What You Need to Know About Obama and the Social Security Sell-Out
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Follow the Money
So why, despite the clear wishes of the American people. are so many politicians in favor of cutting Social Security? The answer can be found on Wall Street, naturally.
The whole idea of Social Security is anathema to American financiers, who not only dislike paying taxes but also would dearly love to see private retirement accounts on which they could charge fees. Find a financier moving around Washington, and you will find a Social Security raider. Economists Thomas Ferguson and Rob Johnson pointed this out some time ago in their article, “ From New Deal To Raw Deal: The Real Economics Of Cutting Social Security.” They cite the case of Peter Orzag, the former head of the Obama administration's Office of Management and Budget, who has since accepted a position at Citigroup (love that revolving door!). Orzag has been known to express some very curious --and marvelously telling -- ideas about Social Security. On the one hand, he knows perfectly well that it has nothing to do with any so-called budget crisis. Ferguson and Johnson write:
“The first yellow flag is Orszag's frank acknowledgment that Social Security features barely at all in any putative budget short fall: ‘Social Security is not the key fiscal problem facing the nation. Payments to its beneficiaries amount to 5 percent of the economy now; by 2050, they're projected to rise to about 6 percent.’”
So why is Orzag a Social Security radier? Because he thinks like a financier:
“As Orszag frankly confesses, ‘even though Social Security is not a major contributor to our long-term deficits, reforming it could help the federal government establish much-needed credibility on solving out-year fiscal problems.’"
Bingo! In other words, Orzag is saying that politicians have to cut Social Security to prove to the markets that they can. Oh, the wondrous logic of free market fundamentalism.
A shredded Social Security program is most definitely what the financiers want. But it’s not what the American people want. It remains to be seen what will happen come November. If Obama wins, we can expect a split in the GOP between moderates and conservatives. If the conservatives get the upper hand, they will be screaming for cuts to Social Security as the January 1st fake fiscal cliff deadline becomes the focus in Washington. Whatever happens in the GOP, if Obama relies on the advice of people like Erskine Bowles in negotiations, your retirement is not safe. Any politicians who think they can ignore the express wishes of the American people will have earned every ounce of trouble they get. Let’s make sure they see a whole lot of it coming.