Saturday, December 25, 2010

Eleven Dimensional Chess We Can Believe In!

For starters, I tend to invoke Occam's razor when evaluating the plausibility of any particular morsel of journalistic political analysis; and a number of examples of supposedly brilliant strategizing by the current administration have failed that criterion, despite being hailed as examples of eleven dimensional chess -- incomprehensible to us mere mortals with dirt under our fingernails, but proof positive of the President's prescient brilliance.

However a a post up at Angry Bear (The 2% solution) proposes a sinister if complicated rationale for the Payroll tax holiday of 2010 which I find altogether plausible and frightening in the extreme, despite its possible failure of the Occam test.

In brief, the idea is that the payroll tax (despite fears to the contrary on the Left)  will  indeed be re-instituted in a year's time, but with the slick proviso that it is now destined to form the basis of a private retirement account (PRA) for each individual worker.  Therefore it is not (Ha Ha!)  a new tax increase, and a Republican House will willingly vote for it.  Brilliant, eh?

 Of course this goes against the whole premise of Social Security -- that  your current  payroll tax goes towards the maintenance of other people's retirements, not to direct savings for your own retirement, which will in fact  be paid by the payroll taxes of future workers, when you are yourself retired.

The idea that some portion of this revenue stream could be diverted into a private account disrupts the entire funding model which has functioned so well since its inception under FDR.  It also puts us on the path towards privatization of Social Security.  This may sound sinister to some ears; to me it is eleven dimensional chess I believe in.

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