Stats, Lies and Social Security

Confused about Social Security? The argument about the future of Social Security has left general befuddlement in its wake. Economists of all stripes, including Dean Baker in the 7/15/01 PP ["The Liberal Establishment was Wrong"], have weighed into the argument. Instead of making the issue clear and understandable, they have further muddied it.

Here is a Gray Panther take on the issue: First and foremost we need to accept that any discussion of the Social Security "Trust Fund" or Social Security "surplus" begins and ends with a lie. There is no Social Security "Trust Fund." There is no Social Security "surplus." If we could begin and end the day repeating those sentences five times we might be able to undo the damage caused by years of spin &endash; lies &endash; about the issue. For this has been the Big Lie technique at work. Government officials and the Media have repeated the phrases so often that people have come to believe them.

The idea of a Social Security "Trust Fund" was invented by the Reagan administration in an effort to convince American workers that they need to pay higher FICA [payroll] taxes to assure that Social Security will be there when they retire. The idea of a Social Security "surplus" was invented by Bill Clinton to convince the public to support his efforts to stop a big Republican tax cut. Although both inventions were lies, we believed them.

The FICA tax, hugely and unjustifiably inflated by the Reagan tax reform of 1983, has brought in an accumulated $1.2 trillion extra dollars to date, all of it from the pay checks of low and moderate income workers. Those dollars are supposed to be in that [in]famous, nonexistent "Trust Fund." But they've been spent, and are still being spent, for everything from paper clips to anti-ballistic missiles to the White House electric bill. The "Trust Fund," now filled with $1.2 trillion dollars worth of IOUs, will grow to an estimated $5 to $8 trillions worth of IOUs when the baby boomer generation hits retirement.

And where, beginning in the year 2016 or 2018, will the Treasury find that kind of change to pay out to retired folks? They will deduct it from retirees' Social Security checks, just as they directed employers to deduct big sums of money from workers' pay checks, beginning in 1983.

That sounds all right until it's pointed out that the retirees about to be taxed are the same folks who were over-taxed while they worked. They're just a little older.

The threat of that future tax increase will finally force someone in office to answer the question: "What happened to $6 or $8 trillion excess Social Security dollars paid in to the "Trust Fund?" Sen. Bob Graham, D-Fla., has described that day of reckoning as a "train wreck!"

The second big GOP income tax cut, just enacted by Congress, guarantees that retirees may soon be forced to begin funding their own retirement income. That massive hemorrhage from the US Treasury puts a period to the hopes of most workers for a decent retirement income, unless our government makes a complete turnaround and does the following:

1) remove both the cap on the FICA tax, and the stipulation that only wages be taxed for social insurance, and exempt the first $12,000 of earnings;

2) enact a sales tax on all equity transactions; and

3) amend the Social Security Act so as to make it a fully funded national pension system that guarantees all American retirees a decent retirement income.

American workers have been mislead for years about their sacrifice in the name of FICA. While they thought they were saving for their retirement, they were contributing heavily to the operating expenses of the Federal government. They were also helping to subsidize the luxurious lifestyles of wealthy Americans -- those same wealthy Americans whose top tax rate was cut from 70% to 36% by the same 1983 Reagan tax that elevated the FICA tax. It's time the government makes amends and begins to treat workers honestly.

Madison, Wis.

Who's Conning Who?

Re "The Great Social Security Con, Retirement Program's Real Problem, Trust Fund Theft" by Mark Weisbrot and Dean Baker in the 9/1/01 PP: [The authors] mention that the standard projections by the [president's Social Security privatization commission] assume the slowest growth in the nation's history, and that it is a pessimistic assessment of the future. But he never mentions why the commission expects economic growth to be low -- because the labor force growth rate is expected to be very low. This is a consequence of demographics that I have not ever heard disputed. By the way, the commission is assuming the same productivity growth rate in the future as the average of the last 30 years, as seems reasonable to me.

It is standard Weisbrot to disparage the projections as pessimistic without mentioning the reasons behind the projections.

The other thing is Weisbrot tries to argue that the Social Security Trust Fund (SSTF) is some kind of asset to Social Security. And indeed it is. What he fails to mention is that it is also a liability to the federal government, and future taxpayers. He never mentions that the SSTF is part of the national debt. Between 2016 and 2038, it is projected that future taxpayers will have to come up with more than $12 trillion to redeem the bonds in the SSTF. Some retirement savings plan! Our children are going to be pissed.

He also thinks that we boomers (and others) who have been paying these excess Social Security taxes are somehow entitled to the bonds in the SSTF. But he never mentions that we spent the money rather than saving it. That's right -- the surplus Social Security taxes were loaned to the general fund of the Treasury, which then spent the money on current non-Social Security federal programs such as defense. Thus, in effect, we've been paying excess Social Security taxes but then using the excess to reduce our income taxes. We've saved nothing. So how are we entitled to something from future generations if we've spent the money?

This shameful shell-game of paying surplus Social Security taxes -- but then using them to reduce our income taxes -- and then telling future generations that they have some kind of obligation to pay back the amount transferred -- is the most shameful con game that one generation has ever played on another. I am ashamed to be a member of the human race. I am also ashamed to call myself a progressive, when so many self-described "progressives" like Weisbrot and Baker are defending this deception and claiming entitlement to spent money.

