"A government which robs Peter to pay Paul can always depend on the support of Paul." -George Bernard Shaw

Now that most of us have just paid our 1998 income tax, the Republican proposal to use the budget surplus to reduce taxes has great immediate appeal. On the other hand, the Democrats are proposing that we use the surplus to secure the future of Social Security and Medicare. Before we act too hastily, let's examine the main arguments advanced on both sides.

• "Cutting taxes will help stimulate the economy." The trouble with this argument is that the economy does not need stimulating. It is doing just fine, thank you, with the present level of taxation. Any extra stimulation could cause high inflation again.

• "Our tax burden is much too high." It may seem high at this time of year, but as a matter of fact, the United States has a lower tax load than MOST of the 23 Organization for Economic Cooperation and Development (OECD) countries! During the past 30 years, total tax receipts in the U.S. fluctuated between 18 and 30 percent of the nation's Gross Domestic Product (GDP). By contrast, Germany's tax receipts were around 38 percent and Denmark's 52 percent!

• "Social Security doesn't need the money." It's true that the Social Security system is currently receiving more money than it pays out in benefits; but that will change when the Baby Boomers start to retire.

• "The surplus belongs to the Social Security System." This is a valid argument because the surplus is mostly created by the current excess of Social Security revenues over benefits paid. This excess is being saved in the Social Security trust fund against the day when revenues will drop below benefits paid (in about ten years).

• "Social Security will soon go bankrupt." Actually, the trust fund probably will not run out of money for about thirty years, at the present rate of revenues and benefits. However, that projection is based on a lot of assumptions about retirement rates, death rates, growth of the economy, low inflation, etc., all of which are subject to change. If any of these assumptions turn out to be too optimistic, Social Security would run out of money sooner.

• "We need to fix Social Security before it's too late." Even though we have thirty years in which to fix the system, the longer we wait, the more painful the "fix" will be. Fixing it now can be done with some relatively minor changes such as reducing the Cost of Living Allowance (COLA) by one percent, or speeding up the scheduled raising of age of entitlement to full benefits.

Many argue that at least some of the surplus should be spent on health care because this is as pressing a need as saving the surplus for Social Security.

• "Medicare will run out of money before Social Security." This is true because the costs of medical care are escalating faster than the cost of retirement and survivor benefits. This is partly due to the increasing use of expensive treatments and the escalating costs of ordinary treatments.

• "Medicare should cover long-term care." Many elders find long-term care unaffordable and have to "spend down" most of their savings and assets in order to become eligible for long-term care paid for by Medicaid.

• "Medicare should cover the cost of prescription drugs." At present Medicare usually covers only the cost of drugs administered in a hospital. Many people on Medicare spend more on drugs than on their other medical care. Others argue that we also need better control of drug prices such as in Canada.

I'm convinced that we should save the surplus for Social Security and Medicare rather than squander it on tax cuts. What do you think?