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.

Wednesday, January 05, 2005

Two strikes, and here's the windup

Disaster Relief Watch

Here are links to organizations which are helping out with the tsunami relief efforts. Keep those unfortunate people in your thoughts.

Social Security Watch

I’m going to harp on about Social Security for a while yet. I hope you are not tired of the subject, as I probably won’t stop worrying it until SS is either destroyed (sorry, “privatized”) or the GOP fails in its attempts to do so. Why? Why should I or anyone else care about whether Social Security survives?

Many people who work put more money into SS than they will eventually receive from it in benefits (though this is not always true, even for top earners). So for many people, Social Security is a net loss of money over their lifetime. And what do they get out of it?

They get a country where the elderly and infirm aren’t literally starving in the streets. They get a country where widows and people blinded and hobbled by disability have some means of at least staying above the poverty line. They get a country that at least in some ways, is willing to try to take at least the minimum of care of its people.

That’s an excellent bargain to me. I don’t want to live in the GOP dream/fantasy world, where everyone’s worth is measured by the amount of money they produce, or the amount to which they are self-sufficient. A wise man once told me that life isn’t fair, and he was damn sure correct. A society that takes that into account, and at least tries to ease the burdens of the most unfortunate, the most vulnerable, the weakest, is one that is worth living in.

Now, the basic underlying tenant of Social Security is that some people cannot save enough for their own retirement to prevent them from starving in the street. Some of that is bad planning, some of it is bad luck, some of it is brought about by forces in the world, some is brought on by the people themselves. But it is undoubtedly true. If a society helps to prevent that happening, you have a form of social security. If everyone is just saving for their own retirement, then you have no social security.

What Bush is proposing is that people be forced to save for their own retirements, through means that the government will designate (and that will incidentally expose wage taxes to deliciously high fees for the investment community . . . and also serve to pour ridiculous amounts of money into that near-Ponzi scheme known as the stock market – sweet!). Therefore, since everyone is saving for their own retirement with no guaranteed benefits, ipso facto, there is no more social security.

Therefore, Bush’s “privatization” really is the end of social security. It isn’t “reform”. It is destruction.

In Bush’s own words, he has said “And the question is whether or not our society has got the will necessary to adjust from a defined benefit plan to a defined contribution plan.” This statement reveals most obviously what they are aiming for (though they STILL have not outlined a real plan with details). A defined benefit plan is one where benefits, some level of return, are guaranteed. A defined contribution plan is one in which all they promise is how much they are going to take from you, and never make any promises about what you will get back. (Many of you currently being hosed by such changes in your pensions understand this bit of legerdemain).

To sell this horrible idea, the GOP dangles this carrot in front of working people: that they could possibly make more in private investment accounts over the long term.

Never mind that many of the assumptions in this carrot simply aren’t true Let’s accept Bushco’s claim at face value that on the whole, many people would be making out with more money from private investment accounts over the course of their lives. Who is being forgotten in this equation?

Lots of people. Widows and children who depend on one person for their income, when that person suddenly dies before very much money is in their “private account”. Blind people and people who are disabled, who can’t put very much money in their “private account”. Millions and millions of people who cannot make enough money to provide for their entire retirement, even with careful planning and good return on investments. Wages have been stagnating for 30 years, as our own uberclass takes it stratospheric income and leaves workers with crumbs. And now they are suggesting that we trade one of the only things designed to keep working people safer in exchange for exposing their crumbs to the slings and arrows of outrageous fortune (and perfidious investment houses) that make up Wall Street. Madness.

The assumption that stocks bring better returns is not always true, either. For example, see this article: One man's retirement math: Social Security wins

For 45 years, the defense-industry analyst paid into the system until his retirement in 1994. But with all the recent hoopla over reform, Mr. Logue, a Massachusetts Institute of Technology graduate, decided to go back and check his own records. Would he have done better investing his money than the bureaucrats at the Social Security Administration?

He recorded all the payroll taxes he paid into the system (including the matching amount from his employer), tracked down the return the Social Security Trust Fund earned for each of the 45 years, and then compared the result with what he would have gotten had he been able to invest the same amount of payroll tax money over the same period in the Dow Jones Industrial Average (including dividends).

To his surprise, the Social Security investment won out: $261,372 versus $255,499, a difference of $5,873.

Next time, we will take a look at that “scary” pile of IOUs the GOP likes to wave in your face when they talk about Social Security.

A war of aggression based on lies was Big Mistake number 1. Reelecting this cabal of thieves was Big Mistake number 2. We are lining up for strike three in this game of “How Stupid Are We?” and I don’t like our odds. The leadership of the GOP is evil and organized. The Democrats are scattered, and have been proving they aren’t worthy of our desperate hopes for years now.


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