Social Insecurity

The Social Security Crisis is classic Bush Administration:

Establish your goal: Preservation of Republicans in power in perpetuity. Is the date predicted for the insolvency of Social Security a surprise? Hardly. Note that it won’t run out in the lifetime of any current 50+ Bush voters, oh no – can’t have that. How convenient to have it run out just about the time the young (oh, say 20 year olds), who mostly don’t vote, will be retiring. Republicans live off the votes of the old. When the young vote at all, they pretty much don’t vote Republican. If you are looking to ensure the future of the Republican party (and make no mistake the Republicans have been extremely effective and organized in building up their base and policy platforms) you need to find a way to bring the young into the Republican fold. A nice fat bribe would work.

Create the Crisis: Take a perfectly good, solvent benefit that everyone loves. Make draconian assumptions as to the performance of the US economy over the next 40 years (why 40 – see above) in order to show that this benefit will run out (Note: make assumptions required to get the desired outcome, even if they are completely contrary to the assumptions used, for example, to justify tax cuts or pass prescription drug benefits). These assumptions will crop up again later. Let’s be clear: social security is perfectly solvent: the funding issues were dealt with in the 80’s. The Trust Fund currently takes surpluses (yes surpluses – even Bush can’t invoke a crisis today) that will fund the shortages when the Boomers retire en masse. Of course, I don’t know about you, but the last time I checked, economists, never mind the Government, can’t predict what will happen next month (look out – here comes the next Iraq appropriation!) never mind 40 years from now. A funding crisis in 40 years?! Gimme a break; worry about the debt we have today.

The Bribe: Point to the crisis you invented and tell the 20 years olds that the Government will blow their money. Brilliant – who’s going to question THAT argument?! After paying into the system for their entire lives they won’t see a nickel of that money. Then offer the bribe: KEEP your money. Don’t give it to the Government, invest it yourself. Join the “Ownership Society”. Hmmm… money in pocket today or maybe nothing 40 years later. Well that’s a no-brainer isn’t it? Especially to a 20 year old. Somebody who didn’t lose their shirt in the Tech Wreck.

Spin like a Whirling Dervish: Social Security is a pay-as-you-go system. People working today, through payroll taxes, fund the benefits of today’s retired. The excess, and there is a lot of that these days, goes into a Trust Fund that will be used to make up any shortfall in the future should the number of retirees (more correctly the dollar value of benefits to) exceed the number of workers (dollar value of tax receipts). The Bush Bribe causes several really, really big problems. First and foremost is how to pay for it. Being Republicans, and therefore having no idea that money does not, in fact, grow on trees, there is NO PLAN for how to pay for the Bribe. Allowing workers to take a portion of their Social Security payroll taxes out of the system simply castrates the pay-as-you-go system. It takes money from current retirees, and the Trust, and gives it to people to blow in the stock or bond markets. It is, in fact, a self-fulfilling prophecy: the Bush plan creates the very conditions required to ensure the insolvency of Social Security (in the short term, mind you, not 40 years from now). This is the so-called “funding gap”. But this is a detail. After all it is entirely plausible that the elimination of Social Security is exactly the outcome the Republicans desire. There are actually several big problems the Administration must be concerned with:

(1) Where will the money come from? The Bush Administration insists that they will not increase taxes or reduce current or future benefits. Response: Drum roll please… “That is a Detail. I just make the proposals. It’s up to Congress to figure out how to make it happen”. Well I suppose it’s as good an answer as any. It IS a Republican Congress after all… see previous comment about money growing on trees.
(2) Retirees, a majority of whom voted for Bush, are screwed. Unless additional income is found, benefits will de facto decrease. Response: Raise taxes. You say “But wait! Bush said no increase in taxes!”. He did, and still does. But just this week Bush allowed that he might consider raising the $90k income cap on payroll taxes. Note: Retirees don’t pay payroll taxes. Read my lips: No new taxes.
(3) The young will blow their retirement money speculating in Harkin Energy stock. Response: the Government will create tightly controlled investment options specifically for these investments. Huh?! So let me get this straight: we’ll take some payroll tax money, say the amount that currently goes into the Trust Fund, which is invested in T-Bills, and invest it in… T-Bills?! I bet you thought that “Ownership Society” meant owning corporate stocks or real estate or something, not… US Government debt.

