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Social Security Last Updated: Jan 4th, 2007 - 01:08:31

Bush�s plan for Social Insecurity
By Jerry Mazza
Online Journal Contributing Writer

Dec 4, 2004, 20:18

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There�s an old expression. Don�t fix what isn�t broken. And Social Security is not broken, as suggested by Bush and his millionaire and billionaire pundits. Not by any means. In fact, it provides millions of workers with a retirement income that is guaranteed, because they helped pay for it. It also provides disability insurance to people during their working years. And it provides survivor�s insurance to the kids of workers who die at an early age. This gem of the New Deal is still a great deal.

As Dean Baker said in "The Social Security Crisis, Another White House Lie?,� the program�s trustees� report shows it can pay all benefits through the year 2042, with no changes. Even after that date, the program "would always be able to pay a higher benefit (in today�s dollars) than what retirees currently receive, although less than the full scheduled benefit."

Dean goes on to say, "The non-partisan Congressional Budget Office did an independent investigation of Social Security�s finances and came up with an even brighter picture. They found that it could pay all benefits through the year 2052 with no changes whatsoever. Furthermore, according to both sets of projections, the changes required to keep the program solvent through its entire 75-year planning period are smaller than the changes made in any of the decades from the 1950s to the 1980s." So what�s the problem here?

Well, one of the meaningful problem Social Security faces is finding the money to redeem the $1.67 trillion of government securities in the Social Security and Disability trust funds when they may be needed to pay benefits? That Social Security money was spent by politicians on other government programs, including the gluttonous tax cuts for the rich in the past four years. So my modest proposals are, cancel the tax-cuts, stop corporate welfare, and bring the war to an end. Oh, and stop laying all those millions on the Born Agains. Or at least spread the gravy over all the religions� plates.

The other problem Social Security faces is the ceiling on wages and salaries, including self-employment earnings, on which SS taxes are paid. They are currently capped at $87,900 and set to rise only to $90,000 in 2005. Any earnings above that amount are not taxed. Why? The fiscally responsible solution is to remove the ceiling and tax all income, probably at a lower rate, while keeping the cap on the maximum Social Security benefit. This would generate significantly more dollars for the program.

But the notion of generating income through a graduated tax is something Bush and his Republican forefathers hate. It�s why they hated Social Security from the get-go and now they see a grand opportunity to destroy it. Their resentment is echoed in the number of corporations going to court to argue they should be allowed to reduce the pensions of their retired union workers. They claim that the pension benefits were not for the lifetimes of those employees, but only for the lifetime of the union contracts? I would like to ask them all one question. When the majority of the people go broke, who is going to buy all the crap they want to sell us? I personally am hoping against hope that people have enough sense to make the corporations a gift of the worst holiday season ever. Wal-Mart so far is a great slow start.

Returning to Bush, trust that he will probably push a proposal from his Social Security commission that will result in big cuts in workers� Social Security benefits. Though the cuts would be phased in over time, bottom line, an average worker of 20 today, would see his total Social Security benefits cut by close to $160,000 by retirement. They would have in return the big bogus stock option. That is the option to try to recoup a small portion of these cuts by looking for higher returns in the stock market, with all its ups and downs, Wall Street as Las Vegas. Roll �em mama, papa needs new dentures. Pardon me, I don't mean to be flip.  It just makes me laugh �til I cry.

The thing is, Social Security like few things in our government works efficiently. Administrative costs run just about 0.6 cents of each buck paid out in benefits. The English system of private accounts gulps 15 cents on every buck of benefits. And believe it or not, in this age of Enron, Bush�s favorite charity, Social Security has a minimum of fraud and/or abuse as government audits have repeatedly shown. So why would anyone in his right mind, which probably doesn�t include Bush and his left brain Karl "Ownership Society" Rove, want to change it? And before that answer here�s an even bigger question: what would it cost to change it?

According to the November 28 New York Times, "Bush�s Social Security Plan is Said to Require Vast Borrowing." How vast? It "could vary widely, from hundreds of billions to trillions of dollars over a decade, depending on how much money people are permitted to contribute to the accounts, whether the changes to Social Security include benefit cuts and tax increases."

Are you surprised Bush would even suggest a plan like this? That after he ran up a $416 billion deficit while he cut taxes by $100 billion this year, coming off a 2000 surplus of $237 billion which came after a Clinton pay-down of $363 billion over the previous three years, the biggest ever. Does Bush seem to be going in the wrong direction numbers-wise? You betcha, Red Rider.

Financial experts say that the mind-boggling costs of setting up personal accounts won�t just make Social Security worse, they could drive our national debt over the edge.

Greenspan is already having a dignified panic attack over the lack of savings in America and the size of our debt and that foreign investors are seeing our bonds as wallpaper. And here�s a president who wants to kick us down the rabbit hole of debt like Alice to Wonderland, where anything is possible with the right accountant, i.e., cook the books and make debts look like assets. Hello, America as Enron, d�j� vu all over again.

