Bush plan to destroy Social Security

Atrios asks, "Why Does the Media Hate Social Security?"


This won't mean much after President Bush is done with it.

President Bush plans to spend his political capital in order to fulfill a long-time Republican dream of crushing the Social Security program. This sport is as old as Alf Landon's 1936 attempt to unseat President Roosevelt. Landon's big-newspaper supporters threw up all sorts of scare tacticts against Social Security in that thankfully losing effort.

I agree with many commenters to the Eschaton post cited above that corporate media owners and other rich folks hate the program because, as one comment writer says, "They don't need SS and could not care less about it's fate."

I'd go farther and say that many rich Republicans view the program with jealousy. It's money the government reserves for the whole spectrum of little people that they can't appropriate for themselves or shut off by fiat. They have to pay the payroll tax, but they can't discipline workers by threatening to cut their Social Security. At least not until now – Bush may have enough political and media juice lined up to force large benefit cuts for future retirees in order to dump a large number of dollars from payroll taxes into the coffers of Wall Street investment casinos.

The media mythology that has become part and parcel of reporting on Social Security (see FAIR's recent go-round with CBS news for phoniness on the issue) has developed over nearly a decade of hysterical crisis mongering by the libertarian reactionaries at the Cato Institute. Their innocuously named website, http://www.socialsecurity.org/ is the media clearinghouse for framing the terms of the debate. Here is a sample of the Cato hustle:

Social Security is going bankrupt. The federal government's largest spending program, accounting for nearly 22 percent of all federal spending, faces irresistible demographic and fiscal pressures that threaten the future retirement security of today's young workers. According to the 2003 report of the Social Security system's Board of Trustees, in 2018, just 14 years from now, the Social Security system will begin to run a deficit. That is, it will begin to spend more on benefits than it brings in through taxes. Anyone who has ever run a business--or balanced a checkbook--understands that when you are spending more than you bring in, something has to give--you need to start either earning more money or spending less to keep things balanced. For Social Security, that means either higher taxes or lower benefits.

You bet, lower benefits. That stings me hard because the minimal existing benefits are absolutely essential to my own low-dollar retirement plan. Media outlets are likely to swallow and regurgitate this official-sounding crap hook, line and sinker.

Bush last week at the economic dog show (no critical voices present) reiterated the mythology:

One of the things that we heard today from experts is that the Social Security system is safe today, but is in serious danger as we head down the road of the 21st century. And this problem has got to be confronted now. And we heard from people that know what they're talking about on this stage this morning, saying that it is a far easier problem to manage today than it will be if we continue postponing solutions.

In 1950, there were 16 workers paying for every beneficiary. Today, there are about three, and when the younger workers retire, there will be only two workers per beneficiary. That should be a warning signal for those of us who are charged with having to confront problems and not pass them on to future Congresses or future generations. The system becomes untenable within a relatively quick period of time. The Social Security system is in the black today, but in the long-term, has $10.4 trillion in unfunded liability -- that's trillion with a "T." That means that a 20-year-old worker today is being promised retirement benefits that are 30 percent higher than the system can pay. By the year 2018, Social Security will pay out more in benefits than the government collects in payroll taxes. And once that line into red has been crossed, the shortfalls will grow larger with each passing year. We have a problem.

First, the whole thing about number of working people per retiree that you hear again and again and again is a huge red herring. The supposedly dramatic downward shift in the ratio over seven decades does not mean anything until you look at the so-called trust fund ratio. Then, the shift is not nearly so dramatic because over the years worker productivity has increased, as has the payroll tax rate. Four decades from now the program will have to seek additional funding sources to replace a slowly declining ratio. And as the SSA trustees admit, there is great uncertainty in these projections. While it's worth paying attention and making wise fiscal choices that Bush is not now making vis-a-vis the idiotic tax cuts, this is hardly a crisis today.

The Bush "solution" of private accounts for worker-beneficiaries in stock market investments has a dually contractictory premise. First, there is no way that private accounts would solve Social Security's woes if the economy were bad. But if economic times were good enough to produce historical-average returns for stocks, then there would be no Social Security funding crisis!

Here are some additional references worth reading for facts on the phony crisis...

First, a nice little site with lots of links to reports from the reality-based world: The Bruce Web: Social Security is not Broke

See also The Trillion Dollar Hustle: Hello Wall Street, Goodbye Social Security. By Thomas Frank. From Harpers, June 2002. Excerpt:

You've heard this many times before, of course: from the Beardstown Ladies to the Raging Bull website, this was the ideological fantasy of the last decade. This time, though, it is being replayed not to sell us on some mutual fund or hot tech issue but to convince us to bet it all—to liquidate what remains of the welfare state, head down to the great casino, and put our trust in Greenspan. Social Security privatization is to be the trillion-dollar hustle, Wall Street's final joke on those who just can't shake the free-market superstition.

Finally, lots and lots and lots of documents are linked here: Social Security Website Links from EBRI