SOCIAL SECURITY "REFORM" DOESN'T PROTECT THE YOUNG, HURTS US ALL
Social Security 'reform' advocates like former Senator Alan Simpson claim that murdering SOCIAL SECURITY will shield young people from future tax burdens. Simultaneously they assure seniors that they would be exempt from benefit reductions. If that were true, only benefits to those below age 55 or 57 or 60 (Simpson uses all three) would be cut. But then, the rules of the game under which most people have been working and contributing for decades would change in spite of the below 55 considerable pay-ins! Deceptive promises before a rape. The budget hawks are whispering bogus sweet nothings.
The most touted 'reforms' would: reduce benefits outright, raise retirement
age (also lowering benefits) and trim COLA (cost of living upgrades).
In other words, 'reform' would protect against future tax increases by
reducing most participants' benefits. Once people realize that, the promised
exemption for seniors will most likely evaporate. So far, the media, diverted
Simpson's cornpone expostulations, do not report these underlying realities. Senator Simpson is not a Tea Party loudmouth;
he's President Obama's pick to co-chair the new Committee on Fiscal Responsibility. Co-chair Erskine Bowles' assurance
to a banker's convention that 'We'll mess with Social Security', drew sparse media attention. Corn pone or boring prose,
their plans will hurt - everyone.
You'er all a bunch of WELFARE BARBARAS! White House & CONGRESS tell us.
Recently on 60 Minutes, Senator Simpson described Social Security recipients
as 'people who live in gated communities
and drive their Lexus to' dine out. In the real world, after the meltdown of stock market, pension plans, 401(k) s, IRAs, and
home value, program beneficiaries, including over 3 million children, will depend more heavily than ever on Social Security's
modest benefits. This year retiree benefits average $1,168 a month (many get less); $13,016 a year is not Lexusland, its
penny pinching territory. On average, women earn less, draw lower benefits and less frequently receive pensions than men,
making their Social Security benefits especially crucial. And whatever they get after age 55 will be taken out of their ESTATE by the GOV LATER so the kids won't get a thing, in SPITE OF HUGE PAY-INS by workers.
Raising normal retirement age would reduce benefits for those retiring
thereafter. No one can justify moving the goal posts
that way for millions who have already contributed to the program for decades.
The 'reformers' argue that because we live longer, we should work longer.
That ignores people worked out by hard jobs.
And the 'reformers' offer no measures to assure available jobs, nor measures to curb the inducement for employers to
minimize employing older people because their health insurance costs more. Indeed, many employers seeking to reduce
costs offer early retirement inducements to employees, often spiced with warnings that, if too few 'voluntarily' elect
retirement, layoffs will ensue. While some 'experts' favor raising retirement age, the prospects of job loss and lifetime benefit
reductions chill most everyone else.
Some urge reducing COLA, claiming that it overstates inflation. In reality,
the current formula catches up to past prices, not
current ones, and so chronically trails rising prices. And, its formula averages medical care costs, thereby understating the
higher health care costs of older people.
Federal Reserve chairman Ben Bernanke explained the budget hawks' focus
on Social Security 'because, to quote bank
robber Willy Sutton, that's where the money is.' 'The money' is already over $2.4 trillion of reserves, accumulated from
payroll taxes and interest the U.S. Treasury owes for borrowing from Social Security to pay other government
expenditures. The deficit causing so much alarm stems largely from the Bush Administration's borrow-and-spend policies,
the financial meltdown resulting from the burst real estate bubble, the stimulus measures they made necessary, the Bush tax
cuts, two major foreign wars and long-term tax breaks that go mainly to the wealthy. In contrast, Social Security pays its
way, causing not one dime of deficit.
Many believe that Social Security is unsustainable because, with Baby
Boomers retiring, the beneficiary population will
grow faster than the working population, resulting, they fear, in too few young people to support them. This
oversimplification simply ignores that increasing the employee and employer FICA tax rate by one percentage of payroll
each would generate 75-year actuarial balance. Living standards would rise because, same projections show, incomes will
rise more than those modest contribution increases. That outcome results from improving productivity - the greater output of
goods and services by each person working, generating more to share.
We don't hear that message or the deficit-reducing potential of Candidate
Obama's popular proposal to raise the cap on
income subject to the payroll tax. Rather the 'reformers' and media warn that without benefit cuts and/or higher retirement
age we face national bankruptcy, that we must cut benefits to persuade foreign investors to buy U.S. Treasury bonds. In
reality, foreign investors are flocking to buy Treasury issues, the ones so often derided by 'reformers' as worthless iou's,
despite the hawks' cries of 'wolf.'
Cutting Social Security beneficiary purchasing power by tens of billions
would damage most of us, including the legions of
merchants beneficiaries patronize. Those businesses employ countless others, whose wages go to purchase the goods and
services of yet other employers. The famed Samuelson and Nordhaus describe this 'multiplier effect,' as 'an endless chain of
secondary consumption respending.'
Cutting Social Security benefits is bad for beneficiaries, bad for business, bad for the economy. Bad for America's MORAL KARMA, the 'what goes around comes around' factor.
Joan and Merton Bernstein, Huffington Post -