The $12 Trillion Question
Could economists have overlooked $12 trillion in potential tax revenues in the coming years – enough to completely offset the projected Social Security crisis? That’s the question posed by (admittedly suspicious Reagan-era economist) Michael Boskin in a paper soon to be published by the Hoover Institution, and reported recently in the Wall Street Journal. Initial reaction among professionals is guarded, but the claims are not being shot down out of hand.
At issue are the anticipated revenues from tax-deferred savings accounts (IRAs, 401Ks and SEPs) that will start to be drawn down as baby-boomers retire. There is apparently a new way of modeling the assumptions around how this money will be spent and taxed that could yield between $9 and $19 trillion in unforecast tax revenues through 2050.
If true, this entirely changes the economic policy debate, and for the better, I might add. Suddenly, Bush’s tax giveaways just seem like highly partisan and misguided proposals, not the single most irresponsible and ruinous fiscal policy ever proposed. It’s still bad medicine, but he’s not, in the words of William Bennett, betting the milk money.
More on this subject later as the details become clearer. Vacation starts in 6 hours…
8:45:03 AM 
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