Protecting Social Security from the Looters

[j_b]

Protecting Social Security

 

by Dave Lindorff

 

[..]

 

Look at the latest study out of the Senate Special Committee on Aging titled: "Social Security Modernization: Options to Address Solvency and Benefit Adequacy."

 

That just-released report, prepared by committee staff with the help of the nonpartisan Congressional Research Service, lays out the shortfall facing Social Security as America's Baby Boomer population begins to retire. It concludes that the alternative to raising the retirement age to 70 from the current 66, increasing the already onerous Social Security payroll tax by another 1% of income for both employees and employers, and reducing the annual cost-of-living adjustment for benefits by 1% (meaning retirees would fall further and further behind the cost of living each year), would simply be to eliminate the cap on the income that is subject to the Social Security tax.

 

Let me make that clear by putting it another way.

 

The committee report states that if the Social Security tax applied to all income instead of just the first $106,000, as things stand now, then Social Security would be completely funded at least through 2075. In fact, instead of a $5.3 trillion shortfall, there would be a 16% surplus! The report states that even if those wealthy folks who had their higher incomes taxed were able to collect higher benefits--as much as $6000 a month in current dollars--the added tax dollars raised would still ensure that the system would remain funded through 2075 and beyond.

 

Yet despite this obvious solution, we are continually warned in grave tones by the corporate media, by members of Congress, by President Obama and by Wall Street hucksters like Peter Peterson, that Social Security faces a crisis. We are continually told that benefits will have to be reduced, especially for current workers. We are continually told that the retirement age will have to be raised, so that people who work at strenuous, stressful, mind-numbing jobs will have to wait until they are 70 to slow down and spend time with their families.

 

How in hell would you explain this in a high school civics class?

 

Social Security, surely the single most popular program to come out of the New Deal in the 1930s, is currently the only thing keeping 44 percent of America's elderly out of poverty. Nearly a third of its benefits are paid to poor children who have lost the wage earner in their family, to widows, to the permanently disabled and to the extreme elderly. Twenty-five percent of beneficiaries depend upon Social Security payments for 90% of their incomes, thanks to the failure of most employers to offer any kind of a pension to their workers. This is, in short, a critical program that protects our elderly, our disabled and our poor. And it ensures everyone a basic income in their old age--an average of $1300 per month for life--and with very little overhead.

 

Yet this program, currently underfunded, is in danger now.

 

It is threatened not because of demographic changes, but because of corporate lobbyists and ideologues who want it killed. And these twisted, greedy people are desperately trying to keep the vast majority of American people who are depending upon Social Security for their old age from doing the logical thing, which is to tax the rich and make them and their employers pay the same flat rate that they pay on their income--15%--so that the system will be secure indefinitely."

 

http://www.commondreams.org/view/2010/05/19-7

[billcoe]

Nicely written and very informative, thanks for sharing it.

 

BTW, to everyone: I didn't realize there was more, click the link.

 

" Published on Wednesday, May 19, 2010 by CommonDreams.org

Protecting Social Security: It's a Flat Tax, Stupid!

 

by Dave Lindorff

 

Let me make a postulate: In a democracy, if there is a legislative proposal that would significantly benefit 80 percent of the population and cost them nothing, and that would be paid for by a insignificant tax on the richest 20 percent of the population, who themselves would receive some benefit from the added tax, that proposal would be overwhelmingly approved. If you accept that postulate, you would have to conclude that the US is no longer a functioning democracy......"

 

More there, click the link.

[Nitrox]

The US has never been a democracy. Makes you kind of wonder about ol' Dave Lindorff.

[tvashtarkatena]

The US is most certainly still a democracy, its just that a large percentage of the population is either too stupid or lazy to wield it properly.

[olyclimber]

Thats great and all, but let me enlighten you to the facts.

[tvashtarkatena]

You're entitled to your facts, and I'm entitled to opposite facts.

[tvashtarkatena]

Actually, your facts are really only factoids.

[Nitrox]

The US is most certainly still a democracy, its just that a large percentage of the population is either too stupid or lazy to wield it properly.

 

Nope, Representative Republic. If the US were a true democracy then you wouldn't see laws passed that lack majority support.

 

 

[tvashtarkatena]

Constitutional democracy. Tyranny of the majority and all that. Look it up.

 

Look up 'synonym', while you're at it.

Edited May 21, 2010 by tvashtarkatena

[olyclimber]

YOU'RE ALL WRONG!

[Nitrox]

Constitutional democracy. Tyranny of the majority and all that. Look it up.

 

Look up 'synonym', while you're at it.

 

Otherwise known as Liberal Democracy, blah blah blah.

[olyclimber]

ZING!

[j_b]

Classic non-sequitur from the teatard. Representative Republic and democracy aren't mutually exclusive.

 

Let's however note the lack of objection to the facts presented by Lindorff about SS. Let's remember that next time someone claims SS is a Ponzi scheme.

