Thursday, September 8, 2011

The Truth About Social Security and Election Engineering

This is where the US Social Security ACT came in, August 14, 1935. Today, over seventy-six years later it still enjoys such popularity that between 65-70 percent of citizens polled on the subject say they would rather see Social Security taxes raised than see benefits cut. This includes both independent and Republican voters. (see link below)
Social Security is  the one program that has had the most effect in changing the lives of elderly people, and those who have lost parents to premature death while they were still in their teens through the SSI support.  2/3rds of the elderly lived in poverty before the Act. Today that number is less than a quarter.
  It is the Jewel in the Crown of Franklin Roosevelt's "New Deal", as important to his legacy as the Reagan tax cuts of 1981-2 were his supporters. Reagan himself, a former Democrat until 1962,  bowed to FDR's wisdom  when he called for a commission and later signed legislation strengthening Social Security.
So why do Republicans like Rick Perry want to kill the program?  So they can out-Reagan Reagan? 

“It is a monstrous lie. It is a Ponzi scheme to tell our kids that are 25 or 30 years old today, you’re paying into a program that’s going to be there.”
— Gov. Perry  (R-Texas, Governor and currently leading Republican Candidate for Presidential Nomination in 2012)
According to journalist Glenn Kessler of "The Washington Post" in his political analysis of last night's GOP debate, Perry are "a bubble off plumb", as my Uncle Ragnar, a union carpenter for thirty-five years, often said.

 Take it away, Glenn:      
"Perhaps the governor does not know the dictionary definition of a Ponzi scheme. Here’s what Merriam-Webster says: “An investment swindle in which some early investors are paid off with money put up by later ones in order to encourage more and bigger risks.”

"This is a frequent mistake politicians make when talking about Social Security. It is not an investment vehicle; it is intended to provide income security as well disability and life insurance. Just more than 60 percent of the 54 million beneficiaries are retired workers; the rest are disabled workers, dependents or survivors.
"Social Security is a pay-as-you-go system, which means that payments collected today are immediately used to pay benefits. Until recently, more payments were collected than were needed for benefits. So Social Security loaned the money to the U.S. government, which used it for other things. In exchange, Social Security received interest-bearing Treasury securities. The value of those bonds is now about $2.6 trillion. (We have written about this at length.)
"In any case, Perry is wrong to label Social Security a Ponzi scheme. Ponzi schemes ultimately go bust and everyone (except possibly early investors) generally loses their money. Social Security faces a long-term funding issue, but one that most experts say is manageable. After all, the Social Security actuary says that Social Security’s shortfall is 0.7 percent of the gross domestic product over the next 75 years."
So why this misleading synthetic panic that reactionary politicians like Perry and the "tea party" extremists seem to want to spread.  It goes back to an idea that Ronald Reagan threw out in his first Inaugural Address as President.  "Government is not the solution. Government is the problem." 
Such sweeping generalizations always play well with the  swath of voters out there who are either looking for simple solutions to complex problems or who are "low information voters" or polling data subjects.  The former group wants to believe the worst about an institution that they see as intrusive to their lives.  By "poisoning the wells" of all government efforts that hope the programs they abhor will be undermined as well.  I believe there is really not as many voters like this as it appears, but they are usually the most active and the most likely to vote in straw polls and caucus events that require people to eschew the secret ballot. Further, they are generally loud and simplistic in their rhetoric, and so play well in the visual mediums like television news where a picture or a pithy phrase  is worth a hundred reasonable essays that measure carefully the pros and cons of a given issue.

And if you undermine people's belief in the interests of their self-government, then it is more likely that "low-information voters" will just sit out an election, felling that "they all all crooks" or "every politician is the same".  This plays into the hands of corporate-funded lobbying groups like Freedomworks, Crossroads, and the billionaire Koch Brothers various ways ot promote plutocracy over democracy and privatize everything, including the Social Security system, a process favored by George W Bush which would have been a disaster after the 2008 mortgage-backed securities meltdown on Wall Street in 2008.

