The Watch

The Watch is concerned about the increasing pressure towards feudalism in the United States from corporations, social regressives, warmongers, and the media. We also are concerned with future history concerning our current times, as non-truths which are “widely reported” become the basis for completely false narratives.

Tuesday, December 21, 2004

We had to burn Social Security to save it

Social Security Scam Watch

The ideological extremists in the GOP (ie the people currently leading the country) have long maintained an animosity towards Social Security, and have longed to kill this very successful social program. For some reason, the idea that the elderly and infirm should be provided with some small, minimum income is abhorrent to these people. The notion that Bushco wants to “save” Social Security is as ridiculous as them wanting to “save” the Democratic party.

Paul Krugman, one of the only prominent voices who consistently offer the truth about Bush’s economic policies, lays out the problems of privatized retirement plans, both in Chile and the UK, in a recent editorial. He points out that these plans fail to keep seniors out of dire poverty (requiring government bailouts) and expose huge amounts of money to “fees” for handling the accounts. In Chile, these administrative fees run about 20%. Currently, Social Security only uses about 1% of income for administration. He ends with this assessment:

Privatizers who laud the Chilean system never mention that it has yet to deliver on its promise to reduce government spending. More than 20 years after the system was created, the government is still pouring in money. Why? Because, as a Federal Reserve study puts it, the Chilean government must "provide subsidies for workers failing to accumulate enough capital to provide a minimum pension." In other words, privatization would have condemned many retirees to dire poverty, and the government stepped back in to save them.

The same thing is happening in Britain. Its Pensions Commission warns that those who think Mrs. Thatcher's privatization solved the pension problem are living in a "fool's paradise." A lot of additional government spending will be required to avoid the return of widespread poverty among the elderly - a problem that Britain, like the U.S., thought it had solved.

Britain's experience is directly relevant to the Bush administration's plans. If current hints are an indication, the final plan will probably claim to save money in the future by reducing guaranteed Social Security benefits. These savings will be an illusion: 20 years from now, an American version of Britain's commission will warn that big additional government spending is needed to avert a looming surge in poverty among retirees.

Krugman has also pointed out that “Once you realize that privatization really means government borrowing to speculate on stocks, it doesn't sound too responsible, does it?"

The motive to kill Social Security is pretty plain. But what are the effects of privatization likely to be? Suddenly, all workers will be part owners of the Ponzi scheme that is the stock market (sure, you can make some money in investments. But for the big players, the game is to wait until lots of people put their money in, then take that money out, lather, rinse, and repeat). The brokerage houses will be taking 20% of the vast amount of money going into and out of Social Security for “administrative costs”. These private accounts will come with much reduced income guarantees. They will tie Americans into a psychological state of wanting what is good for the stock market (which in so many cases is antithetical to what is good for workers).

What Bushco is offering the public has the very same symptoms as what they are threatening about the current system. They say the current system may have to provide reduced benefits. But their proposed system shows only reduced benefits. They use projections of robust growth to paint their individual savings accounts in a good light, and projections of poor growth to paint the current system in crisis. But robust growth shows the current system is in great shape, and poor growth shows their retirement accounts to be horrible ideas. What they really want is for everyone to save for their own retirement, period. That is what they are realy offering. No one helps anybody else. And that is the end of Social Security. "Privatizing" Social Security is really ending it, but they are afriad to say that.

Josh Marshall describes these schemes this way, couching it as “401k reform” for the sake of argument:

Under my hypothetical 401k reform we change all the stuff about different companies deciding how much or how little they want to contribute. And we also change the part about your having a choice about how much or whether you contribute; now, it's all mandatory.

There's also a change in the part about your choosing which sort of investments you want to place your funds into. Under the reformed 401k everybody's money goes into government bonds in one lump sum pool. When you retire you can get your money, or rather, your slice of the pie back, with a few adjustments depending on how much you really need the money after all. Other folks may need it more.

And one final thing: the income now gets taxed when you earn it, not at retirement.

Now, if this 401k reform plan were on the table, wouldn't pretty much everyone say: 'Give me a break. You're getting rid of 401ks and replacing it with some sort of weird government pension plan where all the money goes into low yield investments and it's not even clear whether I get my return on what I put in.' Most people would say -- and most journalists would undoubtedly follow their lead -- that calling this '401k reform' was some cheap rhetorical hoodwink. As indeed it would be.

And that's just what the advocates of 'Social Security reform' with private accounts are up to. They want to phase out the program; but they're just too cowardly to say it. They lack the confidence of their ideological ambitions.