Likewise, the other Social Security articles ("Please Don't Botch Social Security" by Molly Ivins on p. 12, and "Hypocrisy Now, Apocalypse Later", by M.W. Guzy, p. 12) also implied that the SSTF was some kind of savings plan without also mentioning that the money has been spent and is part of the national debt.

To me, telling half-truths (saying that SSTF is an asset to SS without mentioning that it is also a liability to the federal government and future taxpayers) is the same as lying. And to me, there is no such thing as a "lying progressive." It is not "progressive" to lie. I am ashamed that some "progressives" think that the way to hold on to the current SS system is by trying to win a lying contest with the privatizers.

Golden Valley, Minn.
Email jalars@compuserve.com

Editor's Note: For more enlightenment on Social Security, see page 10-11.

Don't Badmouth Ethanol

A.V. Krebs article "Nature of What's to Come" [9/1/01 PP] accuses ethanol as being bad for the environment. He notes that ethanol can contribute to ozone problems during the summer, which is a valid concern. He cites the work of David Pimental, who has been critical of the amount of energy it takes to produce a gallon of ethanol.

But Mr. Krebs fails to point out how bad petroleum products are for the environment, including MBTE, a petroleum-based fuel additive that is polluting groundwater coast to coast. Although ethanol isn't perfect, it is far safer for humans and the environment than anything derived from oil. Ethanol isn't shipped around the world in tankers. It isn't drilled out of the ground in far away places, such as the North Slope of Alaska. If spilled, ethanol can be cleaned up far more easily than oil.

More distressingly, Mr. Krebs claims that "environmentalists no longer are enthusiastic about [ethanol] as an alternative fuel," without mentioning any names. In contrast, the Sustainable Energy Coalition (www.sustainableenergy.org), which is comprised of environmental and consumer groups as well as trade associations for wind, solar, and biofuel industries (including ethanol), supports the increased production and use of ethanol.

I share Mr. Kreb's concern about ADM and other large agribusinesses. However, his distortion of ethanol's environmental impact is a disservice to his readers.

Earth Energy Systems, Ltd.
Madison, Wis.
Email higley@earthsys.org

The Politics of Cancer

The antiregulatory policies of the Reagan and Bush administrations are estimated to have caused 50,000 cancer deaths a year. One of three Americans will develop cancer, one of five will die from cancer. Since 1971 the National Cancer Institute has spent over $25 billion on cancer research. Yet the incidences of major killers -- lung, kidney, prostate, breast, testicular, colon, brain, multiple myeloma, and non-Hodgkins lymphoma, have dramatically increased, reported Robert Proctor in his book, Cancer Wars: How Politics Shapes What We Know and Don't Know About Cancer.

My wife, Lois, has lung cancer, I have prostate cancer. We ask, "What is going on here?" At the height of the environmental movement in the '70s, enlightened legislation became law: the Environmental Protection Act, the Clean Air Act, the Occupational Safety and Health Act, the Toxic Substances Control Act. Then the Reagan and Bush teams cut by 70% the cases against polluters handled by the Justice Department, gutted EPA and dismantled environmental, health, safety and occupational legislation, rewarding with higher profits the industries that had helped fund their campaigns, with no concern for public health.

Those industries wrongly claimed that natural carcinogens in our food more than industrial pollution of air, water and food were causing most of those cancers. Agribusiness didn't like the discovery by the National Academy of Science that chemical agriculture had failed and needed to be replaced by the alternatives. That would largely remove carcinogenic agricultural sprays from our environment and food and improve public health while bettering the agricultural economy.

"Cancer is caused by the chemicals in the air we breathe, the water we drink, and the food we eat. Yearly, cigarettes alone kill over 300,000 Americans. One out of three Americans will develop cancer, one out of five will die from cancer."

A heavily bribed Congress won't act without grassroots pressure, nor will the agricultural colleges. For all but cancer victims, the status quo is apparently good enough. Let's change that. Write letters to your member of Congress and your nearest agricultural college.

Brookings, S.D.

Time for Universal Health Insurance

It's no secret that our health care system is in trouble: hospitals running in the red, docs getting fed up and retiring early, nursing school applications down 25% from ten years ago, 44 million people without health insurance, the uninsured clogging emergency rooms, financial disaster hanging over all but the rich; medical bills are the second leading cause of personal bankruptcy.

To discuss the matter, some historical background is necessary. One hundred years ago the leading causes of death were infection, accident and childbirth. Quick and cheap. Now the leading causes of death are heart trouble, cancer and stroke. Slow and expensive. Sixty years ago, when you were old, you were either healthy or dead. An illness or injury that is now expensively disabling was usually fatal. This was the case back to the beginnings of humanity. We now have a new ballgame with major implications that have not been well recognized.

