Social Security

America will die old and broke: The systematic right-wing plot to ransack the middle-class nest egg

America will die old and broke: The systematic right-wing plot to ransack the middle-class nest egg

Scott Walker, David Koch, Chris Christie (Credit: AP/Reuters/Mark Humphrey/Brendan Mcdermid/Rich Schultz/Photo montage by Salon)

SALON

Despite what conservatives say, the safety net works—which is why the 1 percent wants to stage a hostile takeover…

Through a quirk in state term limits combined with a terrible midterm election, the Nevada legislature has been taken over by amateurs and extremists. The legislature is now debating whether to dismantle the Nevada public employee pension system (PERS), a system that has gotten consistently high marks for transparency, responsibility and stewardship.

This attack on retirement benefits follows a very familiar pattern of fabricating data to destroy retirements that work and that people really like. It’s the same nonsense and lies used to destroy private pensions two decades ago, but this time it’s being done as part of a partisan wet dream of “limited government.” It’s a strategy as American as fast food and crumbling infrastructure.

This latest skirmish in the retirement wars perpetuates the biggest lie ever foisted on America—that we cannot afford retirement benefits.

Private pensions have indeed been systematically destroyed in recent decades, and replaced by “defined contribution” 401k plans. The conventional wisdom is that pensions are “too expensive,” but this is the heart of the lie. A great many private pensions were once over-funded, but a change in law allowed companies to “invest” the “excess” funding in other parts of their business. Once businessmen could legally raid the pension fund, the idea of private pensions was over. Many books have been written about the great pension theft. I recommend, for one, reading “Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers.“ Spoiler alert: you will feel rage.

I’m no bystander in all this, because I’m a member of the Nevada pension system through my day job.  Even when I considered myself a Republican, I supported the pension system, just as my conservative friends and colleagues still do. But a lot has changed in a few years. Public pensions used to have bipartisan support, but the dysfunction and extremism that has turned Washington D.C .into a shit-show has spread to states like mine.

The attacks on benefits are always underhanded and dishonest, an effort to keep critics quiet, and this latest attempt is no exception, because it only targets future members of the pension system. It’s the same tactic used in the constant assault on Social Security — just take it from people who don’t have it yet. My favorite visual is the conservative who collects Social Security month after month (after month after month) then votes for politicians who will destroy those very modest benefits for his children — all while reciting the false narrative of “not saddling” those same children with debt.

A better idea (rather than stealing from our own children) would be to pay the reasonable levels of taxes necessary to fund the programs we all use. But “family values” conservatives are always delighted to burn the crops and salt the earth behind them, children be damned.

It’s understandable that people without pensions resent those who still have them. It’s much easier to rage about a schoolteacher’s pension than it is to understand the systemic greed of high finance, and that’s by design. The rich and powerful who looted private pensions have managed to set the members of the middle class upon one another. At the same time, the purveyors of 401k plans get rich off of fees from individual accounts. Millions of people are shuffled into the market to be preyed upon by the vultures of high finance, who get paid no matter how much money you win or lose in the grand casino.

I admit that there are reasonable criticisms of pensions. There are always a few people, an overpaid manager or administrator perhaps, who manage to game the system through overtime pay or inflated salaries. Critics can point to the handful of people with six-figure pensions with understandable fury, but to extrapolate it to everyone is plain hogwash. In my own pension system, the average monthly benefit for regular retirees is around 2,200 a month, and retirees are not eligible for Social Security.

For those who think pensions should all be abolished, I’d draw your attention to the constant attacks on Social Security. “Serious” rightwing presidential candidates, and even some Democrats, have proposed upping the retirement age, cutting benefits and in general making life a little less pleasant for retirees.  The hope is that many of us will die before we can collect what we’ve earned through decades of work. Even though the “trust fund” has a balance of trillions of dollars, the money has been used to fund everyday government spending. Politicians would rather loot your retirement rather than fund government spending with honest taxation.

I’m not even saying that we have to sacrifice other spending priorities to fund retirements, because there’s enough wealth in this country to do both.

But the very question of affordability is moot, because the attack on retirement has nothing at all to do with money. The real goal of conservatives is to break government, so that Wall Street and the well-connected can feast upon the carcass, gorging themselves on ill-conceived privatization schemes. America has become epitome of a failing company, and politicians are acting as the investment banker, breaking what’s left into pieces to sell off for quick cash.

