The top 1% have been waiting their turn on Wall Street for many years now, patiently awaiting the day when their bible-thumping, gay-bashing, gun-toting and embarrassingly uninformed constituency will deliver them a presidency, house and senate majorities and the requisite right-wing courts that will open the floodgates to trillions upon trillions of your dollars and mine to their upturned palms until earth flames out.
It’s the grandest prize in all the political realm and it goes by the name of Social Security. And the Romney-types want to pry it from the hands of the government and deliver it to the green-tinted (tainted?) canyons of the Street to the eager clutches of venerable bank/brokerage money-houses.
Though a blue dress stain delayed a proposed step toward semi-privatization in a deal worked out between Bill Clinton and Newt Gingrich, the DINO president did give the scheme some momentum in the late 90’s. Republican successor, Bush eagerly embraced it and expanded upon it.
Social Security has been with us for over three-quarters of a century (passed in 1935; it became fully operational in 1939) and has worked beautifully for all that time and will continue to serve us in our old age and disabilities with the simple steps of raising the maximum earnings amount where employees and employers have to contribute a payroll tax into the Federal Insurance Contributions Tax Act (FICA). The current maximum is $110,100 a bump from the most recent $106,800. It should continue to climb as average salaries increase. It should also be doubled tomorrow. Social Security can tap into outside government funding sources as well. These sources plus a realistic tax increase (as in pre-Bush tax rates on the wealthy) and more ‘chop, chop’ in the absurdly bloated military budget would protect the trust fund as long as need be. It wouldn’t hurt if the government kept its paws off the trust fund as well.
In the 2005 State of the Union speech, newly re-elected President George W. Bush revealed Republican plans for social security ‘reform’ in some detail. Bush established the template for millionaires and billionaires to add exponentially to their lucre. These are some of his exact words; “…a half century ago, about 16 workers paid into the system for each person drawing benefits. It wouldn’t be a Republican speech without at least 1 blatant lie. The actual figure from 1960 was 5.1 workers. But that’s not nearly as frightening as tripling the real number.
Bush continued, “…we must join together to strengthen and save Social Security. For younger workers, the Social Security system has serious problems that will grow worse with time. He pointed out that today people are living longer and therefore benefits “are scheduled to rise dramatically over the next few decades.”
He threw out all sorts of unsupported numbers. Social Security will pay out more than it takes in by 2018; in 2027 the government will need to scare up $200 billion to keep the system afloat; by 2042, the whole kit and kaboodle will be “exhausted and bankrupt.” I’m exhausted just listening to his BS.
But, BS aside – Bush claims there’s a fix out there – voluntary personal retirement accounts. “Here is why the personal accounts are a better deal: Your money will grow, over time, at a greater rate than anything the current system can deliver.” Thus Spake Bush. Still a little hesitant? “We’ll MAKE SURE the money can only go into a conservative mix of bonds and stock funds.” Phew, what a relief. Funds are sure to appreciate no doubt. Just like the Dot-Com funds of the roaring 90’s. They appreciated like crazy. Venture capitalist were buying up companies designing new mouse pads with their international headquarters in their bedroom closets. What an era. The NASDAQ hit 5,048.62 March 10, 2000. Hello new millennium.
Then the Dot-com Bird of Paradise flew into the closed window of stock market reality. A bear market of gargantuan proportions rose up overnight. In just over two years some five trillion in market value was lost.
NASDAQ plunged to an intra-day low of 1,108 in October of 2002. Amazon went from $107 to $7.00 a share. Cisco lost 86% of its market value. It took seven years for the composite to recover just half it’s peak value. Even today, it’s not that much over half. Sure it’ll eventually recover, but how close will you be to retirement age?
Still want to play the privatization game? OK, hand your money over to Bernie Madoff. He relieved investors of about $65 billion all by himself. Bottom line, you can invest on your own any damn time you feel like it and not risk one penny of your Social Security. And, there are always 401k’s and lots of companies will sell employees their own stock if you’re a big believer in their future.
The current 112th congress has H.R. 1104 Privatization Act of 2011 floating around somewhere right this minute. The bill estimates the net gain from privatization will be $10-$20 trillion dollars. Sounds about right for the legislator’s investment cronies fees. The same cronies who load up legislative campaign coffers. A $10 trillion estimate differential shows they’re just pulling this one out of their a**. It’s also stated that the number of workers to pay for baby boomers is not increasing. Really? Rounding off, in 1980 there were 227 million souls in the U.S. In 1990, that number was 250 million; It was 281 million in 2000 and the Census Bureau puts the number at almost 312 million in 2011. No new workers? Surely Romney and company can’t send that many jobs overseas.
The real calculation is that Republicans expect wages to be comparatively lower if they get their way. So it’s not the paucity of workers, it’s the paucity of wage increases.
The goal is to eventually eliminate the FICA tax and allow workers to designate a certain amount of their pay to be invested privately. They will be no longer be ‘forced’ (as stated in the bill) to pay into the Social Security fund.
Don’t know where H.R. 1104 has gone. Maybe still snoozing in Ways & Means or it could be dead and buried. There was also a later privatization bill introduced by a Michigan Representative, Thad McCotter. It was H.R. 2889 and it seems lost in the shuffle as was McCotter who had an eye on the Republican presidential nomination at one time.
As for Mitt Romney; he’s enthusiastically supported privatization; he’s cautiously opposed it. This much we do know. He wants to reduce Social Security benefits and increase the age of eligibility. Guys worth a quarter of a billion can afford to make those sacrifices.