Social Security Breakdown

If you're anything like me, you've probably suffered a breakdown of sorts in trying to get a grip on just what the hell's going on in regards to all of this Social Security mumbo jumbo being spat out by the bloviating automatons of the pundit class, the sundry politicians, and those crazy trailblazers of the blogosphere. When you hear the blowhards use improvised-yet-somehow-now-part-of-the-lexicon (I.Y.S.N.P.O.T.L.) words such as "clawback," you, like me, probably resolve to leave the tonic out of your next vodka tonic. But such is the world in which we live, and as your ever-suffering host to this blog, I, the caption jockey, will attempt to break down and deconstruct at least some of what this caterwauling is all about.

This latest episode in "Social Security Reform," of course, all started with Bush's "massive" and "unprecedented" electoral victory in November. Well, now that the inauguration is over and the die, as it were, has been cast, let's see just what it is that our plain-spoken president is actually proposing (via Digby):

Because the -- all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those -- changing those with personal accounts, the idea is to get what has been promised more likely to be -- or closer delivered to what has been promised.

Does that make any sense to you? It's kind of muddled. Look, there's a series of things that cause the -- like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate -- the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those -- if that growth is affected, it will help on the red.

Okay, better? I'll keep working on it.

That was President Bush last Friday. Methinks the prez better get himself wired again.

There have been several leftish bloggers that have been covering this story quite doggedly, Josh Marshall most notably. But for an easy-to-understand overview, I think this post by Publius is the best I've seen. For a slightly more complex synopsis, try this post by Matthew Yglesias.

Before getting into many of the details of the "Bush Plan" (actually, I won't be getting into many of the details because I don't understand most of the details), I think it's prudent to at least cursorily step back through history and look at some of what was going on when Social Security first came to be. Here is what Wikipedia says:

A limited form of the Social Security program began as a measure to implement "social insurance" during the Great Depression that started following the Black Thursday stock market crash of 1929. The law was passed by Congress at the behest of President Franklin Delano Roosevelt in 1935 as part of the New Deal. Opponents challenged the Social Security Act in court, but it was upheld by a U.S. Supreme Court that had struck down other New Deal legislation.

And here are some of FDR's thoughts:

"No greater tragedy exists in modern civilization than the aged, worn-out worker who after a life of ceaseless effort and useful productivity must look forward for his declining years to a poorhouse. A modern social consciousness demands a more humane and efficient arrangement."

[Albany, N.Y., - February 28, 1929 - Governor Franklin D. Roosevelt, Message to N.Y. State Legislature]

It looks to me like FDR's Republican contemporaries in Congress, after much hemming and hawing, caved in and mostly voted "Yea" on the bill. Seventy years later, now in control of all three branches of government, the Republicans finally have their moment to exact revenge on the floating, mocking specter of FDR and are hell-bent on seriously weakening, and ultimately destroying, Social Security. But they have to be sneaky about it, for the elderly in this country represent a very substantial voting bloc and are not to be fucked with.

Why, you may be asking yourself-- that is, if you accept the premise I've laid out above-- do the Republicans want to destroy Social Security? After all, by their own admission, these "reforms" will do nothing to remedy the projected shortfalls that SS will encounter in 2042 (Yes, 2042, for fuck!). So, what's it all about? First off, shifting a large amount of funds from the Social Security Trust Fund into private investment accounts would provide a financial windfall to the prez's friends that make up the Wall Street class. Secondly, in order to make the prez's tax cuts for the rich permanent, they intend to default on those very Treasury Bonds that make up the Trust Fund in either 2018 or 2012 (I can't keep it straight). This (14th amendment, section 4), of course, is illegal, but so is invading a sovereign nation based on trumped-up charges, not to mention outing CIA assets for paltry political gains, holding detainees indefinitely without counsel, torturing said detainees, or stealing two presidential elections in a row. In other words, in the tangle of thorns that represents the illegalities committed by this crew, this would seem a mere trifle.

More importantly, though, than these practical considerations, especially for those of our right-wing brethren closer to the bottom of the food chain (i.e. voters), for gutting SS are the psychological and quasi-ideological components rooted in the mythologizing of the "self-made man." Therefore, by a trick of extortion and rhetoric, the great "Ownership Society" is born. Instead of paying into a collective pool, now workers can take some of what is taken out of their paychecks and put it into their very own private (or, as the Republican monolith has changed the word, "personal") accounts. We are assured that there will be some kind of oversight as to what kind of investments we all can make-- investing, after all, is "hard work." Then, for those of us who are not wealthy, we will be forced to transfer these funds to some kind of annuity once we reach retirement age. In short, they will be private-- excuse me-- "personal" accounts in name only.

It doesn't take much imagination though to envision this as step one of a complete phase out. Again, they say that the kind of investments that will be allowed will be strictly controlled-- tried-and-true conservative stocks and such. Imagine, though, if we again have a great spike in the stock market, like the tech bubble that we saw in the late '90s. I can already hear the protestations of the Republicans that "average, ordinary" people are being hogtied and hamstrung by all these unseemly government regulations. "Let them have full control of their personal accounts," they will say. And then when the bubble bursts, they'll say, "Let them eat cake."

But the kernel of all this miserliness, or at least a rallying cry for the bottom-of-the-food-chain dwellers on the Right, lies in the very petty observation-- I suppose an epiphany to some-- that the money collected via the payroll tax from the current crop of workers (including yours truly and every other Chablis-swigging lefty I know) goes to our current retirees. Again: The SS taxes you pay are not going into a giant pot to be tapped by you and you alone once you reach retirement age-- they're going to today's retirees (and today's disabled folk). YES! YOU ARE PAYING FOR SOMEBODY ELSE!

Well, heavens to Betsy! I've known that since before I reached puberty. But for some folks, this is a revelation, and one they don't take kindly to. Check out this article in that bastion of high-minded intellectualism and good taste, Free Republic, if you don't believe me. That's really all it is, folks. They simply can't support the notion of us collectively tending to the sick and old.

And now I think I'll have that vodka tonic.