Federal Reserve Chairman Alan Greenspan urged Congress on Wednesday to deal with the country's escalating budget deficit by cutting benefits for future Social Security retirees. Without action, he warned, long-term interest rates would rise, seriously harming the economy.The Democrats' frequently touted "lock box" idea is a sham, and they know it. Meanwhile, the most aggressive privatization proposal that the president has talked about amounts to the privatization of a no more than a few percentage points of the whole megilla. Even in boom times, this wouldn't save enough money, and the savings wouldn't come for generations, since no politician will stray from the opinion that benefits "must not be touched," particularly the payoff for the benefits-hungry demographic leviathan called the baby boom. Back to Greenspan:
"Tax rate increases of sufficient dimension to deal with our looming fiscal problems arguably pose significant risks to economic growth and the revenue base," Greenspan said. "The exact magnitude of such risks is very difficult to estimate, but they are of enough concern, in my judgment, to warrant aiming to close the fiscal gap primarily, if not wholly, from the outlay side."In other words, finance tax cuts with spending cuts. Heresy, in Washington, even for a Republican. It took the GOP a while to figure it out, but you can get yourself elected by giving people stuff.