Plutocrats' New Pitch: Let Us Rob You Now So You Can Plan Ahead for Poverty
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Somehow, I’ve wound up on the mailing list for a group of oligarchs campaigning to swindle Americans out of their hard-earned retirement insurance. Hedge fund billionaire Pete Peterson, the budget buffoons Erskine Bowles and Alan Simpson, and the rest of their merry band of hustlers over at the hilariously named Committee for a Responsible Budget have asked me to consider their latest proposal.
So I thought I’d oblige them, what the heck.
Judging from the shrill headline in their mailing [full text here], these men (and a token woman or two) wish to sell me on the idea of “Social Security Reform and the Cost of Delay.”
The cost of delay? Boys, I hear you on that. Any delay in ripping me off must be very costly — for you.
Social Security, the most prudently managed and economically sound retirement program the country has ever seen, and with the very lowest costs, is preventing you from piling up even more money in your bank accounts. Trust me, I really do understand how you feel: Financiers desperately wish to get their mitts on American retirements so they can charge all sorts of outrageous fees. And you hate the prospect of having to pay higher taxes in the future if you don’t “fix” Social Security.
I know how diligently you've tried to privatize America's best-loved program in order to get this show going. You must be bone tired! And I also fully get that as rich people interested far more in the size of your bank accounts than anything so trifling as, say, the strength and health of your country, you hate paying taxes of any kind. You deeply resent such citizen responsibilities, and so you want to cut Social Security as quickly as possible (calling your cutting “reform,” you clever marketing devils!) because doing so will lessen your already minuscule tax burden. Your aim is to hurt America’s retirement program to the point where you can bring up your privatization hustle again. Does that about sum it up?
The thing is, though, cutting Social Security does not make any economic sense for the other 99 percent of the country. The program is in very good shape, hard-working Americans have paid into it, and if (and that’s a big if) any adjustments need to be made a decade or two down the road, we can talk about it then. For now, the only real justification for cutting seems to be the prospect of fattening your bank accounts. Sorry, not sold. I know that's one less yacht for you but I think you can live with it.
Your fear-mongering pitch to me is filled with all sorts of extraordinary economic predictions, which are all the more amazing as none of you had so much as the ghost of an idea that the financial crisis was coming. But never mind, you in your infinite wisdom know that based on your calculations, if you don’t rob me by cutting Social Security now, I will lose benefits in the future. You may not realize I actually read economic projections written by legitimate economists, who inform me that your predictions are worth about as much as those of a carnival fortune-teller. Probably less.
In their paper, “Deficit Fantasies in the Great Recession,” Thomas Ferguson and Robert Johnson, both of the Institute of New Economic Thinking, write:
“Current discussions of Social Security [fall] into two groups: One rails on about how ‘runaway entitlements’ are leading to a deficit explosion; while the other advises patronizingly that Social Security can be saved in the long run by timely changes, typically involving a mix of taxes and benefit cuts, including, notably, yet another rise in the age of eligibility for the program. Neither point of view is persuasive.”
The authors explain how the “deficit explosion” story can be immediately dismissed, but you’re probably aware that that particular line isn’t really working anymore, since more Americans have figured out that 1) Social Security has nearly nothing to do with the deficit; and 2) the deficit is rapidly shrinking. Bummer for you!
So you’ve turned to the old lie about Social Security solvency. Unfortunately for you, economists who have looked closely at the issue do not buy it. Ferguson and Johnson write:
"It is true that Social Security tax receipts declined during the Great Recession, so that for the first time since 1983, the program’s outlays exceeded revenues by a small amount. But this in no way threatens the program’s basic solvency. In 1983, Congress enacted into law recommendations of the Greenspan Commission to raise Social Security taxes to cover the retirement bulge coming from baby boomers. Since then, the program has piled up enormous surpluses. These have been invested in government bonds, thus helping to finance the rest of the government.
As the baby boomers mature, the surplus funds will be drawn down. The 2010 Report of the Trustees of the Social Security Trust Fund projects that the Trust Fund and interest earnings from it will suffice to cover all benefit payments until 2037. Even then, the Fund will not be empty – the Trustees Report projects that the Trust Fund would still cover 75% of all benefits due.” [The latest report from 2012 says more or less the same thing].
So listen up, fellas, if we do need to make a little tweak down the road, let’s make a deal. Since taxpayers like me funded the bank bailouts, how about raising the cap on earnings subject to the Social Security tax, which is currently just a little over $100,000? Wait, what’s that you say? You don’t like that because it means that you would pay your share and I would not get screwed. Well, that's not very sporting of you, is it? Seems like the 1 percent has done pretty well over the last few decades.
Overall, though, I must say I am impressed by the consistency of your crystal-ball reading, because your predictions always point miraculously to the same conclusion: “We’ve got to take your money now, because the future is going to be very bad!”
I appreciate your concern. Mugging me now allows me to better plan ahead for a bleak and ill-funded future. Thanks to your consideration, I could go ahead and start purchasing cat food now and perhaps develop a taste for it. But I think I’d rather just hold on to my Social Security if it’s all the same to you. I kind of think that robbing me of a dignified retirement (which, frankly, looks pretty paltry compared to the rest of the civilized world) is not going to do much for the health of the economy or the cohesion of society.
I have this funny feeling that young people forced to take time away from their jobs to care for poverty-stricken parents and more strain on disability rosters (which you are always complaining about, remember?!?) and less money in the pockets of elderly consumers to pay for healthcare and food doesn’t really sound like a good idea.
Let’s be real, boys. You already got away with murder with your swindles leading up to the Great Recession, and you’ve sucked a lot more money out of the pockets of regular folks in the years since then, spreading your embarrassingly discredited austerity messages (how funny was that Stephen Colbert bit on your favorite debunked economists, Reinhart and Rogoff!). You've triumphed in getting teachers laid off and pensions stripped and whatnot. You have been very successful, and you can raise a glass of bubbly to the financial coup you’ve pulled off. There’s not really much more left to rob, in case you haven’t noticed.
But there are limits. A look at history might suggest to you that pillaging too many people of too much for too long may actually result in said people deciding they have had enough of you. Occupy was a hint.
Yet despite the fact that survey after survey reveals Americans do not want to see cuts to Social Security, and in the face of studies by political scientists who prove that such policy views as yours only reflect the designs of the wealthy, you are undeterred. Time, you warn me, is running out if I don’t start playing your tune and ask policy makers to enact these “changes” you insist upon to make you richer.
Here’s a warning from me: With profits for the wealthy at Gilded Age levels, the population looks to be waking up. Time may be running out for you.