A year ago, only the most optimistic conservatives did more than dream wistfully about turning Social Security into a capital accumulation program. “Privatization” was a long-term ideal, not a short-term, practical political goal.
Now, all of a sudden, adding private accounts to Social Security in some fashion or another – it hardly seems to matter how – is being treated as urgent business. We are warned that the President’s second term will be a failure unless something can be pushed through Congress prestissimo, and many are the criticisms leveled at the Administration’s “tactical blunders”, which, it is widely bemoaned, have already doomed the effort.
Shaking my head, I wonder whether folks aren’t confusing Social Security with Iran. “Faster, please” is the right cry for one situation, but not for both.
The longer that Social Security reform is put off, the harder the task will be, because demographics are ineluctably wearing down the program’s financial foundation. Still, the deterioration is slow and steady. The window for reform is a few years wide, not a few months. It will be better to construct a sound replacement in 2007 than a lame-brained version in 2005.
A virtue of Checks and Balances, remember, is that the nation can’t make a major directional change overnight at the whim of the majority at the moment. A corollary is that we are given time for careful consideration of measures like revamping the way in which most citizens provide for retirement. We don’t have to – in fact, we can’t – seize on the first idea that comes along, put it onto the statute books and move on the next problem in line.
The Administration’s proposal, in its current form, doesn’t cope fully with Social Security’s long-range imbalance. As a transition, it has good points, but where do we go next? Bush 1.0 leaves the next generation of retirees primarily dependent on the same inter-generational transfer concept as the present one. That is better than exclusively dependent; it isn’t a permanent fix.
Elsewhere I’ve offered my own idea of what the system ultimately should look like. There are doubtless other, perhaps better ways to reach the same objective, but so far very few are talking about what will come after the transition phase, or even showing awareness that the transition ought not to last forever.
Hence, I’m not upset by Democratic intransigence or the unlikelihood of overcoming a filibuster this year. Let the progressive reactionaries play a useful role by delaying action until the rest of us know what we really want.
So far as tactics go, complaints about the President’s performance are meaningless. Is there anything that he could have done that wouldn’t have run into the same left-wing insistence on the sanctity of the status quo or that would have stopped the media from echoing and reinforcing the do-nothing line? Not bloody likely.
Actually, the debate has been developing in a way that will in time prove highly advantageous to the pro-reform forces. Confident that their media allies will outshout the Right, leftists are giving hostages to fortune in the form of arguments whose absurdity will become more and more evident as the public becomes more keenly aware of how Social Security operates. As the Left’s fictions are debunked, its spokesmen will lose credibility. It’s amusing to see former economist Paul Krugman in the position of a physicist basing arguments on the properties of the luminiferous ether. The Social Security trust fund is just as imaginary. It serves a useful accounting function, but, as the date approaches when it must be turned into cash, anyone with a grain of sense will realize that it doesn’t postpone the need to deal with Social Security’s finances. In about 15 years, not the 50 that anti-reformers like to cite, promised benefits will have to be paid by increasing taxes, cutting benefits, cutting other government spending or taking on federal debt, just as if the trust fund didn’t exist.
Similarly, it will become increasingly clear that the default liberal remedy of a quick tax hike won’t improve the system’s future financial condition. Taxes collected today are spent today. They give future retirees no assurance that their benefits won’t be slashed and do nothing to ease the government’s future fiscal dilemma.
As the facts sink in, the Krugmans will either backtrack (denying furiously that they are doing any such thing) or migrate to the oddball fringe of politics, out in the wilds with the anti-fluoridationists and single taxers. Liberals whose brains aren’t addled by Bush hatred will, I foresee, figure out that there is nothing especially non-liberal in a program that requires individuals to save money during their working years. (The genuinely right-wing position is that the government should let people save or not as they wish.) A more supple Left than we suffer nowadays would already be criticizing the Bush proposals as timid and insufficient. Sooner than seems plausible, that may well become the mainstream liberal approach.
All in all, then, the Great Social Security Debate is proceeding quite satisfactorily. The best counsel for the present is patience. Panic and recriminations are the only things that reformers have to fear.
Mayflower Compact Coalition (Wangstas Fo' Shizzle My Nizzle)...
RNC Chairman Ken Mehlman today attended the unveiling of the 21st Century Mayflower Compact at the Mayflower Hotel in Washington D.C.. The nine-point agenda includes support for school choice and private social security accounts. The Coalition is advised in part by former House Speaker Newt Gingrich’s consulting firm.
African Americans often reach different and surprising conclusions on social issues that the casual (Caucasian) observer just won’t understand. For example, Black folks still want to see Michael Jackson find happiness. His high-pitched voice and soulful delivery is the soundtrack of generations and has a permanent place in the Black community’s psyche, no matter the plastic surgery, skin bleaching and alleged child molestation charges. Possibly, it’s the “he’s still Black” phenomenon that African Americans well understand. They want Michael Jackson’s name cleared. In short, they want him to make good music and just leave the damn kids alone.
