Dean Baker: The Social Security WMD Story

[marmar]

from Truthout:

The Social Security WMD Story
By Dean Baker
t r u t h o u t | Columnist

Tuesday 23 January 2007

We all remember President Bush's false claims about Saddam Hussein's weapons of mass destruction. These claims were the basis for getting the country into the Iraq War, a disaster with no obvious end in sight. The same sorts of claims are being made about Social Security, with the goal of inflicting a similar disaster on the country's workers and retirees.

Just to get the facts straight, according to the projections from the non-partisan Congressional Budget Office (CBO), Social Security can pay all scheduled benefits until 2046 with no changes whatsoever. CBO projects that even if nothing is ever done, the program could continue to pay almost 80 percent of scheduled benefits forever, providing retirees in the second half of this century with benefits that are far higher than today's seniors receive. In short, the idea that Social Security is about to go bankrupt - that there will be "nothing there" for young workers - is nonsense, as everyone familiar with the projections knows.

But, we keep hearing the drumbeat about Social Security's looming bankruptcy for the same reason that we heard the stories about Saddam's weapons of mass destruction: powerful interests - who, in this case, want to gut and/or privatize the program. The financial industry could make a fortune in fees and commissions if they could ever get their hands on Social Security.

Also, because the program is progressive, high-income workers, the folks who finance the presidential campaigns of both political parties, don't get a good deal from Social Security. These people would likely do better putting their money in the stock market. And, they have no qualms about gutting the country's most important social program to increase their returns, just as they don't mind giving the country a huge deficit to get another tax cut.

While the Bush administration is likely to lead the charge on any renewed effort to cut and/or privatize Social Security, because of the power of the constituencies behind the gutting of Social Security, he is likely to find allies among leading Democrats in Congress. Remember, when President Bush was spinning his scare stories about Saddam's WMDs he also had plenty of assistance from top Congressional Democrats.

Similarly, the media can be counted on to help sell the Social Security scare stories, including so-called "liberal" outlets like the New York Times, CBS, National Public Radio, and Jim Lehrer's "News Hour." In the lead-up to President Bush's invasion of Iraq, these outlets gave ample time to the administration and its allies to promulgate their tales of WMDs, while almost completely excluding the experts who tried to point out the flaws in their arguments. There is no reason to believe that the media has become more responsible in the last four years. In short, it is entirely possible that we will see the same kind of massive attack on Social Security as the "shock and awe" campaign that President Bush launched on Iraq four years ago. ....(more)

The rest of the article is at: http://www.truthout.org/docs_2006/012307C.shtml

[no_hypocrisy]

1. Can someone tell with certainty whether the SS taxes taken out of

my paycheck are actually being deposited into the SS Trust Fund or are they being dumped in the GAO General Account that pays for stuff like war and *'s salary?

[RaleighNCDUer]

2. Does it really make any difference, as long as SS meets its

obligations?

In truth, the "trust fund" doesn't exist - it's just a line in the bookkeeping.

[Igel]

3. Shell game.

The money's put in the 'trust fund', and then promptly traded for something equivalent to an IOU. The 'trust fund' is full of IOUs.

When the trust fund needs money, the Congress will be called upon to redeem them with money from general revenues. It can do that, but the estimates are that taxes will have to increase quite a bit, far more than most people are willing to put up with. Distressingly, there's no enforceable requirement that Congress redeem the IOUs--they're owed by the US government to the US government.

(But don't worry about that, Medicare/Medicaid will probably be burgeoning far too much as well, and it doesn't even have a trust fund full of IOUs.)

[fasttense]

4. When Raygun doubled the baby boomer's Social Security Taxes

so that the baby boomers were the first generation to pay for both their own and their parents' retirement, he created the trust fund. Repukes were afraid that the baby boomer's retirement would bankrupt Social Security so they made us pay through the nose for it. Half our taxes goes to our parent's retirement and half is suppose to go to the trust fund for our retirement. Being a repuke he couldn't have all that money just sitting around, so he let Greenspan borrow it to make the budget deficit look smaller. It is just an account entry. Current law requires the government to pay your Social Security (that you have already paid for, twice), at appropriate amounts at the appropriate times, out of the general budget.

All the presidents after Raygun continued to borrow it to hide their budget deficits. It is simply a number on the books. It wouldn't be a problem if we did not have such a huge deficit or if the government hadn't borrow it.

Social Security is our due. We paid for it and the government is obliged to keep their promise and give us our benefits.