Social Security Pitstop
Forget professional pessimist Robert Novak; as an "insider" he's too close to the trees to see the forest. Wes Vernon of Newsmax has a much better grasp of the big SS reform picture:
You're hearing a lot of propaganda these days about how President Bush and the Republicans want to rob senior citizens of their worry-free retirement by killing Social Security, which would throw Grandma and Grandpa out into the snow, destitute and bereft of food and shelter.
Senate Minority Leader Harry Reid says proposals to create personal savings accounts for younger people so that they can have a better nest egg for themselves and their heirs when they retire is a plot to enrich "fat cats on Wall Street."
Since the American Association of Retired Persons (AARP) is taking a leading role in the campaign to defeat the effort to avoid the train wreck that will surely occur when the Social Security system goes broke, we should get a few things straight – both as to what the AARP is and as to the real motives of the liberal establishment's fanatical effort to resist any and all change to the system.
First of all, everyone born before 1950 will get exactly the benefits promised. Nothing will change for them.
Secondly, in 2008, the first baby boomers will begin to retire. In 2018, the program will begin paying out more than it takes in. By 2042, the program goes bust. Either we do something now, or we face higher taxes, massive new borrowing, or sudden drastic cuts in Social Security benefits. Perhaps a combination of the three.
Every year we delay reform of the system costs $600 billion. Ultimately, we will be stuck with an estimated $10.4 trillion.
That is something to think about the next time you hear Harry Reid, Ted Kennedy or Barbara Boxer assure you that everything is just fine and anyone who ventures the slightest hint that there should be any changes harbors some kind of sadistic desire to shortchange seniors.
(Then the next day, some of them turn around and say something that amounts to "But if there is a crisis or problem, the president must surrender the very centerpiece of his plan before we will negotiate with him." With them, it's now you see it, now you don't. Sunday, it's not a crisis. Monday it is, but don't you try to do anything substantive about it until you've crawled on your knees to the losers of last November's election and beg for their cooperation.)
What would motivate anyone to begrudge younger workers the option of putting aside a part of their Social Security taxes for private savings accounts? The answer, in some cases, lies in ignorance. As the president takes to the road to inform people about his program, he could place more emphasis on the ownership society that Social Security reform would move toward.
The best line would be "Look, this is your money. You worked for it. It's yours. You have a right to invest it in a carefully regulated private account, if you choose to do that, so you can gain more money in retirement and leave it to your kids when you're gone. The government won't get its hands on it. It's yours."
But the politicians and their allies who are pouring money into the fear and hysteria campaign against private savings accounts know exactly what they are doing. They don't want future retirees to have control of their money.
Why? Because they want it. They want future retirees to be more dependent on the "fat cats" in Washington for their security. That's how they intend to control the populace. They figure the more people who depend on big government, the more likely it is that voters will empower big-government politicians. It's that simple. It's not rocket science.
That is why they've mounted a multimillion-dollar campaign to defeat the idea of private accounts. They're afraid. They fear you. They shake in their boots at the very thought of an independent electorate that doesn't have to come begging to them, hat in hand.
That would end their grip on power. That would bring their political welfare state gravy train to a halt. The party would be over. And of course, they simply can't have that.
The AARP is buying full-page ads all over the country trashing the president's effort to let you keep more of your retirement income. Therefore, because AARP has seen fit to lead this negative charge, its leaders have opened the door to scrutiny of their methods and motivations.
One of the most comprehensive exposes of AARP is to be found in Dale Van Atta's 1998 book, "Trust Betrayed: Inside the AARP."
Among its many findings are the following:
-The AARP always favors tax increases.
-When the AARP chooses between the interests of seniors and big government, big government wins every time.
-The AARP, supposedly riding the white horse to save senior citizens, actually discriminates against them.
-The AARP spent more than twice as much money on its posh headquarters as it spent on programs assisting the elderly.
-Those "low-cost" deals at the AARP pharmacy are often not so "low cost." More seniors are finding better deals at local pharmacies.
We will return to these and other points in Van Atta's book in the future.
Meanwhile, the current (March-April 2005) issue of the AARP magazine indulges in some highly disingenuous doubletalk.
The article creates a straw man and then knocks him down.
It heaps ridicule on the statement that "Social Security is broke." Actually, no one has said Social Security is "broke" now. What the president has said is that it will be broke in the future unless a serious effort is made to reform it.
The AARP magazine writer admits that by 2018, the fund starts paying out more than it takes in, and that in 2042, just as the president says, "the principal will be exhausted." But not to worry – the system "will still bring in enough revenue from taxes to pay nearly 75% of benefit amounts." The unspoken implication is that taxes will have to be raised to cover the other 25%.
And that's AARP "optimism." Raise taxes; that will solve everything. That is a road we have traveled before, much to our regret. Higher taxes mean a downturn in the economy, which means fewer jobs and higher unemployment, which means less revenue raised.
This is the same AARP that "saved seniors" by backing President Clinton's plan to impose taxes on Social Security in 1993. Never mind that these people in their productive years had already paid taxes through the nose to keep the system afloat. Now they are socked again because they get back a part (a small part in most cases) of what they put into their nest egg. It amounts to a double tax on the same money.
Private accounts would give seniors something of their own – beyond what an IOU from the government purportedly promises.
The AARP soothsayers assure us we don't need to address the problem now. But by dealing with it now, there is time for younger workers to build up their accounts, which would earn a higher rate of return than is promised in the current Social Security system.
Ah! But that would take money away from the Washington gravy train. Can't have that, can we?
But we will.
Eleven years ago I predicted at this time of the year that the Clinton health care pusch would go down in flames. And I was right.
So here's another prognostication: Social Security reform, including private accounts, will pass this year.
