The Bush photo-op

President Bush two days ago posed before a file cabinet filled with Social Security Treasury bonds suggesting they were nothing but worthless paper. The New York Times this morning properly took him to task. Where's the next stop? Will he go to Beijing and tell the Community Party leaders that the $700 billion they've invested in U.S. T-bills are worthless?

But let's not put all the blame on Bush. He took his cue from none other than Alan Greenspan, who spoke at length last August at the Fed's annual retreat in Jackson Hole, Wyoming about Social Security as if the trust fund didn't exist (see Gooznews, Aug. 29, 2004, "Greenspan/Bush: Repudiate the National Debt!").

Yet paying off the national debt -- to the future retirees, the Chinese and all the other T-bill holders -- is a major, looming problem. The share of national income going to taxes (general revenue from income and corporate taxes, not Social Security revenue from the payroll tax) will have to rise from its historically low levels. The tax cuts of recent years have eviscerated the government's ability to pay its bills.

In that regard, it was interesting to note the op-ed in yesterday's Times by Bruce Bartlett, one of the right-wing intellectuals behind the anti-tax movement of Grover Norquist and Stephen Moore's Club for Growth. He called for a value-added tax so the government can pay its bills. While he dressed it up on the rhetoric of the Republican's inability to shrink government, I suspect all but the most ideologically committed anti-taxers (put the president in that category) are beginning to realize that protecting the full faith and credit of the United States isn't such a bad idea.