You could say Bush is the Mad Hatter of debt, and he doesn�t have time to talk about the details, like how it will be paid. He�s in such a rush to do it to Social Security like he did it to Iraq. And we all know that�s turning out. Yet, he�s got time to say, no tax increases, uh-uh, no way. We might even cut income tax altogether, and just put a national sales tax on everything, including the air you breathe.

The fact is the payroll tax that workers pay for Social Security now goes to people who are already retired. And personal accounts would be paid for from the same money pool. So the money going into accounts wouldn�t be there to pay benefits to current retirees. Thus the shortfall would have to be borrowed. And therein lies the old rubbo: billions, trillions, to change a system that doesn�t need changing, except for the wrong people who would profit from those changes.

And who could those people be? Obviously, the financial service industries, that is, Wall Street & Company, and the holders of our new debt paper. In fact, they could end up owning America just so we can give the older folks, who broke their backs working most of their lives, their checks. So let�s invoke the KISS theory of economics: Keep It Simple, Stupid. You know who you are. And keep your hands off the frigging borrowing machine.

Already you have the Associated Press providing us with headlines like "Stocks Drop on Fears of Falling Dollar." "What we�re seeing here is investors realizing that the falling dollar could prompt inflation, and that could prompt a much stronger Federal Reserve response" said Peter Cardillo, chief strategist, SVP, and market analyst with S.W. Bach & Co.

Greenspan blamed "a spiraling trade deficit and continued federal budget deficits for international investors� reactions." Who could blame them? Who could blame him for speaking up as the dollar continues to weaken like a once champion fighter whose trainers have doped him for the fix? I mean, how could a president, a man who went bust in every business he ever started, be telling us how to shape up Social Security? He�s clueless, reckless, dare I say a debt junky, an addictive personality with a track record.

Meanwhile, since Dubya got the debt wheels turning, the Fed will meet on December 14 and it�s expected to crank the prime another quarter-point to 2.25 percent. But no problem for Dubya, he�s got his salted away. Ask Tom Hicks. Ask Papa Bush and the Carlyle Group. That�s their bit of Economic Warfare on the folks back home.

Remember, too, Bush�s redo of the Medicare prescription drug bill ended up costing $100 billion more than God�s messenger originally prophesized. So the Times� prediction that the private account Social Security shortfall "could vary . . . from hundreds of billions to trillions of dollars over a decade" is more than a possibility. It�s more like the reality.

Which is why Greenspan keeps harping on savings. Somebody�s gotta be holding some real, not necessarily laundered, cash here. Which may be why for the first time in 17 years, the dollar devaluation has people running out to buy gold again, and making it their standard, upwards of $450 an ounce. With Alaska mining companies, bitten by the rush, out hunting for more.

I remember my father, waving his right Republican hand and forefinger at me when I was a young man and saying, "Don�t spend money you don�t have. Buy what you can pay for. Conservative means someone who conserves. Learn to save, buddy. I won�t be around forever." Admittedly, he was a little harsh, but okay, I got it. And he wasn�t around forever; bless him wherever he is.

But perhaps this Bush financial profligacy is a mere reflection of a deeper U.S. trouble with over-spending and borrowing. In fact, the national credit card debt (CCD) weighed in at $753 billion, according to the Fed, as of January 2004, what with Santa�s bill and all. In January 1990, the CCD was $214 billion, and in January 1980, $54 billion. A quantum leap of nearly $700 billion in 24 years.

About one-twelfth of our present credit card debt is paid off before it incurs interest. So most Americans pay interest on an annual load of about $690 billion in revolving debt. About 55 percent of consumers carry debt. The rest are convenience users. The average household with debt carries approximately $10,000 to $12,000 in total revolving debt and has about nine cards. Gulp.

We want what we want when we want it. And if we simply don�t have the beans to get it, we gotta get them somewhere. More Social Insecurity. Maybe Bush just thinks he�s doing what everybody does? Maybe it�s those endless cute commercials for the American Dream, all those wise guys from Madison Avenue over-stimulating the imagination. Maybe we�ve forgotten the Great Depression. Maybe we blanked out what pop, mom, grandma, grandpa, Aunt Lou and Uncle Pete told us. Maybe Dubya is just running the country like a college kid with maxed-out cards. And nobody can tell him no. And if they do, he fires them. Well, he can�t fire us. He works for us, goddamnit, he works for US!

So let�s just tell him together. Hands off Social Security, Mr. President! Take all the campaign capital you earned and spend it some place else. Or better, save it for a rainy day, another of my old man�s axioms. Because at the rate you�re going, getting ready for your third war, your fourth, your fifth, it�s going to be pouring pretty soon. And I, we, would really like, in the middle of this firestorm, some Social Security. Pure and simple, like FDR dreamed it.

Jerry Mazza is a freelance writer who lives in New York. Reach him at

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