Bank on it.
And remember where you read it first. My trackbacker needs the traffic.
You're hearing a lot of propaganda these days about how President Bush and the Republicans want to rob senior citizens of their worry-free retirement by killing Social Security, which would throw Grandma and Grandpa out into the snow, destitute and bereft of food and shelter.
Senate Minority Leader Harry Reid says proposals to create personal savings accounts for younger people so that they can have a better nest egg for themselves and their heirs when they retire is a plot to enrich "fat cats on Wall Street."
Since the American Association of Retired Persons (AARP) is taking a leading role in the campaign to defeat the effort to avoid the train wreck that will surely occur when the Social Security system goes broke, we should get a few things straight – both as to what the AARP is and as to the real motives of the liberal establishment's fanatical effort to resist any and all change to the system.
First of all, everyone born before 1950 will get exactly the benefits promised. Nothing will change for them.
Secondly, in 2008, the first baby boomers will begin to retire. In 2018, the program will begin paying out more than it takes in. By 2042, the program goes bust. Either we do something now, or we face higher taxes, massive new borrowing, or sudden drastic cuts in Social Security benefits. Perhaps a combination of the three.
Every year we delay reform of the system costs $600 billion. Ultimately, we will be stuck with an estimated $10.4 trillion.
That is something to think about the next time you hear Harry Reid, Ted Kennedy or Barbara Boxer assure you that everything is just fine and anyone who ventures the slightest hint that there should be any changes harbors some kind of sadistic desire to shortchange seniors.
(Then the next day, some of them turn around and say something that amounts to "But if there is a crisis or problem, the president must surrender the very centerpiece of his plan before we will negotiate with him." With them, it's now you see it, now you don't. Sunday, it's not a crisis. Monday it is, but don't you try to do anything substantive about it until you've crawled on your knees to the losers of last November's election and beg for their cooperation.)
What would motivate anyone to begrudge younger workers the option of putting aside a part of their Social Security taxes for private savings accounts? The answer, in some cases, lies in ignorance. As the president takes to the road to inform people about his program, he could place more emphasis on the ownership society that Social Security reform would move toward.
The best line would be "Look, this is your money. You worked for it. It's yours. You have a right to invest it in a carefully regulated private account, if you choose to do that, so you can gain more money in retirement and leave it to your kids when you're gone. The government won't get its hands on it. It's yours."
But the politicians and their allies who are pouring money into the fear and hysteria campaign against private savings accounts know exactly what they are doing. They don't want future retirees to have control of their money.
Why? Because they want it. They want future retirees to be more dependent on the "fat cats" in Washington for their security. That's how they intend to control the populace. They figure the more people who depend on big government, the more likely it is that voters will empower big-government politicians. It's that simple. It's not rocket science.
That is why they've mounted a multimillion-dollar campaign to defeat the idea of private accounts. They're afraid. They fear you. They shake in their boots at the very thought of an independent electorate that doesn't have to come begging to them, hat in hand.
That would end their grip on power. That would bring their political welfare state gravy train to a halt. The party would be over. And of course, they simply can't have that.
The AARP is buying full-page ads all over the country trashing the president's effort to let you keep more of your retirement income. Therefore, because AARP has seen fit to lead this negative charge, its leaders have opened the door to scrutiny of their methods and motivations.
One of the most comprehensive exposes of AARP is to be found in Dale Van Atta's 1998 book, "Trust Betrayed: Inside the AARP."
Among its many findings are the following:
-The AARP always favors tax increases.
-When the AARP chooses between the interests of seniors and big government, big government wins every time.
-The AARP, supposedly riding the white horse to save senior citizens, actually discriminates against them.
-The AARP spent more than twice as much money on its posh headquarters as it spent on programs assisting the elderly.
-Those "low-cost" deals at the AARP pharmacy are often not so "low cost." More seniors are finding better deals at local pharmacies.
We will return to these and other points in Van Atta's book in the future.
Meanwhile, the current (March-April 2005) issue of the AARP magazine indulges in some highly disingenuous doubletalk.
The article creates a straw man and then knocks him down.
It heaps ridicule on the statement that "Social Security is broke." Actually, no one has said Social Security is "broke" now. What the president has said is that it will be broke in the future unless a serious effort is made to reform it.
The AARP magazine writer admits that by 2018, the fund starts paying out more than it takes in, and that in 2042, just as the president says, "the principal will be exhausted." But not to worry – the system "will still bring in enough revenue from taxes to pay nearly 75% of benefit amounts." The unspoken implication is that taxes will have to be raised to cover the other 25%.
And that's AARP "optimism." Raise taxes; that will solve everything. That is a road we have traveled before, much to our regret. Higher taxes mean a downturn in the economy, which means fewer jobs and higher unemployment, which means less revenue raised.
This is the same AARP that "saved seniors" by backing President Clinton's plan to impose taxes on Social Security in 1993. Never mind that these people in their productive years had already paid taxes through the nose to keep the system afloat. Now they are socked again because they get back a part (a small part in most cases) of what they put into their nest egg. It amounts to a double tax on the same money.
Private accounts would give seniors something of their own – beyond what an IOU from the government purportedly promises.
The AARP soothsayers assure us we don't need to address the problem now. But by dealing with it now, there is time for younger workers to build up their accounts, which would earn a higher rate of return than is promised in the current Social Security system.
Ah! But that would take money away from the Washington gravy train. Can't have that, can we?
But we will.
Eleven years ago I predicted at this time of the year that the Clinton health care pusch would go down in flames. And I was right.
So here's another prognostication: Social Security reform, including private accounts, will pass this year.
Bank on it.
And remember where you read it first. My trackbacker needs the traffic.
posted by JASmius at 5:56 PM
<<< Home