Thursday, July 14, 2005

The Social Security Lie


Ok, yes, indeed, I appreciate how creepy a picture that is, but it does make the case about Bush in a very understandable way. For those not familiar with the term, "He speaks with a forked tongue", according to Wikpedia the term "forked tongue" means: to say one thing and mean another or, in more general terms, to act in a duplicitous manner. I suppose if I wanted to rail on I could get into all sorts of reasons for why I think Bush speaks with a forked tongue, but I'll just keep it on the subject of social security inasmuch as I just finished reading The Plot Against Social Security: How The Bush Administration Is Endangering Our Financial Future by Michael A. Hiltzik:

Overall it's a very readable book for anyone inclined to want to read about social security. Frankly I think nearly all of us should be up on social security, especially given what many people, in particular those in currently power, would like to do to the program. Hiltzik explains what the program is about, not all of which even at this point could I comfortably explain (this is genuinely a difficult topic to get your brain around), and why what you're seeing right now out of this administration on this subject is ideological and NOT good for you. The destruction of social security is the primary goal of libertarians and a large number of conservatives who feel people should have the freedom to save for their own future (in spite of the stark reality that unless forced to far too many people don't save for the future), and not be dependent on governmental "paternalism" --- how it's paternal in this situation escapes me exactly, but that's what they say.

Here are some of the lies dripping from the tongues of Bush and company:

- There is no trust fund, the government spent the money.

- The money won't be there for the next generation and may not be there for all of the baby boomers, and private accounts are the only way to fix this.

- The program itself is going to run out of money in either 2018 or 2042, you choose the year.

- You'll "own" your retirement (no, actually, your heirs will own it for as much as there may be anything left to bequeath.)

- Investing in the stock market will give you better returns than investing in social security [see below point regarding this.]

- African Americans are cheated out of their full returns from social security [it's true, male African Americans tend to die before their white counterparts, but in the way life has of evening things out, African Americans make up for this in benefits for widows and children, and in the social security disability provisions.]

I could go on and on. Bush has stacked the deck the committee that was to "look into what we should do with social security" --- first he gives the committee running orders that excludes any options besides privatization and the people he puts on the committee are ideologically inclined towards privatization. Can we guess what they're going to recommend? The fact is that this administration hasn't even given consideration to alternative social security solutions that they were not ideologically committed to --- facts and realities be damned. Well, heck, this IS a faith-based administration, after all.

Bush has spent a huge amount of money running around the country trying to scare people into believing that social security is going under and privatization is the only option we have to rescue something out of the sinking. He has people like Rick Santorum spewing the same lies. Fortunately, on the whole, they seem to have been unsuccessful. For whatever reason the American people aren't buying into this, and I just hope they stay the course, though at the same time I hope they're ready and willing to do what IS necessary to keep the program viable.

The fact is the only people that make out by privatizing social security are those who are well off to begin with (i.e. the rich) --- they're already invested in stocks and other vehicles to cover their retirement so privatization works out for them to be more of the same (though you'd think they'd want to have a sure thing on the side just in case.) In addition insurance companies (where, with the money in your privatized account, you'd buy your mandatory annuity when you finally retired), and investment companies who'd handle where you money went while you were accummulating that money in your privatized account, both do very good under privatization. Why, you may ask? Of course we'd have to include the costs associated with taking on that annuity (which can be up to as much as 20% of what you put in), and the cost of investment people handling your investments --- collectively this is no small thing and it can easily work out to be more expensive than any gain over what you'd have with social security that you might conceivably realize from privatizing (which has been the case in Chile, Britain, and Argentina, the three places thus far where this has been tried, so far not very successfully.)

Here's the take away message: Social security should be there for everyone, and certainly can be there if we were to make the adjustments to the program that would allow it to sustain itself as we now know it. But the options for this are not on the table as far as the Bush administration is concerned, which is fixed on privatization not because of fiscal reasons but solely due to ideology. Something needs to be done about social security, but privatization isn't it.


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