Social Security Facts vs Fog

by: DaveJ

Wed Nov 24, 2010 at 17:30


Conservative just hate Social Security.  The Social Security program is an example of government at its best.  It demonstrates We, the People taking care of and watching out for each other.  It works, it is efficient and effective, and people love it.  For their war against government to work conservatives have to find a way to undermine Social Security.

Conservatives have been at war with Social Security since its inception.  They call it a "Ponzi scheme." They claim that it is "going broke." They claim that people live longer so we should increase the retirement age... They claim a lot of things.  The question is, are any of them true?  Or is each just one more area where conservatives are trying to throw up a smokescreen to mask their real intentions?  (because it's what they do.)  

How much of what we hear about Social Security are facts, and how much is just fog?

One thing that most people do not know is that conservatives have been following an actual plan, a step-by-step strategy to get rid of Social Security, that was laid out a couple of decades a go.  A 1983 Cato Institute Journal document, "Achieving a Leninist Strategy" by Stuart Butler of the Cato Institute and Peter Germanis of The Heritage Foundation lays it out for us.  The document is still available at Cato, and select quotes are available at Plotting Privatization? from Z Magazine.  It is worth reading the entire document (in particular the section "Weakening the Opposition") to understand completely the strategy that has been unfolding in the years since, but the following quotes give you an idea:

DaveJ :: Social Security Facts vs Fog
"Lenin recognized that fundamental change is contingent upon ... its success in isolating and weakening its opponents. ... we would do well to draw a few lessons from the Leninist strategy."

" construct ... a coalition that will ... reap benefits from the IRA-based private system ... but also the banks, insurance companies, and other institutions that will gain from providing such plans to the public."

"The first element consists of a campaign to achieve small legislative changes that embellish the present IRA system, making it in practice a small-scale private Social Security system.

"The second main element ... involves what one might crudely call guerrilla warfare against both the current Social Security system and the coalition that supports it."

"The banking industry and other business groups that can benefit from expanded IRAs ..."  "... the strategy must be to propose moving to a private Social Security system in such a way as to ... neutralize ... the coalition that supports the existing system."

"The next Social Security crisis may be further away than many people believe. ... it could be many years before the conditions are such that a radical reform of Social Security is possible. But then, as Lenin well knew, to be a successful revolutionary, one must also be patient and consistently plan for real reform."


So there you have it.  This shows how many of the arguments are just fog, not fact.  And it shows how private interests intend to "reap benefits" from getting rid of Social Security: namely, they get a lot of the money instead of the retirees.

This time the attack is riding piggyback on concerns about budget deficits.  First there was a big bruhaha about deficits, then the answer is offered: cut Social Security's benefits.  But Social Security is not allowed to borrow by law, so it cannot contribute to deficits.  In fact, since the 1983 changes in the program Social Security has run surpluses, not deficits, and has built up a huge trust fund! Social Security won't run short until possibly 2037, and even then can pay most of its benefits with no changes.  (Compare that to the military budget, which has to borrow hundreds of billions every single year.)

Last time it was President George W Bush attacking the program.  Remember?  Social Security was supposed to be "in crisis" and needed to be "privatized." The fog machine was trying to convince us to put the money into the stock market.  But progressives rallied, saved the program, and now it is years later and the program is fine.  Imagine where we would be if the program had been put into stocks!

Other times the fog machine has told us that Social Security "has a lower return" than putting the money into other investments, even though it is more than just retirement funds and also provides disability payments and other benefits.  Or that there aren't as many workers per retiree as there used to be, even though that is not how the program works.  Or that people live longer, even though that is mostly because fewer babies die.  (The program was designed for increasing longevity and the 1983 changes accounted for any differences.)  There is always a new attack.  

Whatever the current attack might be, keep in mind that it is just one more attack.  Instead of spending all your time trying to refute each lie while they throw up a dozen more, remember that they hate Social Security and they just lie.  Of course, there is a risk that each time Social Security is attacked more of the public will get the idea that something must be wrong with the program, when there isn't.  Keeping in mind that there is a corporate/conservative strategy at work to undermine the program helps to fight off the fog.

For politicians, Nancy Altman and Eric Kingson of the Strengthen Social Security coalition have a warning.  In an LA Times op-ed the other day, Touching the 'third rail', they wrote,

For all the talk of polarization, the American people are clear and united about Social Security. A recent poll of those who voted in the midterm election found that 67% of respondents opposed cuts in benefits; 69% opposed raising the Social Security retirement age to 69. Respondents were also clear about what steps should be taken to address a looming shortfall. Some 66% of those polled favored doing away with the current cap on payroll taxes to fund Social Security. Currently, taxpayers are taxed only on their first $106,800 in income. Simply requiring upper-income taxpayers to pay the tax on all their income would bring in enough revenue to allow benefits to be raised across the board and still have the program in balance for at least the next 75 years.

. . . The message of the midterm election is that the American people are fed up with Washington elites who don't seem to listen. Despite the clear view of the American people, the elites in Washington seem to think it would be better to reduce benefits than to require the wealthy to pay the same percentage of their salaries into Social Security as everyone else does.

If politicians choose to cut Social Security benefits, when they could simply scrap the cap, we predict that this midterm will seem like a walk in the park compared to what awaits them in 2012.

Take Action

Don't mess with Social Security!  November 30 is national Call Congress day, to say HANDS OFF SOCIAL SECURITY!  Click the link to learn more.

Also, sign this petition from Campaign for America's Future and CREDO Action, Tell Obama: Reject Social Security Cuts

(Also see Angry Bear: BW on Soc Sec V: What does Lenin have to do with this?)


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. (0.00 / 0)
I'm going provide some actual data since the dog ate your links for your statements.

