Friday, June 5, 2009

More on debt and the economy

Yesterday Federal Reserve chairman Ben Bernanke warned Congress that it must do something about the projected debt the nation faces from enlarged use of entitlement programs such as Social Security and Medicare. Again, we heard the same warning about the danger to the economic strength of the US from this projected but probable debt.
Bernanke did not apologise for his role in creating almost two trillion dollars worth of debt taken on to fight a danger to the economy, i.e., bank losses. He still thinks that was the right thing to do.
There is something circular and deceitful about his reasoning.
People like Bernanke never speak about raising taxes as a way to raise revenue.
People like Bernanke never speak about the year in and year out raid on the Social Security Trust Fund by every President starting with and since Lyndon Johnson.
I am still waiting for an economist to produce a paper study that would show how little of a debt threat Social Security might be today if the Trust Fund had never been used for as a subsidy for the General Fund.
But that won't happen. Why? Because it would reveal the true size of our Federal deficit. It would reveal that all our Presidents, regardless of party, have not been honest with the people.

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