Online Journal
Front Page 
 Special Reports
 News Media
 Elections & Voting
 Social Security
 Editors' Blog
 Reclaiming America
 The Splendid Failure of Occupation
 The Lighter Side
 The Mailbag
 Online Journal Stores
 Official Merchandise
 Join Mailing List

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

Destroying Social Security to save it
By Seth Sandronsky
Online Journal Contributing Writer

Dec 10, 2004, 20:24

Email this article
 Printer friendly page

Officially, the people of Fallujah, Iraq, are being �saved� with bombs and bullets by the Bush White House. The flattened city, roughly the size of Sacramento, is proof of that. Meanwhile, the administration is pressing forward to �save� the Social Security system for Main Street America. Presumably, introducing personal savings accounts will preserve this program of social insurance.

To that end, a coalition of the two political parties will be needed, readers learned in a Dec. 4 column by David Brooks in The New York Times (NYT). For him, this two-party coalition, including GOP Senator Lindsey Graham of South Carolina, must learn to get past political differences to reform Social Security for Main Street, and not to swell the pocketbooks of the nation�s upper class. Its drive to slowly privatize Social Security is less newsworthy than pro athletes such as Barry Bonds, Jason Giambi and Marion Jones using steroids to �be all that they can be� in the corporate world of modern sports. Crucially, those who question Brooks� desideratum on Social Security are �special interests� who fail to grasp the reality of the system�s financial fragility.

Still, Brooks lacks the �scientific� credibility of a mainstream economist concerning the future solvency of Social Security. For that, we can turn to N. Gregory Mankiw, chief of the Council of Economic Advisers for President Bush. Taxes should not be raised to cover the system�s funding shortfall in 2042, Mankiw said in the Dec. 3 edition of the NYT. It is of no consequence that taxes have been increased several times to bridge such gaps for Social Security in the past.

Such history is down the memory hole. And pundits like Brooks are well trained not to mention that. Likewise, he is mum on the CFA�s forecast in July 2003 that the Bush tax cuts for the wealthy would create 5.5 million new jobs by the end of this December. The reality is short of this figure by about 3 million new jobs for the 17-month period.

Meanwhile, what passes for information from a top economist for the president is supposed to empower the mass of the American people to make rational decisions on Social Security. Then, as isolated individuals investing in personal savings accounts, they will reap all that the stock market has to offer them. Such investments will replace, in part, the current system of social insurance that is lumbering, clumsily, towards a sea of red ink. Nobody in their right mind wants that.

It is far better to act now and avoid that future pain. After all, private is good, and public is bad. This theme is a favorite one of the GOP and the Cato Institute, taking the �hard line� versus the �soft line� of the Democratic Party and the Brookings Institute. For Brooks, Mankiw and the Republican Party, now is the time to get a move on with the program to save Social Security for the baby boom generation.

So to financial markets Main Street must go. Invest, invest, that is Moses to the prophets! But invest in what is the question. Currently, there are trillions of dollars invested in financial markets that are unconnected to the useful production of what regular people use to live.

In brief, this is what attracts surplus capital to financial markets. And the more capital they attract, the more of it there is to contribute to Democrats and Republicans to help Wall Street fleece the population. This process is the driving force to slowly privatize Social Security. Hitching it to financial markets for the purpose of preservation is a little like promoting sex as a way to become a virgin.

Speaking of preservation, recall the stock market inflation of the 1990s? It partly funded retirement benefits for government and private-sector employees in the U.S. Many of their employers bore these pension costs. These are called defined benefit plans.

Then the stock market soured. Employers began to flee their investments in workers� retirements. They began to bear market risk for pensions. As a result, employees had to invest in what are called defined contribution plans.

Tens of millions of workers, not their employers, now bear the risk and reward for retirement based on how financial markets rise and fall. Nobody can predict what they will do. There are simply too many actors involved in millions of transactions for predictions to be much more than speculations. To somewhat paraphrase the late American author Flannery O�Connor, all that rises in financial markets must eventually converge on future uncertainty.

That much is certain. Certainly, Social Security provides stability for America�s working majority. Hitching it to the �irrational exuberance� of financial markets is a recipe for instability. In contrast, social prosperity requires stability.

Here lies the main contradiction between the needs of Wall Street and Main Street. Here is a current example of the conflict between capital and labor, underway for centuries. U.S. wars on Iraqis by sanctions and munitions are both diversions from and complementary actions to the upper-class agenda of destroying the material stability of the American majority. Awaken.

Seth Sandronsky, a member of Sacramento Area Peace Action and a co-editor with Because People Matter, Sacramento�s progressive paper. He can be reached at:

Copyright © 1998-2007 Online Journal
Email Online Journal Editor

Top of Page

Social Security
Latest Headlines
Bi-partisan unity on �reforming� Social Security?
Whacking at Social Security again
The Democratic majority and Social Security: Watch what the party says and does
The Washington Post's war on Social Security
Bush bounces back for more on Social Security
When journalists manufacture a crisis: What decline for Social Security and Medicare?
Happy 70th anniversary, Social Security
Victory over Bush�s Social Security plan
Younger workers and Social Security: Privatization of the program undermines their future
Viguerie's army attacks Social Security
Untrue colors: Social Security in black and white
Social Security and the lesson of the dot-com bust
Over 55 in the U.S.? Get back to work!
�Weading� out the truth on USA Next�s anti-AARP ad
An alternative to the destruction of social security
Selling Social Security reform, Team Bush-style
A 9-year-old shills for Social Security privatization
Bankrupting Social Security to finance fascism
Bush to Social Security: drop dead
Defend Social Security; defeat bogus �reform