Social Security revisited

I wrote about Social Security (satirically, of course) in 2001. You can read the article here. It’s amazing how little about the debate has changed. Now, with another election coming up, the issue is being raised again, and George Bush is still flouting the same “plan” he gave us four years ago. The difference now, of course, is that he’s been president for four years, with the support of both houses of Congress, and he’s done nothing about it. Yet somehow Bush still creates the impression that he says what he believes. Take a look at today’s New York Times poll:

In addition to the perception of Mr. Kerry as a liberal, 60 percent said that he told people what he thought they wanted to hear, rather than what he believed. By contrast, 59 percent said Mr. Bush said what he believed, one of the biggest differences Mr. Bush has sought to draw with his opponent.

You can come up with a hundred different examples of Bush saying one thing and doing another, yet people still think there’s some conviction behind what he says. I won’t even get into the Iraq thing. So how are we to know whether Bush really backs this disastrous Social Security plan, or whether he’s just saying it to appease the reactionary/libertarian block? Maxspeak has a nice post on this topic where he analyzes the possible “real” Bush position on Social Security:

1. Bush has no plan for transitional finance of benefits and was just lying about intending to launch those private accounts.

2. Bush plans to cut Social Security benefits, in order to protect them.

3. Bush has a plan, or more likely several options, but declines to reveal them. Ergo, secret plan(s).

4. Bush thinks the revenue shortfall will be made up for through control of The Spice, once the Sleeper awakens. His mentat Karl Rove figured it out.

Though the Sci-Fi reference in Maxspeaks’ fourth point draws a complete blank for me, this looks to be Bush’s best chance for a viable Social Security plan. I don’t think Kerry’s “plan” of doing nothing until we’re really in trouble is much of a plan either, but at least it’s viable. Kerry, as a lifelong legislator, is well aware of the American penchant for having its cake, eating it, then buying another one on credit so they can have that one and eat it, too.

An honest assessment of the Social Security situation is that we pay way to much payroll tax, now. It’s the most regressive tax imaginable. The way to really make Social Security work for all Americans is to move back the retirement age and reduce the payroll tax. But that “honest” plan has less than a snowball’s chance in Sleeper-Spice World of happening.

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6 Responses to Social Security revisited

  1. ugg says:

    I think the only real hope for SS is to return it to its original status, that is it should be there to supplement retirement for the majority of people and provide a safety net for those in danger of spending the last years of their lives destitute.

    gw’s plan to privatize it would be a total and utter failure. Back in the early 80s there was a lot of interest in this and I agreed with it to a point. However, I’m now convinced that it wouldn’t achieve what it is meant to and in the end only inflate the pocketbooks of the rich at the expense of the poor.

    There should be a mandatory deduction from wages to support the indigent and the disabled, however, for everyone else there needs to be a quasi-public institution that will invest their contributions much like Fannie Mae exists for mortgages. My biggest gripe about the Social Security fund is that it is used to manipulate the indebtedness of the US Govt. This would eliminate that float much like the recent electronic transfer of checks means the elimination of the float for banking customers.

    As far as raising the minimum retirement age I’m all for it as long as it only applies to white collar jobs. I don’t think it is fair nor is it safe to have 75 year old heavy equipment operators, construction workers, maids, gardeners, etc. The only real supporters of a further increase in the retirement age are those who sit on their butts all day long. ;)

    One way or another massive changes are going to happen to Social Security, and there is no way at all that everyone is going to be happy with them.

  2. dave says:

    Ugg, you mage a good point about jobs with physical requirements. However, I think those cases are becoming more and more rare. If you have such a career, you probably need to be thinking about other options as you age. If your job causes you to become physically disabled and unable to work, Social Security would kick in at that point (the same way it does now).

    Also, by lowering the payroll tax, people could afford to save more for retirement. My biggest problem with Social Security is that it’s supplementing peoples’ early retirements at the expense of the lowest-wage earners. The elderly are the wealthiest segment of the population, and yet they cry for endless entitlements. It’s not fair to working people who are struggling to get by with barely liveable wages.

  3. ugg says:

    I make a living by sitting on my butt with a phone glued to my ear and have an education so would be able to find another job, hopefully anyway. Unfortunately, the majority of blue collar laborers don’t have my options. They are stuck in the jobs they have, IF they are able to keep them when they get older.

    I agree that early retirement is causing this country huge problems. Most of that early retirement can be blamed on short-sighted corporate cost cutting. The airline and automotive industries are excellent examples of this, by taking early retirement they are not paying into the system and receiving benefits way too early. This is part of the reason why payroll taxes are too high. Corporate America has been way too interested in the short term gains and not interested in the long term effects. Don’t blame it all on the government, it tends to be reactionary.

    Again, I think it is in the goverment’s best interests to mandate retirement savings through a nation-wide quasi-public system. If gw privatizes Social Security and we have a few more Enron/Global Crossing fiascos, you can be sure that we will return to the soup kitchens of the 30s. Mistakes are to be learned from, not repeated.

    I like your blog! I may not agree but it does make me think and that is always a good thing.

  4. dave says:

    First, thanks for the kind words. Always appreciated.

    In response to the substance of your post, Social Security kicks in whether or not you actually retire, so the fact that we’re spending so much on Social Security has little to do with the corporate phenomenon of early retirement, except that it encourages corporations to do so, because they know their workers can rely on Social Security. Personally I have no objections to someone retiring early; I just don’t want to pay for it.

  5. ugg says:

    Social Security isn’t the only issue here, there’s another govt. agency that guarantees pension funds. It is about to go bust because too many companies gave early retirement as a short term cost cutting measure. Failing pension funds have forced the govt. to bail out to the tune of billions, funds that went belly up because of private mismanagement. That in my mind is government assistance of the worst kind and I don’t want to pay for it either.

    I do agree though that Social Security shouldn’t necessarily kick in automatically but we are turning away from that allowing retirees to earn money while collecting SS. I have no problem when the retirees in question are doing so only to make ends meet but in the end it also ends up subsidizing those who don’t need the extra income.

    FDR set up Social Security, some say illegally, because so many elderly Americans were in dire straits. It’s easy to say what you don’t want to pay for but what would your conscience say if those impoverished elderly of FDR’s time were to show up daily on your doorstep for a handout?

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