Social Security plea from moveon.org

[winterbadger]

I think this has some shading/spin of its own, but, FWIW:

George Bush (and some Republican leaders) have made phasing out Social Security through privatization and massive benefit cuts their top priority for 2005. Members of Congress will be choosing sides over the next couple of weeks.

We need to make sure they choose those sides in accordance with your thinking now before a massive election-style campaign by George Bush and the Wall Street interests gets to them with what might be a $100 million TV ad campaign.

MoveOn.org is trying to gather at least 200,000 signatures to present to lawmakers when they return after the inauguration.

You can sign the petition now at: http://www.moveon.org/socialsecurity/

Social Security may be a complicated issue, but the basics are really pretty simple. See a fact-sheet at: http://www.moveon.org/socialsecurity/facts.html

Two points I strongly agree with:

George Bush's Social Security crisis-talk is an effort to create a specter of doom -- just like the weapons of mass destruction claim in Iraq.

There's a Social Security crisis several decades from now IF WE DO NOTHING. On the other hand, Social Security funds have been used to pay general government expenses for decades. General fund taxes could be used to pay for the SSA if Congress decided to do that. It's about time to stop pretending there's a "lockbox" or a "special account" or that my Social Security funds in some way get saved to pay for my retirement --THEY AREN'T! Let's make SSA a federal entitlement program like any other, guarantee a basic level of income for all of America's older citizens. Even, *gasp* means-test it, so that Grandma Smith, who has $5 million in stocks and bonds isn't *also* drawing a Social Security check the same as Uncle Jones, who has no union or government pension and has to, well *live* on his Social Security check.

Privatization means gambling with your retirement security.

For sure. Right now, those funds are nominally invested in US government bonds, but in practical terms the commitment to provide Social Security payments to everyone in the appropriate age bracket means that the USG *will* be making those payments. Put that money in the stock market and maybe big Wall Street firms will make money off it and maybe they won't (I'm dubious about that claim), but it *does* expose that moeny to the vagaries of the market. And a downturn that would mean former President GW Bush had to eat lobster 4 nights a week instead of 7 could have wiped out the "savings" of someone whose Social Security savings were at the mercy of the stock market.

Comments

Retirement Income

[mazzie.livejournal.com]

I worked at a non-profit agency for a year that deals solely in retirement benefits. Before (and, honestly, during) that time, talk of pensions, 401(k)s, and Social Security would make my eyes glaze over. But I did learn something.
Retirement income can be broken down (in a broad way) into four types:

Personal savings
Defined contribution retirement plans
Defined benefit retirement plans
Social Security

Personal savings is probably the most reliable and the most elusive. Realistically, Joe and Jane Average, who are too busy working paycheck to paycheck to notice the current economic upswing (as claimed by the administration), aren't likely to have the flexibility to put a substantial amount of money away for the long term. Especially with decreasing medical coverage and increasing medical costs, the increased tax burden on the lower classes, and the skyrocketing costs of higher education.

Defined contribution retirement plans are 401(k), 403(b), Employee Stock Ownership Programs (ESOPs), and any retirement plan that has a set contribution with no guarantee (although some good predictors) as to what the employee will have in terms of actual cash money upon retirement. Employees of Enron and Worldcom are examples of the worst case scenario when it comes to defined contribution plans. They invested all their retirement money in their companies while being lied to by the CEOs, CFOs, and other top brass. They lost everything - their jobs, their savings, their retirement security.

Defined benefit retirement plans are my personal favorite and increasingly less common in today's environment where employees are much, much more transient. These are traditional pension plans wherein the company says of an employee works for them for X years and retires at age Y, they will receive Z dollars a month upon retiring (and the employee can choose to have a lower monthly annuity so that her spouse continues to receive monies if she outlives him). Defined benefit plans are guaranteed by the Pension Benefit Guarantee Corporation (PBGC), to which the company pays a fee to secure the plans in the event that the company goes under. The employees are still paid their retirement. Unfortunately, the PBGC has been so over-burdened by companies with defined benefit plans going out of business (steel manufacturers, most notably) that they are in serious danger, themselves, of going bankrupt.

Finally, there is Social Security. The only guaranteed plan that doesn't rely on individual-driven contribution (they take it automatically), is not subject to market fluctuations or upper-management corruption, and is the sole source of retirement income for many, many hardworking Americans who live paycheck to paycheck. It's not a windfall or a source of great, indulgent riches for anyone. But for some, it's the only income they have. Gambling with this money by putting it in the market or asking people who don't know a dividend from a prime rate is just begging to thrust the elderly into deeper poverty in the midst of an already crumbling retirement income system.

[robbysmom.livejournal.com]

yes, the numbers are well spelled out in _Social Security: The Phony Crisis, by Dean Baker and Mark Wesibrot (University of Chicago, 1999). And Baker is quoted recently as saying that not even the current deficits change the fact that there is no crisis.

Also interesting is to look at what has happened with Britain's social security privitization, according to this commentary in Business Week.
http://www.businessweek.com/magazine/content/05_04/b3917015_mz001.htm