Social Security: Piratization By Any Other Name...

Vol. 2, No. 2--March 19, 2005

As George Bush travels the country trying to sell his as yet undetailed plan to privatize Social Security, the number of Americans willing to trust this administration with their social safety net continues to decline. The President has so far been unsuccessful in convincing Americans that Social Security is indeed in crisis. What's more, the administration admits that to create private investment accounts through Social Security will require that the government borrow additional trillions of dollars, which not only will add to our crushing deficit, but also will do nothing to keep Social Security solvent.

Bush's selling points at his pre-screened, pre-scripted "town hall" meetings have been identified by several authors, including noted New York Times columnist and economist Paul Krugman and Don McIntosh, Associate Editor, Northwest Labor Press as being deliberately deceptive. The following articles describe the level of deception being perpetrated on the American people:

http://www.nytimes.com/2005/03/04/opinion/04krugman.html
http://www.nytimes.com/2005/02/04/opinion/4krugman.html
http://tinyurl.com/52l38
http://tinyurl.com/5dj5t

Who wins, who loses? Clearly, Wall Street will profit hugely if this scheme is allowed to succeed. Ironically, Social Security, a program that has been vastly successful in preventing our seniors from falling into the depths of poverty, was created by FDR precisely because the stock market is and has always been the least secure repository of Americans' hard-earned wages. In the last 70 years, senior poverty has fallen to 9% among the senior population thanks to Social Security. The specter of a return to the times when America's seniors had to beg on street corners is not the vision to which we aspire.

Also in harm's way would be the disabled and the children of deceased and/or disabled workers. The Institute for America's Future has recently published an analysis of how much young people in Michigan would lose in Social Security Benefits with privatization. According to this report, "...a typical 20-year-old Michigan resident would lose $152,000 during retirement if Social Security's guaranteed benefit is lost to a guaranteed gamble. It would also mean a 15 percent cut for a 45- year-old worker today and a 25 percent cut for a 35-year-old worker in Michigan." Read the report.

Congressman Dennis Kucinich (D-OH) has identified yet another way in which this scheme will harm the American people. The Administration plan to switch from wage indexing to price indexing, which has not yet entered into the national discussion, would cause a "precipitous drop in future retiree benefits"--as much as 40%. The reason for this switch is the long-term budget shortfall that will be created by privatization. According to Rep. Kucinich, "If you began working in 1959 and retired in 2003, at age 65, under wage indexing, your benefits rise with rising wages, you would get $1158 a month. Under price indexing, your benefits would be frozen, you would get only $701 a month. So it would be a 40% cut in benefits with price indexing, and a person would lose $100,000 in retirement benefits over a lifetime." Read the entire Kucinich press release.

So what is this rush to privatize Social Security really about? According to Robert Scheer of the LA Times, the real agenda is ideological and is intended in the end to dismantle Social Security. Even as moderate solutions to an imminently fixable system are being discarded or ignored by the administration, the Social Security Administration admits that it will be solvent and able to pay full benefits at least until 2042. Read Scheer's analysis of what really drives the push toward privatization.

Democrats.com has created an easy way for you to write to the editor of your local paper to explain why the Bush plan to privatize Social Security is wrong for the American people. Take action!

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