these enormous increases in taxes which will be absolutely necessary to reduce rising interest payments and the national debt, if America is to have an economic future, will occur just after George W. Bush leaves office.

Now if you are in the Bush family, the Cheney family, the Haliburton family of investors or any number of other investors in the corporations profiting from higher oil prices or war, there will be no need to be concerned about rising payroll taxes. None of these folks will need a paycheck. What with Republican moves to eliminate the estate tax, a trial run at a moratorium on capital gains taxes, and a host of other shelters for the very wealthy and large investors, these folks have nothing to worry about. But for us who have to depend on paychecks, the sting is coming, and it will keep coming for at least a decade if not decades, as the public catches up with conservative economic analysts who have been saying for a couple years now that these lofty levels of debt are not sustainable.

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This page contains a single entry by David R. Remer published on December 10, 2004 3:37 PM.

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