And finally, back to the initial assumptions. What happens if you use the same economic assumptions that create the Social Security crisis in 40 years, but this time assume that people have the private accounts that the Bush Administration wants to implement? Surprise! Those investments under perform, for the same reasons the Social Security Trust Fund gets used up, and retirees end up living in poverty. Conversely, if you make assumptions that ensure that the private accounts perform well, the Social Security insolvency vanishes in a puff of economic prognostication.

So WHY, you ask? I have three hypotheses. It’s kind of fun to think these up, add ‘em to the comments if you like:
(1) Republicans WANT to kill Social Security, presumably replacing it with a faith-based retirement.
(2) As suggested above – buying young voters today using a crisis tomorrow as bait.
(3) It’s all just a big, colorful, noisy diversion. Not from Iraq; that’s even bigger and noisier, but from something else that they are slipping past us while we are all looking at the fireworks.
(4) Fees. It would be such a crime that all this was about fund management fees. The Social Security Trust Fund fees are currently 0.06% of assets. The Bush fund fees will be 0.3%. Not bad you say. But it’s just a bond fund. And 0.3% of a trillion dollars is 3 BILLION dollars a year. That’s a LOT of money to pay a guy to buy T-Bills.

For the rather scary details on the Bush plan: http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/02/06/BUG7FB6ESN1.DTL. Note especially the somewhat buried comments on the fees this fund will incur.
The warm and fuzzy official SSA FAQ site is: http://www.ssa.gov/qa.htm

Who Will Speak for You?

America loves a good war. We certainly have been involved in more than our fair share of them, and because of our isolation in North America we have really had to go out of our way to join, or start, a fight. Iraq is really notable only for the public incompetence of the people who started it: neither the motives (oil) or methods (lying) are new, or even all that uncommon. But this kind of war is safe: we pick on some little half-dead tin-hat dictatorship, beat them to a pulp and then install our own tin-hat dictator. The recent flirtation with the spreading voting (note: democracy is not the mere occurrence of voting, as the Soviets, who voted every couple of years (98% turnouts!) unanimously for the Communist Party for almost 70 years, can attest) smacks of the French mission to civilize the world a century ago… If it walks like an imperialist and talks like an imperialist… oh well, maybe it’ll be different this time.

But we love our wars. We love ‘em so much we even inflict them upon ourselves, and I don’t even mean the Civil War. We had a War on Poverty; we had a War on Communism, we still have (at least I haven’t heard that it was over – maybe we lost…) the War on Drugs. And now – drum roll please - the War on Terror. We all know what this is supposed to be: nail Bin Laden and the like. Well, we went to Afghanistan and did what we had to do. THAT was the War on Terror. Bin Laden is still loose, shame on us for subcontracting out the hit to his pals, but the WAR is over, and we won. Now I don’t expect that Al Qaida, or some other group of loonies, including the likes of Timothy McVeigh (remember THOSE terrorists?), will disappear. But the WAR, the organized national mission to eliminate Al Qaida and their safe haven in Afghanistan, is done. Maybe some mop-up with the Pakistani’s in the frontier regions, but apparently we were done enough to go wander off to Iraq.

Yet the War goes on, we are told. Evildoers lurk everywhere, just waiting to JUMP OUT and bite. The FBI and CIA need to be freed from decades of restraints. Total Information Awareness (now MATRIX) is needed to pick out suspicious activity in travel and credit card transactions. But what IS this war? What exactly, does “War on Terror” mean?

