...Social Security’s attackers claim that they’re concerned about the program’s financial future. But their math doesn’t add up, and their hostility isn’t really about dollars and cents. Instead, it’s about ideology and posturing. And underneath it all is ignorance of or indifference to the realities of life for many Americans.
About that math: Legally, Social Security has its own, dedicated funding, via the payroll tax (“FICA” on your pay statement). But it’s also part of the broader federal budget. This dual accounting means that there are two ways Social Security could face financial problems. First, that dedicated funding could prove inadequate, forcing the program either to cut benefits or to turn to Congress for aid. Second, Social Security costs could prove unsupportable for the federal budget as a whole.
But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.
Meanwhile, an aging population will eventually (over the course of the next 20 years) cause the cost of paying Social Security benefits to rise from its current 4.8 percent of G.D.P. to about 6 percent of G.D.P. To give you some perspective, that’s a significantly smaller increase than the rise in defense spending since 2001, which Washington certainly didn’t consider a crisis, or even a reason to rethink some of the Bush tax cuts.
So where do claims of crisis come from? To a large extent they rely on bad-faith accounting. In particular, they rely on an exercise in three-card monte in which the surpluses Social Security has been running for a quarter-century don’t count — because hey, the program doesn’t have any independent existence; it’s just part of the general federal budget — while future Social Security deficits are unacceptable — because hey, the program has to stand on its own.
It would be easy to dismiss this bait-and-switch as obvious nonsense, except for one thing: many influential people — including Alan Simpson, co-chairman of the president’s deficit commission — are peddling this nonsense.
And having invented a crisis, what do Social Security’s attackers want to do? They don’t propose cutting benefits to current retirees; invariably the plan is, instead, to cut benefits many years in the future. So think about it this way: In order to avoid the possibility of future benefit cuts, we must cut future benefits. O.K.
What’s really going on here? Conservatives hate Social Security for ideological reasons: its success undermines their claim that government is always the problem, never the solution. But they receive crucial support from Washington insiders, for whom a declared willingness to cut Social Security has long served as a badge of fiscal seriousness, never mind the arithmetic.
And neither wing of the anti-Social-Security coalition seems to know or care about the hardship its favorite proposals would cause.
The currently fashionable idea of raising the retirement age even more than it will rise under existing law — it has already gone from 65 to 66, it’s scheduled to rise to 67, but now some are proposing that it go to 70 — is usually justified with assertions that life expectancy has risen, so people can easily work later into life. But that’s only true for affluent, white-collar workers — the people who need Social Security least.
I’m not just talking about the fact that it’s a lot easier to imagine working until you’re 70 if you have a comfortable office job than if you’re engaged in manual labor. America is becoming an increasingly unequal society — and the growing disparities extend to matters of life and death. Life expectancy at age 65 has risen a lot at the top of the income distribution, but much less for lower-income workers. And remember, the retirement age is already scheduled to rise under current law.
So let’s beat back this unnecessary, unfair and — let’s not mince words — cruel attack on working Americans. Big cuts in Social Security should not be on the table.
The Krug acts like he's really puzzled by this. After all, without well-paid and healthy help, aspiring middle class savants of the $ystem like him suffer. But don't get me wrong: the Krug is well-intentioned and gives a good example of what the $ystem could deliver.
If it had a mind to do so.
I think the winner of the Norse Dynamite Prize needs to sit down with Joe Bageant to really understand what's going on with the Masters of the Universe:
...the truth is that when we are looking at the political elite, we are looking at the dancing monkey, not the organ grinder who calls the tune. Washington's political class is about as upwardly removed from ordinary citizens as the ruling class is from the political class. For instance, they do not work for a living in the normal sense of a job, but rather obtain their income from abstractions such as investment and law, neither of which ever gave anybody a hernia or carpal tunnel. By comparison, the ruling class does not work at all.