Special interest groups  exert pressure on Congress and chief executives in all states by withholding cash donations and/or promising that their single-issue voters (NRA members for example, or anti-tax fanatics) will come out on primary day and remove them from office.
In other words, discourage the distracted voter out there  who is working too much or looking for  work and have too many other domestic problems (child care, bills, family budget, elder care, etc., ) to pay attention to the differences in political candidates. If they stay home on election days, single-issue groups have more power.  Further, if they only can rely on television ads to tell them about candidates, a constant stream of anti-government invective will cause many to just shrug and say "a pox on both their houses."  That's' why the Republican activists are always trying to make it harder for people to vote by forcing more and more onerous identification laws in swing states like Wisconsin--to keep the harried and the disenfranchised who cant afford  the equivalent of a passport just to vote in the country they and their parents were born, worked, lived and paid taxes in.
There are signs that  people are waking up to the draconian dreams  of Rick Perry, even with his chief challenger, Mitt Romney, distancing himself from the remarks of the Texan. But we also live in an era where the "economic royalists" are back in power as they haven't been since the 1920's.  All progressive legislation in the past 100 years is up for grabs.

This is nothing less than a fight to stay in 2011 and beyond and not to go back to the Age of Robber Baron uncertainties for average workers.  Beware those who offer radical solutions and easy fixes. 


  1. I missed this presidents speech and Doug it's the most confusing time economically there. The system there is not economically sound and here again within the foundation of Social Security one can only hope that there are some matters which are stable. There are frankly many which I don't have a clue as to which can honestly say that everything can be fixed quickly. Yet you would think that some of these areas which are within the foundation of the economy shall stay within place - this one is one of them - with no doubts.

  2. I hope you're right Jack. The best way to keep Social Security up and running is to stop fiddling with the payroll tax--something Obama's "Brain Trust" can't seem to do now that he knows the GOP will stop him from letting the Bush Tax Cuts expire.

    Why Obama keeps wanting to further cut the payroll tax is odd to me. I guess it's easier to put ordinary people in a sweat about their future than it is to restore the federal income tax to what it was back in 2000, when we had a robust economy.

  3. I have not kept up recently with what President Obama proposed but as mentioned Douglas I believe it's going to take time and a partaking of all with the economic factors in concern and not there own agendas.. Hope..Hope..Hope.

  4. Excellent post Doug in which you raise some of the major dilemmas, paradoxes even in dealing with the political system in the US. Other political systems may well have different problems, but it seems to me that the electoral arrangements in the US are convoluted, not-very democratic and bordering upon the bizarre.

    The point you make about voter apathy is an interesting one, because whether they vote of don't vote it seems to me that the outcome is guaranteed to be the same. That is a right wing anti-welfare pro-war global corporate hegemony which is not elected and thus is not affected by the vote or the lack of it.

    Social Security is indeed a human right and the only meaningful dividend from the taxes we pay to subsidise the luxurious lifestyles and enhanced power and influence of interests antithetical to our own best interests.

    The only way out of that dilemma for America is for each state to take on the sole responsibility for delivering social security services so that the political complexion of each state represents the entitlement of its citizens to goods and services condoned by a majority of the electorate.

    The differentials would inevitably lead to the Balkanisation of the United States but in the current historical globalisation of politics and the privatisation of macro economics the nation state is only a convenient myth anyway, Roosevelt's America is long gone I think. Now it is the time to think outside the box I believe because at a federal level what voters think, don't think, support or oppose doesn't make a jot of difference, the electorate has no influence on events whatsoever.

    Each US state is a colony of the Anglo-American Empire as are the national entities that comprise the equally non-existent United Kingdom of Great Britain and Northern Ireland....all poppycock!

    It really must be time we had our own insurgency by now as the Arab Spring blossoms into the Nuclear Winter courtesy of NATO/Israel regime change in the NATO countries has become a pressing priority I think.

    We are dealing with tottering economies and the failed states of the NATO pact here all we have to do to overthrow them is ignore them and set up something else that doesn't involve them, simple really.... it happens all the time, it is the grey economy meeting the green revolution and it is even as we type, out there doing it.

    We do need to go back to basics I think, there really is no hope otherwise and no credible apostles of hope...we need to consider the options and have an audit of our resources, there may be more than we thought if we turn things in the right direction and try to shut out the parasites.

    That's my view anyway Doug

  5. One can hope that time and better election choices by voters will work, Jack.

  6. And these are the political system's most positive virtues, AA.

  7. And these are often its most positive features may I add, AA.