As a member of Generation X, I’ve spent my adult life riding waves of bubbles, watching housing values implode, retirement accounts halved and job prospects evaporate. With each subsequent crisis, I and my cohort are asked to “give up a little more” to help the country “recover,” even as a tiny fraction of people and corporations reach unprecedented, unimaginable levels of wealth. This disparity is unsustainable.

I can almost sympathize with the Tea Party, a group built on similar feelings of frustration and anger. Their only mistake is that they do not see who is really picking their pockets. It’s not immigrants, “the gays” or liberals. Tea Partiers have tragically bought into the total nonsense that “poor people” are somehow responsible for the malaise of the middle class. It would be almost amusing if it weren’t so tragic. Today’s Tea Party voter is willing to sell out the future of his own child, because he can’t see through bullshit shouted at him by Fox News every day.

We cannot afford pensions or health care or food stamps, but, by god, we can afford $1.5 trillion for a plane that doesn’t fly

Like so many workers, I’ve watched my benefits erode year after year, with frozen salaries, forced unpaid days off and ever more stingy medical benefits.  I take heart that the latest attempt to destroy the pension system seems doomed, if only because it will cost more money to wreck it than to leave it alone. But the greater war on pensions and Social Security is not over.

Libertarians and conservatives will not rest until they have unmade the last century of progress and the entire New Deal.  They will destroy and dismantle, vilify and divide, because it’s easier to make people resent one another than to make society better. They want to not only halt progress, but to turn back the hands of time. It’s not just pensions, but overtime pay, weekends and the forty-hour workweek that are all in danger. It’s an act of self-destruction and stupidity. They drill holes in a leaky boat in which we are all riding, somehow unaware that when the boat sinks, they will also drown.

Social Security and its role in the nation’s debt

This information is vital when debating right-wingers who blame a large part of the deficit on Social Security…

The Washington Post Fact Checker

“Social Security has not added one penny to the deficit.”

— Sen. Richard Durbin (D-Ill.), Nov. 27, 2012

In 2011, we evaluated a similar statement about Social Security and gave it a relatively rare rating — “true but false” — which seemed to please no one. Yet as the “fiscal cliff” negotiations have heated up, Democrats have once again been using this talking point to shield Social Security from the chopping block.

Durbin, to his credit, in a speech to the Center for American Progress this week, acknowledged that Social Security’s long-term financing is an important issue that cannot be deferred. He advocates creating a commission that would separately address how to ensure 75 years of solvency to the program.  So we don’t mean to pick on Durbin since plenty of Democrats in recent days have made similar comments.

But we remain troubled by the reemergence of this talking point, especially given the further decline in Social Security’s finances in the past year. We do not think this line is a slamdunk falsehood, as some believe, but it is certainly worth revisiting.

 

The Facts

Social Security is a pay-as-you-go system, which means that payments collected today are immediately used to pay benefits. Until recently, more payments were collected than were needed for benefits. So Social Security loaned the money to the U.S. government, which used it for other things, which in effect masked the overall size of the federal budget deficit.  In exchange, Social Security received interest-bearing Treasury securities, which now total more than $2.7 trillion.As we have repeatedly explained, the bonds held by Social Security are backed by the full faith and credit of the U.S. government. The bonds are a real asset to Social Security, but — here’s where it gets complicated — they also represent an obligation by the rest of the government. Like any entity that issues debt, such as a corporation, the government will have to make good on its obligations, generally by taking the money out of revenue, reducing expenses or issuing new debt.

So what is happening today? The Congressional Budget Office tracks the flow of money in and out of the Social Security fund, and below is a summary of the data for fiscal 2013. To keep things simple, we will include transfers made for the payroll tax holiday as part of “other income.”

Continue reading here…

How the rich created the Social Security “crisis”

Salon

The Bush tax cuts coupled with a decades-long smear campaign are the real threat to the successful program

Now and then, George W. Bush told the unvarnished truth—most often in jest. Consider the GOP presidential nominee’s Oct. 20, 2000, speech at a high-society $800-a-plate fundraiser at New York’s Waldorf-Astoria. Resplendent in a black tailcoat, waistcoat and white bow tie, Bush greeted the swells with evident satisfaction.

“This is an impressive crowd,” he said. “The haves and the have-mores. Some people call you the elites; I call you my base.”

Any questions?

