Alan Greenspan: Deficit Hawk or Lap Dog?

The topic I'd like to address on today's "Lunch Hour Report" is:

How do we figure out Alan Greenspan?

You see, I've been having a lot of trouble understanding what he's up to lately. How could the same person who helped drive the economic successes of the Clinton Administration find anything "good" to say in defense of George Bush's plan to privatize Social Security?

Okay, just to be fair, Greenspan actually said that personal accounts "might be good for maintaining the solvency of Social Security" for the next several years. I guess that's not the same thing as saying Bush's plan is good. But for those of us who'll be depending on that Social Security check in a decade or so, the thought of privatization is, well, not just a little frightening.

Greenspan also recommends reducing benefits for Social Security retirees. Bush, if he possessed a thread of intellectual honesty, would admit that maintaining solvency in the Social Security program would probably require a combined approach including benefit reduction and other strategies. The one that comes to my mind is the removal of the cap on how much income is subject to Social Security taxes.

Both Bush and Greenspan have indicated their fascination with consumption taxes as a means of increasing revenue and reducing the deficit. It seems to me that the removal of the Social Security income cap would apply a similar principle of basic economics. With a consumption tax, the more you spend, the more taxes you pay. Social Security taxes should be assessed in a similar manner: The more you make, the more Social Security taxes you pay in and, at retirement, the larger your benefit.

The failure of politicians and economists to promote the lifting of the Social Security income cap prevents the utilization of a valuable revenue source. Maintaining the cap, and locking the reservoir of potential funds, could seriously jeopardize the solvency of a program that was designed to provide financial security for people during the time of their lives when earnings are generally down and living expenses continue to rise.

Alan Greenspan, usually quite hawkish on deficit reduction strategies and a staunch supporter of economic growth, has seemingly misplaced his voice when it comes to arguing against George Bush's disastrous ideas to privatize Social Security. Nor has he used his powerful position to decry the ludicrous 2010 deficit projection of $219 billion, an amount that conveniently leaves out a couple of expenditures -- like the wars in Afghanistan and Iraq, for example!

So, Mr. Greenspan, are you someone we can turn to as our country stands on the brink of financial disaster? Or will you continue in your service as presidential lap dog? I liked you much better as a hawk.


Invitation to Respond -- All views sincerely welcome!

And now, my dear readers, I've had my say. I'd like to hear from you!

John W. Luton
Luton's Media World "Lunch Hour Report"
Monday, March 7, 2005