Wednesday, March 02, 2005

Social Security Vote May Be Delayed (washingtonpost.com)

There does not seem to be the political stomach to offering personal accounts.

While the media is already acsribing defeat to President Bush as a result, in the longer run it may be best not to pass right now.

Here is why.

If it passes, it will do so with, at a minimum, de facto tax increases - an increase in the payroll tax cap and/or an add-on account.

If these taxes go into effect concurrently with the accounts' first deposits, then there would be no additional taxes for the oleaginous politicians to spend.

But if my descriptor for politicians holds true, they will attempt to use those additional taxes to pay for current spending. This would raise the baseline budgets in future years and make the impending entitlement crisis more difficult.

For this reason, I am willing to scrap any reform that gives politicans more options to spend thriftlessly. We'd be better off just raising taxes year after year by the minimal amount needed to close a gap. (Of course, those people will offer overstated estimates of the gap in order to raise taxes higher and use the "surplus" on other spending programs.)

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