Social Security

A Way to Make Social Security Solvent for the Next 75 Years: Senator Sanders. (8/16/2010)

Situation Room Still Scaring on Social Security (8/16/2010)

Hands Off Social Security, There are better ways to cut the National Debt (6/29/2010)

Meet the Man Who Perversely Argues for Cutting Social Security Benefits to "Take Care of the Lesser People in Society"  (6/18/2010)

Social Security Works

Republicans wanted to privatize Social Security and allow you to manage your own money. You still think that is a good idea after the last couple of years of financial meltdown ? Well, guess what. They are still determined to do it.

Looting Social Security (1/5/2010) William Greider, The Nation.

The financial services industry has donated large amounts of money to both Republicans and Democrats, and the one thing that both parties can agree is that they need to fix Social Security. Well funded ( and right wing) ‘think’ tanks like the CATO Institute and the Concord Coalition have been promoting the idea that Social Security is in deep trouble, and that in another thirty years or so, that it will not be able to keep paying full benefits.

The mainstream press never questions that there is a problem. Projections that Social Security will be in trouble rest on the premise that the economy will grow at a rate considerably below its long-term average. Low long-term rates of growth imply a period of economic decline that would itself be news. At average long-term growth rates, there is not much of problem and it is certainly not an emergency. See the article, “Nine Misconceptions about Social Security” in Atlantic for July 1998.
 William Shipman of State Street Bank told the magazine Pensions & Investments that if privatization were to succeed “You could be staring at 130 million new accounts” and it would add millions in custodial fees to the pension assets it manages. Such a change will certainly benefit bankers and investment brokers with many millions of new accounts, but there is little chance that it will function as efficiently or as well as the present system when you consider the often very large private salaries, and expenses for sales, telemarketing, and advertising.

After a severe economic downturn in the 1930’s Social Security was designed as an insurance program, a stimulus for broad-based demand, and a damper for the business cycle.  Paul Krugman in Foreign Affairs magazine wrote there is now an eerie similarity in today’s markets to those of 1929. George Soros has written that uncontrolled capital flows act like a wrecking ball that can destroy national economies and possibly render international mechanisms ineffective.  The widening distribution of income is also likely to result in a more volatile economy. You may want to go it alone, but a lot of us don’t.

According to the privatizers, the Social Security guarantee would better be converted into a risk based program. Most people are not market savy, and, although investing can be educational,  past returns are not assured for the future.

When the politicians say they will ‘fix’ Social Security, keep in mind that all proposals before the Congress will reduce benefits.

  Anyway there are already sufficient numbers of ‘private accounts’ like 401K; IRAs, Roth IRAs, Medical Savings Accounts (MSA’s), and others so that adding a new species of account can only further complicate the tax code.

The privatizers ignore other functions of Social Security including disability payments or survivors benefits.
In June, Rep. Charles Rangel, ranking member of the House Ways and Means Committee, released a Congressional Research Service (CRS) analysis on the extent to which three Social Security reform proposals would reduce defined Social Security benefits:
* a proposal by the National Commission on Retirement Policy, a panel of Members of Congress and private citizens organized by the Center for Strategic and International Studies (legislation recently introduced in the Senate by Senators Judd Gregg, John Breaux and a few other senators — S. 2313 — and in the House by Reps. Jim Kolbe, Charles Stenholm, and others — H.R. 4256 — is based on the NCRP proposal); and
* the bill introduced by Senators Daniel Patrick Moynihan and Robert Kerrey (S. 1792);
* a May 1998 proposal by Robert Ball, commissioner of the Social Security Administration under Presidents Kennedy, Johnson, and Nixon and a member of the 1994-1996 Social Security Advisory Council. According to the CRS, none of the proposed plans will improve benefits. Over the next 75 years, average Social Security benefits would be 23 percent lower under the NCRP plan than under the current benefit structure, 16 percent lower under the Moynihan-Kerrey plan than under the current benefit structure, and six percent lower under the Ball plan. (This was posted on the internet by CRS.)
Right now, SS tax only applies to the first $62,000 , so it is very regressive. Your Congressman, for example, pays a rate about half of most working people. Simply removing the cap would eliminate the problem. So would raising the rate by 1%. These solutions are not part of the agenda though, and are not up for discussion.
Trudy Lieberman’s (January 27, 1997) article in the Nation described Social Security privatization … “not so much a movement as an attempted heist, robbing Americans of perfectly good social insurance.”

Republicans are still anxious to 'privatize' it.

Why are Democrats losing the Social Security Issue ?

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