The non-profit Blue Cross (hospitals) and Blue Shield (doctors) were the first widespread health insurance plans, beginning in the late 1920s. They were the only game in town, generally, until the 1950s. They paid out 94% of the premiums in benefits compared to the for-profit companies today who get upset if they pay out 80%. Incidentally, the hospitals' administrative overhead has gone from 8-10% of cost to 20+, largely due to the problems with the myriad insurance plans. Interestingly, the American Medical Association opposed health insurance until after WWII. The for-profit companies had experience with the war plants covering a young, healthy population while the Blues covered nearly anyone.

The for-profits saw that they could, by careful selection -- cream- skimming if you will -- undercut the Blues, even adding to the group plans very profitable life and disability insurance to cover below cost health insurance. They soon grew into the big chain operations, buying up struggling hospitals, signing up physicians who were afraid of "government medicine" and going after the big bucks.

OK, so what about universal coverage? First of all, by eliminating the big administrative overhead, the uninsured can be covered for no more money. These people usually do get care eventually for major problems; many of the problems become major because of lack of early attention. It would relieve businesses of the big expense and hassle of insuring employees. There is no logic in tying health care to employment. In addition, physicians could practice medicine rather than wrestle with the swarm of insurance companies.

(retired health care administrator)
Boulder, Colo.

Stop Arctic Drilling, Unions

I was horrified by the Teamsters ... support of drilling in ANWR. When I called my local teamsters' office to ask why, they hung up on me repeatedly. I just wonder why, in a state like Nevada which is a right to work state, they are being so callous about people who traditionally support them ... Democrats. In Nevada, unions need every inch of support they can get and now they will have one less supporter if drilling goes through.

If the unions go to bed with the Republicans on this issue, they will only break the labor/social progressive/environmental coalition that really keeps the Democratic Party alive. Ralph Nader is waiting in the wings for disillusioned green folks like myself if the Democrats in the Senate sell out on ANWR. ANWR is as important to greens as the right to strike is to unions.

Divide and conquer ... that's the Republican strategy and I think it is working.

Sparks, Nev.
Email wakinglight@home.com

Editor's Note: The AFL-CIO labor federation has not endorsed ANWR drilling. Generally Teamsters and building trade union leaders support it.

Tax Corporate Lobbyists

Several weeks ago, somebody wrote in and suggested backing an initiative to tax corporate lobbying. I think that is one of the best ideas I have ever heard. The simplest solutions often are the best.

As corporations, businesses enjoy special advantages under the law. So why not use this distinction from private individuals or unincorporated businesses to our advantage. We could levy taxes on corporate lobbyists or even corporate campaign contributions for that matter, without placing the same burden on individual citizens. The proceeds could then be allocated, not into the general fund, but into various schemes to break the stranglehold of corporate influence upon our government and to make the electoral process more democratic. I believe this approach could deliver all the benefits, and then some, of campaign finance reform legislation without any of problems associated with various First Amendment issues or the expansion of the Federal Election Commission.

Through globalization, corporations have found a way to circumvent, undermine and subsequently challenge the authority of national governments. Globalization, as a form of economic blackmail, has been a virtual silver bullet in the attempt to roll back decades of gains in social policy. At this late stage in the game, I am convinced, that if democracy and freedom are to survive, the citizenry must find its own silver bullet. I am hopeful that taxes on corporate lobbyists and corporate campaign contributions could be that silver bullet.

I am hopeful because I believe that this is one cause that could unite people across the political spectrum into a powerful coalition bent on reform. If constituency groups across the county could pass such reform at the state and local level, eventually national leaders would come under tremendous pressure to implement similar measures. Could you imagine a politician trying to justify killing such legislation!

Redding, Calif.

Who Won the Cold War?

The Progressive Populist's excellent columnists have given me quite an education on farm issues.

It looks to me as though US factory farms are nothing more than the capitalist version of the Soviet collective farm. The whole idea, for both of these systems, is control of production, not feeding people.

The Soviets simply took the farmland away from owners. We do it differently here. Farmers are driven out of business one way or the other, and agribusiness ends up owning the land. The result is the same.

I think it's been proven that small farms are more productive, healthier, and provide more diversity. But when monopoly and control come first, I guess diversity and production don't count for much.

Nevada City, Calif.

Genoan Anarchists Were Planted

Nathan Newman in his 9/1/01 PP article, "Who killed Carlo Giuliani?", was taken in by mainstream media reporting on the nefarious actions of the Black Bloc. It's a shame that Newman did not first read David Graeber's article in 9/15/01 In These Times, an on-the-spot report from Genoa called "Among the Thugs". "Over and over, on Saturday came reports of a mysterious group of 30 to 40 'anarchists' whom nobody else had seen before; huge guys, for the most part, and extraordinarily violent -- willing to assault the [real] anarchists who tried to stop them from attacking small shops and setting fire to cars. By the end of the day, after countless sightings of these "Black Blockers" emerging from police stations, hobnobbing with the carabinieri or assisting with arrests, the only question left in anyone's mind was whether one was dealing with undercover cops or fascist vigiliantes working with the police."

As usual, be careful about trusting mainstream media.

Guttenberg N.J.

Star Wars Rollercoaster

If anyone has doubts about Star Wars they need only look at those folks stuck on a roller coaster today in Arlington, Texas, because of a "computer glitch."

Monticello, Ark.


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