It’s a fishing expedition. Crime prevention taken to the extreme. Obviously nobody wants a repeat of 9/11. But the only way to prevent such things is to infiltrate the organizations that could potentially commit such acts. Maybe that work is being done by the CIA and others; we’ll never know. What I do know is that the Government is spending a lot of time, money and effort to collect information, ANY information, on everybody, in a search for “suspicious” activity. Last time I checked, the police needed a warrant, based on just case, to investigate me. Not any more. The aptly named MATRIX database (http://www.newsmax.com/archives/articles/2004/5/20/110717.shtml ) sifts through billions of commercial records of American citizens (not suspects, mind you, just citizens) looking for, well, evil, I guess. Terrorism must be like pornography: they’ll know it when they see it.

The problem with waging a war on a noun is that the enemy is undefined. The goals are undefined. The success criteria are undefined. When will the War on Terror be over? How will we know we have won, or lost, for that matter? Terrorism has been with us since the dawn of time. Like it or not, the distinction between terrorist and freedom fighter is in the eye of the beholder. We will never completely eliminate terrorism, although you can minimize it, like the Europeans did after the bloody 1970’s (remember THOSE terrorists?).

The prisoners in Guantanamo have been held for three years with no outside contact – not family, not lawyers, not officials of their own countries. As “enemy combatants”. They, and anyone else accused of being a terrorist, can be locked up without due process until the “War” is over. The war in Afghanistan, where most of them were captured, IS over. They should either be tried or released. But the War on Terror is not over. It will never be over.

I know what you are thinking: these are terrorists, they deserve what ever they get. Well, they may in fact be terrorists – I don’t know. But you don’t know either. And in the America that I live in; people accused of a crime, even when accused by the Government, get a fair and impartial trial. When did my country, the country of freedom and democracy, start locking people up in secret, torturing them, denying them even the most basic legal recourse?

The War on Terror is becoming the War on You and Me. The Government can’t tell who is or isn’t a terrorist any more than you or I. So they guess. And they go fishing. We are ALL suspects; potential terrorists. Guilty until proven innocent. Our Government is turning the powers given to them by you and me against us. They eliminate legal protections against domestic spying, against unlawful search and seizure, against unlawful detention. They send suspects to foreign countries to be tortured in secret. They create “no-fly” lists with tens of thousands of names that can’t be removed even when proven to be wrong. ( http://www.cnn.com/2004/LAW/04/06/no.fly.lawsuit/ ). They pay truckers to spy on you. They pay your neighbors to spy on you (http://www.nationalterroralert.com/readyguide/activity.htm ). Ever had a dispute with your neighbor? Are they assholes? Are they big enough assholes to send your name to the FBI? Think all identity theft is just about buying stereos on somebody else’s nickel? You can be innocent and still be a victim. Don’t think it cannot happen here; it has before. And a fear of terrorists cannot become a fear of freedom.

Americans have a wondrous, almost genetic, skepticism in all things Government. Unfortunately Americans have an equally wondrous ability to suspend that skepticism whenever the Government calls something a War. Well, a war on something undefined becomes a war on whatever the powerful define it to be. Ask the blacklisted “communists” from the 1950’s. Ask the Japanese Americans interned in the 1940’s. They say the price of freedom is eternal vigilance; and they are absolutely right. But that vigilance is to be applied to those who would rule us. You must not be apathetic. You must speak out. You cannot let the autocratic impulses of the powerful rule the day.

You’re not a terrorist. I’m sure you think you have nothing to fear from the Government. The problem is, it’s no longer what YOU think that counts.

First the Nazis came…First they came for the communists, and I did not speak out—because I was not a communist;Then they came for the socialists, and I did not speak out—because I was not a socialist;Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist;Then they came for the Jews, and I did not speak out—because I was not a Jew;Then they came for me—and there was no one left to speak out for me.

Pastor Martin Neimoller (1892 – 1984)
http://en.wikiquote.org/wiki/Martin_Niem%C3%B6ller