THE CORPORATE MILLENNIUM
Wall Street's Hostile Take-over of Social Security
By Hans Riemer*
We will TAKE GOOD
CARE OF YOUR MONEY!
It will indeed be a new economic age-- a new "paradigm"-- for Wall Street banks and huge corporations if they win their campaign to replace Social Security benefits with countless millions of mandated savings accounts. Stock prices will explode. Better yet for Wall Street investment banks-- they don't have to worry if the market dives. They get rich handling your transactions, whether you are winning or losing.
According to estimates by Wall Street Journal reporters, one prominent plan to "privatize" Social Security, would funnel about $60 billion a year into mandated savings accounts (WSJ 2/20/96). The more radical plans would divert literally hundreds of billions of dollars through Wall Street's hands: a bone-crunching, thigh-tearing, back-biting Wall Street feast of administrative fees. Talk about a costly bureaucracy.
Social Security matters to young people. More than one-third of Social Security beneficiaries are not retired-- they are younger families in which a parent died, or they are disabled workers and their families. There are more than 33 million direct Social Security beneficiaries, and many more if you factor in children who are being raised by their grandparents (Social Security Administration).
The positive inter-generational nature of Social Security has been totally corrupted by Wall Street-- and particularly the neo-con "youth" groups they fund. Third Millennium, architect of the polling figure that more young people believe in UFOs than Social Security, has, like groups such as the US Jaycees and Economic Security 2000 (a real misnomer), taken great gobs of money from Merrill Lynch, American Express Financial Advisors, Prudential, AT&T, Exxon, and a variety of other corporations and right-wing foundations. So have the other Washington think tanks and bogus "grassroots" groups that are promoting mandated personal savings. If I were a Wall Street CEO, I would be ready to spend millions of my own money in this fight. And they will, before its all over; they are smart investors, after all.
Social Security protects young families from death or disability and it provides retirement benefits that most of our grandparents depend upon for much of their income. Its not a "rip-off," a "scam," or any of that baloney. Since employers have dumped private pensions (only half of all workers have pensions), it is the biggest and often the only source of guaranteed retirement income most people have. It is also America's strongest statement of community in a time of economic, racial, and generational divides.
And, while the Social Security Trust Fund is out of balance over the next 50 years, its not going "bankrupt" by any stretch of the imagination-- the shortfall is roughly 15 percent over 50 years, not 100 percent (SocialSecurity Trustees Report). Social Security's long term solvency can be restored with a mix of modest changes-- taxing Social Security benefits like private pensions, extending coverage to state and local employees, and a slight benefit cut or tax increase-- and a more significant change, such as hitting wealthy individuals with a FICA increase or adopting a different investment strategy for the Trust Fund that can earn a higher rate of interest.
The good news: there are ways to beat Wall Street. And you can take part. The message of privatization, often under the banner of "reforming," "personalizing," and even "saving" Social Security, is about young people. America will have "shared sacrifice" for the benefit of young people or "future generations," is the story line that Wall Street's think-tanks and politicians will be pushing. So, really, this is a ready-made opportunity for us to call them out for what they are: hysterical, drooling, thieving hounds. Respectfully, of course.
Of course. Now, here is how you can get active on this issue. Start with the Democracy Teach-Ins, or any other collective action, and add a workshop on Social Security privatization (www.2030.org for info). Do a local event with a chapter of the AARP or the National Council of Senior Citizens. Send an email to a member of Congress, or better yet, an organizational statement (cc: the 2030 Center, we are going to do an email drop). Tell them that you want the fundamental principles of Social Security strengthened for future generations-- and hold the mandated private savings, please!
There is another way that will appeal to your worst instinct: greed. Gladly, what you get the dough for is being a good activist. Here is the rap. The Pew Charitable Trusts put up $15 million dollars to fund an organization whose mission and title are the same: Americans Discuss Social Security. They, in turn, are funding a project, the Social Security Challenge, that is a rare collaboration of organizations, some of whom publicly oppose one another's views (2030 Center and USSA support Social Security, Third Millennium wants to dismantle it), to sponsor a national competition with two prizes for the winning team: the chance to implement their own project, with a budget of up to $100,000, and a $10,000 check per person that can only be cashed to pay for education. There are regional cash-prizes.
Specifically, what you do is design a campaign to get students across the country talking about Social Security. The winning proposal gets funded, and there are regional cash prizes for runners-up. In other words, its a potential bonanza for good organizers. Look, if I could run a radio spot for this, I would use that voice that they use to announce MONSTER TRUCK rallies. Its a real opportunity. Check it out soon, though, there is an April 28 deadline.
Think about it. Take action. And keep a couple of additional thoughts in mind. The most important thing about Social Security is its collective nature; breaking it up into mandated savings accounts is wrong because it burdens individuals, rather than the government, with risk. Having a collective, private investment of the Trust Fund would definitely help finance the program (reducing any benefit cuts or tax increases); and it does not violate any fundamental principles of Social Security.
And if you really want to get Wall Street: keep Social Security benefits the same as current law, and create the option for workers to contribute to voluntary personal savings accounts on top of Social Security. Then require businesses to subsidize the voluntary accounts, and require a non-profit, quasi-government agency (like the Fed) to manage them. Result? More retirement savings, and no fees for Wall Street. Let ‘em bleed!
* * * * * * * * * * * * * *
Hans Riemer is the Director of the 2030 Center (http://www.2030.org), an action tank founded and run by young leaders to conduct research and advocacy about economic issues affecting America's future, based in
This author of what's below, Hans Riemer 2030ctr @ tidalwave.net, points to
the fact that a group called Americans Discuss Social Security (ADSS)is
sponsoring a contest on US campuses: this contest has a cash prize of
$10,000, available for each of several "team" members, who win the
competition to design a program that ADSS can implement next year, to get
students on campuses all across the country talking about Social Security.
The winners get to direct the project for ADSS. There are also regional
cash prizes for runners-up.
Riemer implies that this is part of the process of firming up public
attitudes about Social Security for the ultimate dis-benefit of Wall
Street et al. He is one of the contest judges, and he is
You know someone who can contribute -- I expect the contact info can be
found through Hans Riemer 2030ctr @ tidalwave.net
His piece will be forthcoming from INFUSION and is generally about Social
Security and the coming war over the program's future as Wall Street
investment corporations try to convince the public that we should abandon
Social Security's guaranteed benefits in favor of a system of individual
stock market accounts.
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