Watch– I can reform food into poop!
There are a lot of really, really ignorant people in this country. It’s no regular ignorance, either– it’s a very rabid anti-intellectual ignorance that flings itself full-force into combat against any clarifying information. It hates informed experience and abhors expert advice and insight. It is lulled by false promises of shiny objects and pacified by biased exaggerations of potential doom and benefit. And the proponents of Social Security privatization are wielding this ignorance like a victory sword.
I’m still somehow surprised at how oblivious people are to the irony of their own hypocrisy. They buy new ideas for “fixing” the supposed “problems” from the same people they claim created the problems in the first place. For this, these people are stupid. There’s no other word for it.
Now we have a bunch of morons running around spouting refined shitheadedness, with phrases like “Social Security is just a chest full of IOU’s” and “the system is broken because we’re paying in more than we’re getting back!” Boy, I sure am glad we have all these geniuses around to do all of our rocket science for us.
There’s so much stupidity to address with this “Social Security Crisis” that I’m not sure there’s even a good place to begin. I guess I’ll start with the aforementioned “IOU” thing. Question: do you have any cash on you? A credit card, maybe? Checks? Yeah, I thought you might. Not gold, though, right? Silver? Parcels of land? Right. That’s because our entire economy functions on and revolves around IOU’s. Cash? It’s a note– look at it, it says it right on it. The only thing that gives that note any value at all is the mass willingness to honor it as though it’s representative of something of actual value. It’s a fucking SLIP of PAPER, okay? I don’t see any pixie dust that magically makes it anything else. It’s kind of a collective IOU that’s issued by the government. Checks? They, too, are paper, in case you haven’t noticed. “I owe you fifty dollars. Redeem at any bank that will honor this as representative of the indicated amount of value from my account.” Credit cards? Just IOU’s with interest. It’s all IOU’s, dammit.
“But wait,” you say, “the system is still fucked up if we’re paying in more than we’re getting out of it!” No it’s not, actually. See, there was a “baby boom” just shy of sixty years ago, and at some point, all of these people are going to be latching on to the silken teat of Social Security. It’s the “pig in the snake”, as some call it (i.e. Think of a snake that’s just eaten a whole pig, and watch as it moves along through the digestive system), the danger of which has been severely exaggerated. Of course, not all of our elected representatives are total ass-heads, so in the early 1980’s, they passed legislation (developed in part by Alan Greenspan) to increase payroll taxes in order to accumulate a Social Security trust fund. In the time since, people have been paying slightly more in payroll taxes, and the money has been put into government bonds (one of the *ahem* most stable kinds of investments, but we’ll get to this in a second). When the baby boomers start their tsunami of retirement, the system will be paying out more than it’s taking in. This is hilarious, by the way, because the proponents of Social Security privatization have been using both “it’s taking in more than it’s giving out” and “it’ll be giving out more than it’ll be taking in” as arguments for “reform”. These arguments, um, cancel each other out. More goes in earlier in order to build a surplus before the baby boomers start retiring, and then the surplus gets spent later, after the retiring commences. It’s really not that fucking complicated, here, people. Let’s start using our brains instead of just finding an open notch in the gears of Fox News and connecting our mental machinery to it.
There’s a lot of confusion about how the Social Security system works, especially in terms of the aforementioned surplus. Allow me to clarify: The money you are paying right now will go directly to people on retirement, save for the extra bit going into the surplus that will be used to counter the baby boomer retirement. It is not going into a savings account for you, to sit and accumulate the entirety of your payments until you retire. When you’re retired, the people who are employed at that time will be paying for your Social Security. You won’t be getting the money that you paid in, you’ll be getting the money that’s being paid in by the younger people who are working and paying into FICA.
This creates a problem for any plans of privatization. If the money that you’re paying into the system is taken away, then people who are retired, or have been paying into the system and are on the verge of retirement, or whatever, won’t be getting any Social Security benefits. It’ll just stop. It’s not like they have all these accounts that they’ve been paying into, and the government will go “here, have your money back in one chunk and invest it in the stock market”. If you don’t pay in, they don’t get shit. Got it? If the Bush administration’s privatization plans are adopted, Social Security won’t start running out of money in 2051 as predicted (in which case, of course, it will still be able to pay 80% of benefits), it will run out in 2006. If you’re getting 2/3 of what you’re supposed to be paying into Social Security back, what, exactly, do you THINK is going to happen?
And if you think that you’re going to be able to just take your money and invest it wherever you want, you’re wrong. The government CHOOSES where you’ll be able to invest. You’ll still have choice, on some level, but it won’t be “HERE GUYS, HAVE SOME MONEY AND DO WHATEVER YOU WANT WITH IT!”
Back to investing. I mentioned above that the Social Security money is currently invested in the government. It’s one of the most stable investments available. If the U.S. government becomes unable to pay back bonds, your retirement is going to be the least of your fucking worries, let me assure you. And do you really think that if the U.S. government is doing that shittily, the stocks they’re going to be letting you choose will be making massive gains?
Ever stop to consider investment fees? The government won’t be paying them, or if they do, it’ll be with a portion of whatever you’re supposed to be “getting back”. In all the other places they’ve tried privatization, brokers have been raping people with investment fees. Think it’ll be any different here? That our government with this administration won’t manipulate things to benefit its big business friends? One word for you: Halliburton.
Yes, Social Security is in peril, but not because of inherent instability. The danger it faces is “reform”, which, for anyone who hasn’t been paying attention to the last century, is the attempt at manifestation of over half a century of resentment and anger by the republican party toward anything remotely close to socialist ideas. They abhor the New Deal because they hate the idea of “losing money” for programs from which they perceive they don’t directly benefit. Why pay for public transportation if you have your own Hummer Limo Monstrosity and driver?
I’m sure this is an issue that won’t be dying anytime soon, so I’m going to save some of this for later. In the meantime, I encourage you to start reading articles by Paul Krugman. You can find some over at The New York Times (it’s free to register for an account), but you have to pay to get older material from the archives. Google for caches/mirrors/syndicated runs of his column, if you can find them. You can also buy a copy of his book, “The Great Unraveling”. Trust me, you don’t win the John Bates Clark Medal for “economist under forty years of age” for nothing. This guy knows what he’s talking about.