Earlier I noted that in debating policy, you have to keep in mind that we are talking about what elected officials will be doing, and therefore...
you must look at their specific voting behaviors, the possible coalitions that can be built, and the likely influence of their constituencies on their votes (i.e. will an uproar from their constituencies cause them to change sides--which is pretty much always at the level of 0 possibility).
This has all been spurred on by the "Obama is creating a giant deficit" motif that conservatives have going. Something I hit on earlier, after the interview in the local paper about that local Obama smear group
Then I come across this quote on page 4 of chapter 5 of Thinking Points from the highly useful but now defunct Rockridge Institute:
For instance, the staunchest free-market proponents in Congress and the
administration didn’t bat an eye after 9/11 when they bailed out the airlines to the tune
of $15 billion on the basis that the airline industry is a vital part of the nation.2 They
send a large percentage of the federal budget year after year to private defense
companies, shifting public wealth to private owners. They spend tens of billions to
support the oil industry.3 They maintain price supports for agribusiness to keep profits
high and the price of food low.4 For generations, they have auctioned off or given public
resources like the airwaves and land, water, and oil rights to corporations for
development.
Then I started to think about the social security privatization effort pushed by conservatives in congress. They did so under the guise that social security is going broke... (and are still trying to make that case now). But as CBPP noted late last month in their paper Social Security Does Not Face a Near-Term “Reckoning”
In recent weeks, several analysts, journalists, and legislators have sounded an alarm about the effect of the current recession on Social Security's near-term prospects, which has fostered an impression that the program may face serious problems in the next few years. Fortunately, this is not the case.
The recession has affected the system's finances, and the next report of the Social Security Trustees — due in coming weeks — is expected to show some deterioration in the program's financial outlook. But Social Security faces no immediate threat. The program continues to run large surpluses and remains capable of paying scheduled benefits in full for the next three decades or so.
Then I start to think about someone like my Congressman Lynn Westmoreland in GA's 3rd who is touting how concerned he is about the Obama debt in his "100 Days of Obama equals 100 Years of Debt" press release recently.
Things to keep in mind about someone like Westmoreland. He wasn't too concerned about the Bush Tax Cuts. In fact he's known for how proactive he has been in underfunding our revenue sources and wants us to join the flat earth society, which at a 23% flat sales tax would further underfund our government (so much for deficit hawk status).
But anyways my point is about social security privatization and the fact that it increased the time line at which social security would need to be fixed. As the social security network pointed out...
Creating private accounts would make Social Security's financing problem worse, not better.
Social Security is funded by a flat tax of 12.4 percent of each worker's wage income, up to $90,000 in 2005, split evenly between employers and employees. About four out of five of those tax dollars go immediately to current beneficiaries, and the remaining dollar is used to purchase U.S. Treasury securities held in the system's trust funds. Beginning in 2018, well after the huge generation of baby boomers born between 1946 and 1964 begins to retire, a portion of general income tax revenues will be needed to pay interest and eventually principal on those bonds to fully finance benefits. A "crisis" is not forecast to arise until the program becomes entirely "pay as you go" again (as it was throughout its history before 1983) in either 2042 according to the trustees' forecast or 2052 according to the Congressional Budget Office. (By way of perspective, in 2052 the oldest surviving baby boomers will be 106 years old and the youngest will be 88.)
Diverting 2 or 4 percent of payroll to create private accounts as proposed by the President's Commission to Strengthen Social Security doesn't sound very radical, but it would shorten significantly the time until current benefit levels could only be sustained by raising taxes. In part, this is because funds now being set aside to build up the trust funds to provide for retiring baby boomers would be used instead to pay for the privatization accounts. The government would have to start borrowing from the private sector almost immediately to be able to meet commitments to retirees and near-retirees. As the figure below shows, the trust funds would be exhausted much sooner than the thirty-eight to forty-eight years projected if nothing is done. In such a short time frame, the investments in the personal accounts will not be nearly large enough to provide an adequate cushion. The upshot: a much larger share of today's workers would confront large benefit cuts, or tax increases, than if no changes were implemented.
So here we have an example of saying one thing... Social Security is going broke. And then doing something that would make it even worse--privatization.
Also its important to note that a "free market" version of social security is, well, none at all.
"Let the market take care of it" means exactly that. Don't involve government is their claim, but then they want to prop up private profits if we are going to "have to do it". When I say "have to do it" i'm speaking about the wishes and desires of those pesky people called voters that in a democracy one must "pay attention to" and "budget accordingly" for.
These are things that conservatives don't want to do. They don't like government messing with private profits, they don't want to tell people how unabashedly disdainful they are of Democracy and the peoples will, so they have to get clever in how they work.
So I just wanted to think outloud about this with a real world example... Lynn Westmoreland and Social Security is a great one actually. His support of the 23% salestax is an even better one come to think about it.
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