Eight months later, President Bush delivered sweeping tax cuts to that patrician base. Given current hysteria over what a recent Washington Post article called “the runaway national debt,” it requires an act of historical memory to recall that the Bush administration rationalized reducing taxes on inherited wealth because paying down the debt too soon might roil financial markets.

Continue Reading

Debt Madness Was Always About Killing Social Security

Robert Scheer – Truthdig

This phony debt crisis has now passed through the looking glass into the realm where madness reigns. What should have been an uneventful moment in which lawmakers make good on the nation’s contractual obligations has instead been seized upon by Republican hypocrites as a moment to settle ideological scores that have nothing to do with the debt.

Hypocrites, because their radical free market ideology, and the resulting total deregulation of the financial markets, is what caused the debt to spiral out of control this last decade. That and the wars George W. Bush launched but didn’t have the integrity to responsibly finance. The consequence was a banking bubble and crash leading to a 50 percent run-up of the debt that has nothing to do with the “entitlements” that those same Republicans have always wanted to destroy.

Even Barack Obama has put cuts in those programs into play, warning ominously that a failure to lift the debt ceiling could cause the government to stop sending out Social Security checks. Why, when the Social Security trust fund is fully funded for the next quarter-century and is owed money by the U.S. Treasury rather than the other way around? Why would we pay foreign creditors before American seniors?  The answer, offered as conventional wisdom by leaders of both parties, is that we cannot endanger our credit by failing to back our bonds, even though the Republicans have aroused the alarm of the main U.S. credit rating agencies by their brinkmanship on the debt.

Continue reading here…

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Blunt Staffers Kick Out Seniors

Democratic Underground 

As Roy Blunt was touring Missouri, touting his Chamber of Commerce backing, constituents who wanted to visit with their Congressman found themselves directed to the nearest exit.

Roy Blunt probably wanted to assure the Chamber that he would vote for the privatization of Social Security and he didn’t want the seniors to hear that. 

  

Boehner: We Can’t Have the War AND Social Security – So We Need To Cut Social Security! | Crooks and Liars

 

 

Crooks & Liars 

I saw this and I couldn’t believe it. But then I thought, well, Boehner’s only saying out loud what some Democrats seem to believe anyway: We can’t afford the war AND Social Security, so naturally, Social Security’s gotta get slashed. 

Makes perfect sense, right? Because, you know, stopping the war would be simply unthinkable! (And wasn’t it the Republicans who first promised us the Iraq invasion would pay for itself?) 

Boehner’s criticism of the Democratic agenda then moved to the recently-negotiated financial regulatory reform package, which he likened to “killing an ant with a nuclear weapon.” According to the Pittsburgh Tribune-Review, Boehner argued that the financial system would be better served by “more transparency and better enforcement by regulators.” 

The minority leader also answered questions about Social Security, which he said could not remain solvent as it is currently structured. 

Ensuring there’s enough money to pay for the war will require reforming the country’s entitlement system, Boehner said. He said he’d favor increasing the Social Security retirement age to 70 for people who have at least 20 years until retirement, tying cost-of-living increases to the consumer price index rather than wage inflation and limiting payments to those who need them. 

“We need to look at the American people and explain to them that we’re broke,” Boehner said. “If you have substantial non-Social Security income while you’re retired, why are we paying you at a time when we’re broke? We just need to be honest with people. 

No, John. How about you being honest with people? Social Security is not broke. It’s solvent through 2036 and can fund about 80% of its obligations after that. All we have to do to fix it is to raise the current tax by one percent, and remove the cap on earnings that made Republicans so happy. You know that. 

You think we haven’t noticed the class war in this country? You think we’ve forgotten that Social Security is pay-as-you-go, and doesn’t have a damned thing to do with our national deficit. Why would you say something that’s a bold-faced lie? 

Because the Republicans have been dying to privatize the system ever since it began. They hate the idea of a financial transaction happening somewhere that doesn’t make money for their corporate sponsors on Wall Street. (And let’s not even get into what would have happened to a privatized system in the crash.) 

They want workers to be desperate and disposable, grateful for crumbs. 

That’s why Republicans always want means-testing. They want to turn Social Security into a poverty program so it won’t have such broad-based support. 

They’re trying to confuse and worry people with this manufactured deficit “crisis.” And they’re telling us it’s much more important to keep the war going than to take care of the people in this country. You saw the unemployment vote last week — that’s the Republican agenda, in all its naked glory. 

They want cheap, disposable labor with no security whatsoever. And if we don’t do something soon to stop them, we’ll have it.