A similar post points out this expert opinion:

"They are using smoke and mirrors in the sense that they are cutting taxes in the here and now and making cuts way off in the future," said Laurence J. Kotlikoff, a professor of economics at Boston University who has written extensively on the long-term financial problems of Social Security and Medicare. "What I see them doing is very gradually wiping out the old system, and putting something very minor in its place."

Finally, here is Treasury Secretary John Snow, who unfortunately won’t be with us in the glorious second Bush term, “explaining” the “plan” on Faux news. Note the brilliance:

WALLACE: So anyone who is investing in these private accounts would be trading the chance -- maybe, as you say, a very good chance, but still the chance -- for higher returns from these private accounts for a certain cut in their government benefit?
SNOW: Well, remember, it's all voluntary. It's all voluntary. And nobody --
WALLACE: But that would be --
SNOW: That's right.
You reduce your claim in the future against Social Security so the government's long-term obligation goes down...
WALLACE: ...What would happen in this country if some seniors should end up losing money because of their investment in the private accounts and end up not having enough to make ends meet?
SNOW: Well, Chris, look, this is to supplement Social Security, right? It's an add-on. It's an addition.
WALLACE: Well, it isn't an add-on because you said it's a tradeoff. . . .
SNOW: What [Bush] said was, no increase in payroll taxes.
Now, that's awfully important, to rule out increases in payroll taxes. Because the experience of Europe indicates very strongly that when we have very high payroll taxes, it hurts employment. It hurts growth in the economy. It hurts jobs. We don't want to go that way. We don't want to go the way of Europe...
WALLACE: But is that just the tax rate, or does that also mean no increase in the income cap?
SNOW: Well, you know, we don't have a detailed plan yet.
What the president said was, no increase in rates.
WALLACE: It was rates? So you're saying that the income cap could conceivably be raised?
SNOW: Well, I'm not saying it would be. We don't have a plan yet.
WALLACE: But you're not saying it wouldn't be?
SNOW: Well, I'm saying what the president said. The president said, there will be no increase in payroll taxes as such.
WALLACE: Which you understand as tax rates?
SNOW: Well, as I say, that's what the president said. All I can do is repeat the president on that one.
WALLACE: So there is some ambiguity on that?
SNOW: Well, the president said, no increase in rates. That's what he said, and that's where we are. We don't have a detailed plan yet. We will at some point.

In the end, Snow just throws his hands up and admits that there isn’t even a plan yet. Just like in Iraq!!!

Terra Watch

Why can’t liberals just line up behind Bush’s War like good little soldiers? Don’t they know that we’re at war? With Terra?

David Neiwert at Orcinus tackles this question with his usual erudition, explaining why people are still opposed to the war in Iraq, and why it makes us LESS safe.

In the meantime, it should not surprise anyone that liberals are unenthusiastic about the Bush administration's substitute: warmed-over Cold War strategies combined with a megalomaniacal vision of American global hegemony. Moreover, its "war on terror," as I've argued frequently, is manifestly a political public-relations campaign that does not take any serious steps at actually confronting terrorism. We know this isn't a real war on terror because we still haven't caught either Osama bin Laden or the anthrax killer -- and don't show any signs of doing so soon. We know this administration isn't serious about terrorism precisely because we are now spending the bulk of our national energy fighting a war in Iraq that made the likelihood of future terrorist attacks exponentially greater. ... As the Bush administration had made it clear it intended to invade Iraq, it seemed simultaneously clear that it simply had failed to make any kind of valid case for doing so. And many of us said so.

There were five major substantive objections to the invasion of Iraq:

-- Its rationale was predicated on questionable assertions about the presence of weapons of mass destruction.

-- It seemed similarly predicated on an assumption that Iraq was involved in the 9/11 attacks.

-- There seemed to be little or no planning for the post-invasion environment, particularly an extended occupation.

-- It would destabilize Iraq, creating an environment ripe for inviting fresh terrorist activity.

-- And most of all, as I pointed out at the time, it would seriously dilute our ability to actually fight the war on terror.

Looking back, all five of these objections were not only well grounded, they proved prophetic. All five are now the essence of what has gone wrong with the invasion.

Local Watch Watch

I wrote three letters to the editor of our local paper recently, but it doesn’t seem as if they are going to be published. I thought I would share them with you here in that case. The first was on the hackery of the Clinton scandals, in response to an editorial by a right winger complaining that right wing hate radio doesn’t have anything to rant about these days, unlike the glorious Clinton era.