Moneywise, Washington's political class is richer than the working class by the same orders of magnitude as the ruling class is richer than the political class. This gives the political class something to aim for. To that end, they have adopted the ruling elite's behaviors, tastes and lifestyles, with an eye on becoming members. Moreover, it is a molting process that begins with the right university and connections, and culminates in flying off to Washington with the rest of your generation's most privileged and ambitious young moths.
They make enough dough to at least fake it until they make it. Fifty-one of the 100 members of the US Senate are at the very least millionaires -- probably more than that, since multi-million million dollar residences and estates are exempt from the official tally. For instance in the House, Nancy Pelosi's net worth is either $13 million, or $92 million, depending upon who is counting. Why they bother to shave such large numbers is a mystery. Thirteen million, ninety two million, the difference is not gonna change our opinion of Nancy. Our opinion being that the broad is loaded. More than loaded. The comparatively poor members of Congress, like Barney Frank, are near millionaires. His publicly declared net worth is $976,000. For the life of me, I cannot see how they get by.
Along with the habits, the political class adopts the ruling class's social canon and presumptions, especially the one most necessary for acceptance: That the public has the collective intelligence of a chicken. OK, so it may be very hard to disprove that at the moment, but we must maintain at least some egalitarian semblance here. Anyway, as a group, the political elites think, look and act alike, and act toward their own interests. That makes them a class.
This political class stands between all of us down here and the tiny minority in the ruling class waaaaaay up there, wherever the hell up there is. No use to squint. You can't see it from where we are. That comes in mighty handy in denying the existence of a ruling class.
On the other hand, you do not need to see an egg-sucking dog in action to know what to expect -- or not to expect. The track record of the political class is an open book. As the layer of millionaires buffering the elites who pay for their campaigns, they've done their jobs. They approved the Bush administration's massive tax cut for the rich. They dropped the per-child tax credit for families with incomes less than $20,000. They "reformed" prescription drugs right out of Medicare. They reformed health care into hundreds of billions of increased profits for the insurance industry.
However, the American political class' finest moment came in September 2008 when the financial greed machinery of American investment houses went tits up. The Republican and Democratic parties, major corporations, and manufacturers of US opinion came together in one of the greater bipartisan efforts in modern US history. There was nothing to do, they all agreed, but buy up $700 billion in "toxic asset" investments. "Otherwise," they prophesied, the world would end. Meaning that the ongoing national Ponzi scheme they have always sold to the American people as the US economy, would finally crash.
And in case there were any skeptics out there among the unwashed, the public was reminded just how much they stood to lose -- which was everything. Deep in the boiler room, the Goldman Sachs black bag crew had wired up the "economy" with enough explosive "financial instruments" to take out every working mook's home, or retirement savings, which the medical industry was already sucking up at an alarming rate. Something had to be done before the health care industry got it all, and repo the family ride.
Yessiree, it was gonna be a "systemic collapse," by god, and if you needed proof, just look at the way both George Bush and Barack Obama agreed that some American corporations were too big to let sink, therefore it was time for the public to start bailing out the boat. Meanwhile, the royal economists were unanimous in that this "rescue" was going to require another 10 trillion bucks somewhere down the pike -- a very short pike. So it must all be damned serious and we gotta do this thing. Right folks?
In an unusual display of common sense, the American public said "Bullshit," by margins of three or four to one, depending upon region. That did not bother political and economic elites much. What the fuck do the proles know anyway?
Then, in midstream, the political and economic owning classes switched horses, after realizing there was more gravy for the kingpins in buying up banks and big industries. It was unconstitutional, but what the hell, that's what Supreme Courts are for. The proles mumbled and peered into their TV sets for explanations that never came...
The Krug knows all this, of course.
But if he just flat out said it: "you schmucks are going after Social Security because you need someone to piss on, and being on top just hasn't been the same since the French Revolution", they might think: "Time to remedy that! Don't even let them know we have the cake."