Likewise, Blacks see Old Age Survivors and Disability Insurance Program, popularly known as Social Security, as an entitlement forced into place during a period when “bigots” wanted to run things. And against the odds, a well respected Franklin Roosevelt was able to established needed protection for the public from the economic fears of old age, sickness, accident, and unemployment. As its original name suggest, African Americans believe the insurance program was created to do much more than provide an old age benefit.
Wangstas (whites and uh oh oreos) are extremely white persons who attempt to be “gangsta” (cool with Black people) in order to “pimp out.” They dress, speak and act for all practical purposes as a African Americans aside from the fact that they are not. Normally they are hated by the fam for being fake.
The White House and its oreos who support overhauling Social Security have launched a highly targeted campaign to convince Black people that President Bush’s plan to create private investment accounts will have special benefits for them. The ghetto fab element about the GOP message to African Americans: “The shorter life expectancy of Black males means Social Security in its current form is not a favorable deal.”
Proponents of privatizing social security who claim no group has as much at stake in the debate over reform as African Americans, in fact, are right. Black families of workers who become disabled or die are much more likely than their Caucasian counterparts to be dependent on the grip available from disability and/or survivor benefits. Blacks make up 12 percent of the U.S. population, but 23 percent of African American children receive survivor benefits, and 18 percent of the community are disability beneficiaries.
Although the wangstas are making a special effort to appeal to the strizzeet with the 21st Century Mayflower Compact, the “lower life expectancies” illusion appears to reached every one except the African American senior. Their attempt to focus on a very narrow element of the system (current program based on longevity is unfair) is misplaced and doesn’t gain cool points. What the oreos fail to realize is their attempt to be “down” for da brothas... is just “gosh-darn” obnoxious (using their vernacular) and another clue identifying the new face of segregation.
“A’ight?”
Social Security is an insurance program that protects workers and their families against the income loss that occurs when a worker retires, becomes disabled, or dies. All workers will eventually either grow too old to compete in the labor market, become disabled, or die. President Roosevelt created the program to insure all workers and their families against these universal risks, while spreading the costs and benefits of that insurance protection among the entire workforce.
It is a “pay as you go” program, which means the Federal Insurance Contribution Act (FICA) payroll tax paid by today’s workers are not set aside to pay their own benefits down the road, but rather go to pay the benefits of current recipients. The tax isn’t progressive. The low-wage workers receive a greater percentage of pre-retirement earnings from the program than higher-wage workers. And, in the 1980's, Congress passed reforms to raise extra tax revenues above and beyond the current need and set up a trust fund to hold a reserve.
As was the case when the program was established, higher-wage workers still oppose the social nature of the program. They argue low rates of return as a reason to switch from the current “pay-as-you-go” system to one in which individual workers claim their own contribution and decide where and how to invest it. In short, rather than sharing the risk across the entire workforce to ensure that all workers and their families are protected from old age, disability, and death, higher-wage workers want to enable opportunity to reap gains from private investment without having to help protect lower-wage workers from their disproportionate risks.
Allowing high-wage workers (who are more likely to live long enough to retire) opportunity to opt out of the general risk pool and devote all their money to retirement without having to cover the risk of those who may become disabled or die, is da fo’ shizzle identifying the republican party’s desire to return to a segregated society.
Roosevelt’s benefit formula currently in place intentionally helps low income earners. Lifetime earnings directly factor into the formula. And, thirty-five percent of Black workers born between 1931 and 1940 had lifetime earnings that fell into the bottom fifth of earnings received by workers born in these years. African Americans’ median earnings (working-age in jobs covered by Social Security in 2002) were about $21,200, compared to $28,400 for all working-age people.
HNIC, president Bush, does acknowledge the difficulty Blacks will have in accumulating enough savings in their individual accounts to provide for a secure retirement once the progressivity of the current system is eliminated. However, he has only suggested allowing lower-income workers to place higher portions of their income into the uncertainties of investment accounts (creating even more risk).
Yes! Private accounts would be passed on to children or other heirs. But, what the HNIC and his oreos doesn’t explain is lower-income workers would be forced to buy an annuity large enough (when combined with their traditional Social Security benefit) to ensure that they would at least have a poverty level income for retirement.
Yo’ playa... da new private social security account fizzle sucks!
Me: Nothing like a few racial insults to make the debate more rational. The core of the commenter's argument is fallacious: The Bush Administration has not proposed eliminating the present disability insurance program. Moreover, disabled workers who have accumulated private accounts will have those funds available to support themselves and to pass on to their heirs.
The current system does give low income earners a higher return on their notional investments, but that return remains unspectacular, in the range of three percent per annum, assuming standard life expectancy. For those who die prematurely, as poorer people tend to do, the return is lower or negative. At present, they leave no estates. Personal accounts would change that.
Posted by: kstreetfriend | Wednesday, March 23, 2005 at 12:28 AM