The second was in response to this letter:

Sore losers teach the wrong values

Liberal sore losers, please remove your Kerry and anti-Bush bumper stickers. They are negative, distracting, offensive in some cases, and anti-American when they say Bush "is not your president."

Bush won fair and square, and he is the president and commander in chief. You are teaching bad values to your children. If you have a problem, then get involved instead of just hating America.

and went like this:

In a December 20, 2004 letter to the editor, writer John Ferrara is concerned that pro-Kerry and anti-Bush bumper stickers are teaching bad values to our children. Although I have no such stickers on my vehicle, I would suggest to Mr. Ferrara that we are in worse danger of teaching bad values to our children when they learn that Mr. Bush specifically asked his White House counsel Alberto Gonzales to legally justify torture. Gonzales and his team wrote such a memo in August of 2002, and he has been rewarded by Mr. Bush with a nomination to be our next Attorney General.

Thanks to Bush and Gonzales, our country now tortures people who have not only not been found guilty through due process, but in most cases do not even have access to due process at all. Cruel and unusual punishment of the guilty is explicitly barred by the 8th amendment, but apparently it is just fine in the eyes of Bush and Gonzales for anyone we capture, regardless of their guilt or innocence.

Our nation is now an international torture criminal. Future generations of Americans may well wonder why the “bad values” of our current citizenry extend to pretending this is not the case, and allowing the torture of prisoners, sanctioned by Mr. Bush, to continue.

Finally, since Mr. Bush is not equivalent to “America”, opposing him is not “hating America”. I call it “thinking”.

The third letter was in response to this piece of brilliance:

If you're offended, then move abroad

I am tired of liberals and their political and governmental leaders worrying about whether we might occasionally offend someone who has come here from another culture.

Since 9/11 there has been an upsurge in patriotism by the majority of Americans. The dust from the attacks had barely settled when the politically correct crowd began complaining that our patriotism might offend others.

I am not against immigration since like all of us accept native Americans are immigrants or their descendants. I have enormous respect for anyone who has the courage to move to new country with a new language and culture. However, there are a few things that those who have recently come to our country, and some who were born here must understand. Americans have our own language, culture, history and lifestyle.

Our society has been developed over the centuries through struggles and victories by men and women who have sought freedom. We speak English, not Russian, Spanish, Arabic, Chinese or any other language. Therefore, if you wish to become a part of culture. you need to learn our language.

"In God we trust" is our national motto. This is not a Christian right-wing slogan. This country was founded on Judeo-Christian principles. It is appropriate to display it on school walls. If God, Uncle Sam, the stars and stripes or the Pledge of Allegiance offends you, move to another part of the world because they are part of our culture.

to which I wrote:

In a December 20, 2004 letter to the editor, writer Robert Corson suggests that if the Christian “God . . . offends you, move to another part of the world”.

One of the greatest things about this country, perhaps THE greatest thing, is that every citizen has the right to tell a proselytizer for any religion to go take a hike. We are under no legal obligation to worship any particular god, follow any particular doctrine, or believe any particular creed.

One can only imagine the howling that would come from the very people who would promote the tyranny of the majority in religion if a mass conversion suddenly occurred in this nation, and another religion (let’s say Islam for the sake of argument) became the majority religion. The first amendment would look pretty good to those people then, wouldn’t it? No doubt they would launch legal and libertarian maneuvers to keep the Koran out of schools, prohibit Ramadan from becoming a federal holiday, etc. Or to ask a less fanciful question, which part of our “Judeo-Christian” heritage will get to determine what hangs on our school walls? Roman Catholics? Southern Baptists? Unitarians? Protestants and Catholics have two different versions of the Ten Commandments, for example: whose gets displayed, and by what right?

As to crowing about “In God we trust” being a national motto (officially enshrined only 48 years ago, at the height of the Red Scare), I would point out that pre-World War II Germany’s motto was “God is with us”. They also enjoyed “upsurges in patriotism” from time to time.

I am a church-going Christian myself, and somehow I’m sure that the institution of Christianity in the U.S. will survive the onslaught of the mighty forces of the atheists and agnostics and civil libertarians. In this country, it is their right, and everyone’s right, to question religion creeping into our civil structure. And if Mr. Corson doesn’t like that, then he too is welcome to look to other parts of the world as his home. There are several wonderful theocracies. Let’s try not to become one of them.

Dear Melissa assures me these won’t be published, and she is probably correct. But I don’t see how they are any worse than the two which they did publish, so we’ll see.


Post a Comment

Links to this post:

Create a Link

<< Home