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Wednesday, August 10, 2011


It seems that every 10 or so years, when the Republicans/ReThugs/TeaPartiers are in power, they attack our very much tattered and worn social safety net. The Paul Ryan Budget with its Medicare voucher system is just the latest (and the most egregious) in a very long series of attacks. The ultimate goal, of course, is to completely privatize all the social welfare programs so that the private sector that has bought and paid for most if not all of the “elected” officials can make even more obscene amounts of money for themselves and their shareholders. Let’s take a look at what that’s going to entail, shall we?

I did quite a bit of research on Social Security when the pResident Bu$hit started making noises about privatization early on in his first term, and the numbers that I came up with really surprized me. For one thing, Social Security pays for itself, and usually has a cash surplus. The funds are invested in what are known as “special” Treasury securities, which simply means that, unlike the rest of the world, the Social Security Administration can redeem them whenever it wants to, if it needs the money to cover unexpected expenses, and this will be done at full face value. That’s 100 cents per dollar. Average interest on the reserve is at least 5 – 7 points over market value. While this isn’t a whole lot of money in the general scheme of things, it’s a fairly hefty chunk of change, which is held in trust, and, supposedly, is completely untouchable by anybody except the Social Security Administration, and the FedGov.

Unfortunately, when the pols on either side of the aisle start blabbering on about “balancing the budget”, they are actually slobbering over the prospect of being able to get their greedy little hands on the excess Social Security taxes that are being collected and held against future need. From what I was able to find out, this money is being double-counted, once as reserve, and once as revenue.

Don't FedGov accountants have FUN?

I actually don’t have a problem with privatization, up to a point. I believe that all of us in our 50s and 60s that are looking toward the future when we can retire, and when all we’ll have for the most part is the little bit of money that the FedGov helped us save over the years, should get full benefits as they are currently set up. I also believe that, IF a company such as The Hartford, which is basically a company that manages annuities and pensions were to take over half of the Social Security accounts of everybody that’s, say, 45 or younger and managed the money while allowing the owner of the account to withdraw said monies after a 10 year investiture while leaving the rest of the Social Security safety net firmly in place, that this MIGHT be a good thing. Set up each account like a trust fund, for example, where after that 10 years (or whatever period of time is set up) the owner of the account can draw a quarterly check for the interest that’s accrued in the account IF THEY WANT TO DO SO. The other safeguard MUST be that the owner of the account cannot draw against the account other than the quarterly interest payments for any reason whatsoever. Period. Otherwise, we’d have the housing mess all over again.

I do NOT believe that, under any circumstances, all of a person’s Social Security money should be turned over to that person to do with as she/he pleases. Trust me on this one, gangers; some folks would do great, most would do OK, and at least 20% would lose every penny. Which, incidentally, is why I say that only HALF of the Social Security monies collected would go into the personal account. There would at least be a little something for the individual to collect, even if it wasn’t a lot.

We don’t need a balanced budget that is predicated on doing away with our social safety net. We don’t need a balanced budget amendment, either. I agree that there is a lot of waste and duplication in Social Security, Medicare and Medicaid, and that reforming the system to get rid of the waste and duplication would result in a lot more money being available. I do NOT agree with the chuckleheaded notion that the minute that the three programs are made into Six Sigma versions of themselves and all that extra money is available, that said money needs to immediately be taken out OF the systems and spent. It should, rather, go into the trusts that were set up to handle it where it will earn interest and provide a hedge against the future.

There are other problems with privatization as well that I haven’t heard anybody talking about at all. One of them is the generational one: Who is going to pay for TWO systems while the privatization is being phased in? I’ll tell you who: the younger generation, people in their 40s, early 50s and younger. So, where’s the benefit in making these folks into poverty-stricken peons? The answer is simple: there IS no benefit, either to the folks that are supporting the systems, plural, while impoverishing themselves, or the folks that are already drawing benefits from the systems, plural.

The real tragedy is that, given sufficient impetus, the TeaPartiers/ReThugs and even a few Republicans of the old school really WOULD rather that people starved to death in the heat and the dark. After all, what good are all these old people? Or the people that get SSI because they’re disabled. Again, what good are *THEY*? And why are they hanging around, taking up space and wasting money and resources that they really shouldn’t be getting? Yes, I’ve actually heard that argument made, and so has everybody else. Listen to what Paul Ryan says, for example, or Michele Bachman. Problem is, we’re just not dying off fast enough. I’ve long thought that the Republican Party and its various permutations didn’t really give a shit about the people that they were elected to serve; with the TeaPartiers, it’s not a thought any more. It’s a fact of life that should serve as a reality check for us all.

We’ve wasted tens of billions of dollars in two wars, rebuilding the infrastructures of two countries that would rather see us all dead. Leon Panetta bluntly told the President the other day that he (Panetta) would not allow the defense budget to be cut. Period. Yeah. Right. Take 20 billion out of the defense budget, and we could pay for every bit of infrastructure repair that is needed in OUR country, incidentally putting a minimum of 6 million people to work. Take 2 trillion dollars of the money that is currently being wasted in Afghanistan and Iraq, and apply that to our country’s social safety net. Shoot, we could fund Social Security, Medicare and Medicaid for the next 100 years, even with a 1000% increase in benefits, if we did something like that. Here’s another way to save at least 2 trillion MORE dollars: Get rid of the paper checks; put EVERYTHING on line. Use check-chasing cards for the folks that are used to dealing with that permutation of the financial network, and educate the rest of the people in how to use them.

Of course, that’s not ever going to happen. After all, why should it? Goodness, if we as a country did something like that, we’d be able to pay for the social welfare network. We’d also be able to fund universal health care – but that’s another column.

1 comment:

  1. A couple of points about SS and privatization. First, SS was not intended to be a pension. It is social safety net insurance. It was conceived, in the response to the Great Depression, to provide minimal old age protections against the vagaries of capitalism, private markets, and individual financial misfortune. Second, how many more lives would have been even more devastated had SS accounts been invested in the market in 2008?