"Or that there aren't as many workers per retiree as there used to be, even though that is not how the program works."

Number of Americans older than 65 in 1940: 9.0 million
Number of Americans older than 65 in 2000: 34.9 million
%increase 287.8%

Number of Americans in 1940: 132,164,569
Number of Americans in 2000: 281,421,906
%increase 112.9% increase

In 1940: 6.8% of the population could collect social security
In 2000: 12.1% of the population could collect social security

Social security is set up as a system where current workers directly fund current retirees. Currently, the social security trust fund can build a surplus, but apparently cannot go into the negatives. This does set it up to be vulnerable to demographic shifts in periods of time where retirees outnumber workers. One solution might be to allow the fund to take on debt to maintain benefits riding out the typical cyclical nature of demographics.

"Or that people live longer, even though that is mostly because fewer babies die."

Life expectancy in 1950 at age 65:
Male: 12.7 Female 14.7
Life expectancy in 2007 at age 65:
Male: 17.2 Female: 19.9
Delta Increase: 4.5 years for males 5.2 years for females

Social security retirement age maximum at inception: 65
Social security retirement age maximum current: 67
Delta Increase: 2 Years

http://www.ssa.gov/history/lif...
http://www.cdc.gov/NCHS/data/n...
http://govpubs.lib.umn.edu/cen...
http://www.ssa.gov/retire2/age...



The point (4.00 / 4)
is that none of these right-wing talking points affect Social Security.  They are just tricks to make people think something is wrong with Social Security.

It DOESN'T MATTER how many workers per retiree there are.

It DOESN'T MATTER what percentage is on Social Security.

It DOESN'T MATTER if life expectancy has changed.

These things have no relationship with how Social Security is funded. Saying these things is only a trick to undermine people's understanding of the program.

--

Seeing The Forest -- Who is our economy FOR, anyway? Twitter: dcjohnson


[ Parent ]
Totally Agree, Dave (4.00 / 1)
Social Security is already well designed for the demographic conditions in the United States. Arguably even over-designed.

Just a couple points on other demographic realities:

1. If families are smaller (they are), Social Security pays out less in survivors' benefits (the classic widows and orphans benefits which are also part of Social Security).

2. If workers are healthier (they are), they collect less in Social Security disability benefits. They also pay more into Social Security.

To extend the Social Security trust fund out to 75 years is trivially easy. We could eliminate the cap on Social Security contributions so that everybody pays the same percentage of their income in contributions -- just like Medicare contributions. And Social Security taxes could be extended to non-wage income, including (indexed) capital gains. That change in payroll tax collection would generate so much inflow to Social Security that Social Security could adopt practically any combination of these improvements:

* Lower the retirement age for blue collar workers and for long-term unemployed workers;
* Exempt the first $10,000 of income from Social Security payroll taxes.
* Lower the tax rate.

The first improvement would substantially decrease government outlays elsewhere (for unemployment benefits and for disability benefits), so it would cost very little anyway. The second would make Social Security taxation more progressive. (Right now it's quite regressive.)

We should be campaigning for making Social Security even better. And it's so easy to do: it's already the healthiest, most financially secure part of the federal budget.


[ Parent ]
re: ss (4.00 / 2)
Social Security won't run short until possibly 2037, and even then can pay most of its benefits with no changes.  (Compare that to the military budget, which has to borrow hundreds of billions every single year.)

and those reduced 2037 benefits, will still be higher than the current ones


link (4.00 / 1)
Social Security ... would be able to pay out 78% of scheduled benefits by 2037, which in actual dollars will be more than today's payout.
http://news.firedoglake.com/20...

another thing we forget sometimes is that:

Everybody pushing the increase of the retirement age seems to forget that it's already rising for people born after 1960. It's going up to 67 for full benefits; at 62 you'll be able to receive 70%, with steps up from there. They never seem to mention this increase, put into place in the 1983 reform.


[ Parent ]
Anti-Social Security Propaganda (0.00 / 0)
I just emailed this piece to my two sons, 41 and 37, both progressives (pretty much), both of whom have been exposed for all of their adult lives to the right-wing fiction that Social Security is in peril and needs fixing; that it just won't be there, for them, the way it's been there in the past for their grandparents, and now their parents.

When you see this constantly, when you hear it constantly, it leaves an impression; how can it not?

So while it's absolutely true that a majority of Americans continue to support Social Security, it's also true that there's a sharp break, by age category, in the degree of that support: the lower the age, the lower the support (and the higher the support for some kind of privatized accounts).

Are we headed, inexorably, toward privatization of Social Security (which of course is a refutation of the very words "Social Security")? Are we headed, inexorably, toward a two-tier Social Security system (full benefits for those over a certain age, reduced benefits plus partially privatized accounts for those under that age)? We already  have two-tier wage systems in place, with more on the way. How long before two-tier Social Security?


Such beliefs are based entirely on ignorance and delusion (0.00 / 0)
Anyone who actually bothered to study how SS works would quickly realize that, left alone, it cannot possibly go broke, unless something far more catastrophic happened. Anyone who claims otherwise is simply ignorant, dishonest, lazy or nuts.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton

[ Parent ]
It's like pushing to privatize reservoirs (4.00 / 1)
because it hasn't been raining much lately. As if the private sector can make it rain. More likely, it would charge more for dirtier water.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton

Most comments (0.00 / 0)
There is a reason so many Republicans blast Social Security and it is because it seems to be a toxic subject that GOP'ers feel they can get public points for bashing it

When Republicans discuss it, there is a reason that few if any go into DETAIL about it. Most have no clue about it. They just discuss the talking points that Fox News gave them and switch subjects quickly


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