[j_b]

and now this: HUD is Trying to Privatize and Mortgage Off All of America’s Public Housing

 

by George Lakoff

 

The Obama Administration's move to the right is about to give conservatives a victory they could not have anticipated, even under Bush. HUD, under Obama, submitted legislation called PETRA to Congress that would result in the privatization of all public housing in America.

 

The new owners would charge ten percent above market rates to impoverished tenants, money that would be mostly paid by the US government (you and me, the taxpayers). To maintain the property, the new owners would take out a mortgage for building repair and maintenance (like a home equity loan), with no cap on interest rates.

 

With rents set above market rates, the mortgage risk would be attractive to banks. Either they make a huge profit on the mortgages paid for by the government. Or if the government lowers what it will pay for rents, the property goes into foreclosure. The banks get it and can sell it off to developers.

 

Sooner or later, the housing budget will be cut back and such foreclosures will happen. The structure of the proposal and the realities of Washington make it a virtual certainty.

 

The banks and developers make a fortune, with the taxpayers paying for it. The public loses its public housing property. The impoverished tenants lose their apartments, or have their rents go way up if they are forced into the private market. Homelessness increases. Government gets smaller. The banks and developers win. It is a Bank Bonanza! The poor and the public lose.

 

And a precedent is set. The government can privatize any public property: Schools, libraries, national parks, federal buildings - just as has begun to happen in California, where the right-wing governor has started to auction off state property and has even suggested selling off the Supreme Court building.

 

The rich will get richer, the poor and public get poorer. And the very idea of the public good withers.

 

This is central to the conservative dream, in which there is no public good - only private goods. And it is a nightmare for democracy.

 

The irony is that it is happening under the Obama administration. Barack Obama, running for office, gave perhaps the best and clearest characterization of what democracy is about. Democracy, he has said, is based on empathy - on citizens caring about and for each other. That is why we have principles like freedom and fairness for everyone. It is why social responsibility is necessary. The monstrous alternative is having a society where no one cares about or for anyone else.

 

HUD, under the Obama administration, is about to take a giant step toward that monstrous society.

 

[..]

 

http://www.commondreams.org/view/2010/05/21-1

[Nitrox]

Classic non-sequitur from the teatard. Representative Republic and democracy aren't mutually exclusive.

 

Let's however note the lack of objection to the facts presented by Lindorff about SS. Let's remember that next time someone claims SS is a Ponzi scheme.

 

I didn't bother reading your first article. I don't really care what your cut and pastes have to say. You're pretty much only good for entertaining me with colorful name calling.

 

 

 

[j_b]

Clearly, it's not like your reading what people post has ever elicited an intelligent response from you. So honestly, why should anyone care?

[Nitrox]

Clearly, it's not like your reading what people post has ever elicited an intelligent response from you. So honestly, why should anyone care?

 

No, its just you. I happen to agree with some of the members here. I have yet to see you post anything original. You're a one trick pony.

 

 

[j_b]

You agree with the Bush dead-enders even though nobody ever supported him, right?

 

And spare us the one liner drivel. Even with cutting and paste, I still write 10X more in my own words than you can dream of.

[JayB]

All this from someone who still persists in believing that the SS "Trust Fund" is composed of something other than special purpose Treasuries that will have to be funded out of general revenues when SS spending exceeds inflows and the SSA has to redeem them to cover the difference.

 

The net economic output of the US is not sufficient to cover all of the claims that state, local, and federal governments have issued against it alone, let alone in conjunction with private debt. The only possible outcomes when there aren't enough real resources to fund current consumption are default, devaluation, or massive decreases in current spending. A partial, de-facto default via devaluation is the most likely of these three.

 

IMO the fundamental solvency issues at play here are far more serious and worrisome than anything associated with the housing bubble and its inevitable collapse. The expansion of public debt can only exceed the expansion of output for so long before the chickens come home to roost, and they've just landed in Greece. My sense is that the southern Euros will give up their entitlements when they're pried out of their cold, dead hands and we'll see the whole thing go down in flames (most likely via inflation) before seeing any structural reforms sufficient to keep the thing afloat.

 

 

[summitchaserCJB]

Somebody has been reading some Atlas Shrugged.

[JayB]

If there's any connection there at all, it's much more likely a consequence of Rand reading Mises and by extension Menger, Bohm-Bawerk, etc than the converse.

 

 

[summitchaserCJB]

Not sure on that. Not as familiar with those. But Rand had some pretty solid ideas. I only bring it up because the phrase "looters" was used. That phrase was used left and right in that book.

[summitchaserCJB]

Rand asserted, through her book, which reads more like a treatise at some points and can be rather repetitive, that "looters" leach off of, and subsequently undermine, the work of the legitimate few who embrace, cultivate, and exude what is essentially capitalism.

[summitchaserCJB]

Atlas shrugged is probably the best book I've ever read. Read it while backpacking across Europe too, which was awesome.

[rob]

OMG you're a rand fan. Solid ideas?

 

EVERYONE FOR THEMSELVES!!!