Social Security
Social Security and the lesson of the dot-com bust
By K�llia Ramares
Online Journal Associate Editor


Mar 15, 2005, 22:09

March 10, 2000, marked the end of the dot-com boom. The NASDAQ index closed that day at 5048.62. On Friday, March 11, 2005, the NASDAQ index closed at 2041.60. That�s only 40 percent of what it was five years earlier. In other words, stocks can go down; and stock indexes can stay down. Remember that when you hear about how much better off you will be by putting part of your Social Security taxes into private investment accounts for retirement.

Any ethical financial advisor will warn you not to invest what you cannot afford to lose.

Your bank�s announcements of its investment opportunities carry a warning that they are not Federally-insured. Any Internet, broadcast, or print advertisement for a mutual fund or other investment has a disclaimer pointing out that investment carries risk of loss, including loss of principal, or that past performance is not a guarantee of future results, or that investment carries risk that is not suitable for everyone.

Still, George W. Bush thinks you should gamble your retirement on Wall Street. If you have disposable income to invest and want to take the risk, that�s fine. But if you are, like me, one of the many who live paycheck to paycheck, private accounts are not Social Security, they�re Social Insecurity. And if I am forced into a private account, I would put the money in the most conservative investments, which is what Social Security is mandated by law to do anyway. I am sure that others in my position would do likewise.

The idea of an already deficit-ridden federal government borrowing trillions to privatize Social Security makes no sense, even from the standpoint of helping Bush�s Wall Street friends draw more money into their casino. There are already private retirement accounts called IRAs. If the government wanted to encourage more private investment for retirement, Congress could simply raise the amount people could put into IRAs tax-free each year.

Bush is telling us that there�s not enough money in the system to keep our promises to retirees somewhere in the middle of the century, so we should bolster the system by taking money out of it? Huh? This only makes sense to people who think that 6 minus 4 equals 9. Notice that he does not use the same logic to bolster our military might by reducing the amount of taxpayer money going to the Pentagon.

So why is George W. Bush touting private accounts as a way to bolster Social Security? The real goals are to destroy Social Security and the expectation that government has any role in providing a social safety net, and to make flesh and blood people the slaves of the artificial persons known as corporations.

In a January 21, article in the Austin American-Statesman, Gary Chapman, director of the 21st Century Project at the LBJ School of Public Affairs at the University of Texas at Austin, observed that �Grover Norquist, the anti-tax crusader on the right, advocates an end to Social Security so that younger voters will become reliable Republican supporters of a radical corporate agenda. Norquist argues that if people are dependent on the stock market for their retirement, they will �naturally� oppose any constraints on corporate profits, and thus become supporters of deregulation, union-busting, environmental rollbacks, tort reform, etc.�in short, they'll become pro-business Republicans for life, because otherwise they may jeopardize the value of their retirement accounts. This is meant to ensure GOP dominance for another half-century or more.�

What Norquist and other neocons fail to talk about is how, even in a low-regulation environment, businesses fail and stocks tank. It took 25 years for the Dow to get back to where it was just before the crash that signaled the beginning of the Great Depression in 1929. And that resurgence happened because the United States emerged as the world�s manufacturing power after much of Western Europe�s manufacturing capability was destroyed in World War II.

Now the neocons promise us generational global war (assuming we don�t nuke and poison our planet to the point that there can be no future generations). But we no longer have the manufacturing base that allowed the American economy to become the strongest in the world after 1945. We�ve outsourced many of our manufacturing operations in the name of lean, mean global competitiveness. And now we are outsourcing our knowledge-based jobs, as anyone who has ever dealt with a computer help desk call center abroad knows well. .

Bush falsely claims that the Social Security Trust Fund is nearly bankrupt. And his false solution to his false problem is privatization. Meanwhile, he periodically asks for billions more in taxpayer money for his off-budget, neocon oil wars as blithely as a teenager asks for the keys to the family car.

More war, or secure retirements for lower-wage workers? Think about this as the privatizers spread out across America selling the snake oil of gambling as the way to secure your retirement.