Don Davis

Social Security: The War Begins Tuesday, and You Better Say...Oh, No!

Filed By Don Davis | November 07, 2010 11:30 AM | comments

Filed in: Politics
Tags: Barack Obama, Campaign for America's Future, Democrats, economic policy, election 2012, Peter G Peterson, Peterson Foundation, politics, Privitazation, Republicans, Social Security

It is my job to bring to you not just the news that took place, but the news9-22-Social-Security.jpg that has yet to happen. Today, that's exactly what we have. There is a war coming to try to change Social Security from a social safety net to a "revenue stream" for certain corporate interests, and that war is set to begin Tuesday morning, according to information that was provided to me yesterday afternoon. Follow along, and you'll be both forewarned and forearmed.
BIG MISTAKE - MANY MAKE - RELY ON HORN - INSTEAD OF - BRAKE - BURMA SHAVE --Actual "Burma Shave" Message, 1945, from "Verse By The Side of the Road", Frank Rowsome, Jr.
So here's the dish: a limited partnership corporation called The Blackstone Group, through years of trading in real estate, operating hedge funds, giving financial advice to other companies and governments, and buying and selling companies (Hilton Hotels is one of theirs, the company that makes Corexit, the oil dispersant, is another), made its boss Peter G. Peterson a more-than-billionaire; a billion of that went to endow a Foundation that bears his name. The Foundation has a particular interest in things budgetary and governmental, and they are seen as one of the groups most looking to change the way Social Security works today. (Change, you say? Indeed, and if you've been following this series of stories, you already have an idea of what that might entail.) The next thing you need to know is that there is a Great Big Deal Presidential Commission currently at work who is charged with identifying.
"...policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. This result is projected to stabilize the debt-to-GDP ratio at an acceptable level once the economy recovers. The magnitude and timing of the policy measures necessary to achieve this goal are subject to considerable uncertainty and will depend on the evolution of the economy. In addition, the Commission shall propose recommendations that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government."
...and that the Commission is going to deliver a report with its suggestions December 1st. It would be fair to say that there are those who are concerned that "the fix is in", so to speak, and that the report will be the beginning of an effort to privatize Social Security, and guess what? Managing the federal government's Social Security money, for a handsome fee, would be a spectacular business opportunity for Pete Peterson and The Blackstone Group, and to help create the environment where that can happen, the Peterson Foundation is dropping $20 million on a TV ad campaign to try to convince you to get interested in privatizing Social Security, too. This Tuesday morning, November 9th, Peterson will appear at Washington, DC's Newseum to unveil the advertising campaign, presumably to the delight of the assembled throng and the sipping of the coffee of the assembled media; this according to a Peterson Foundation press release that came across my desk yesterday. There's even a catchy name for the reform program: "OweNo" and if you've already written your own "Oh, No!" Social Security joke, you're apparently a bit faster on your feet than the guy who tried to sell Chevy Novas in Spanish-speaking countries or the folks who came up with this catch phrase. So that's the story: come Tuesday, Pete Peterson, who runs a Big Fat Wall Street Firm That Would Love To Manage Your Money For Big Fat Fees, is dropping $20 million to tell you that it's time to "get a Chilean" and I'm here to tell you that such a procedure is going to hurt your wallet, a lot--and when it's all over, you're the one who's going to be saying "Oh, No!" This post was written with the support of the CAF State Blogger's Network Project.

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This needs to be on HuffPo. Have forwarded to AARP. Hope they will help although they are just BIG HEALTH revenue stream! I think sometimes. Probably should send to Gray Panthers if they are still active..... ah Move On and BoldProgressives!

i got another idea in mind as well, but i can't announce it today...but i will tease: get your video camera ready, because we have some homework coming.

Not that I would have a big 401(k) account in the stock market -- but the last time I looked, the American stock market(s) have been doing the best they can just to move sideways. So what sort of miracle is privatizing Social Security supposed to bring about?

Or maybe the secret is to invest Social Security funds in the companies creating all the green jobs in China (companies that are some Chinese and some American) -- you know, the same green jobs that we could be creating here in the US if only our country had a decent energy policy, which in turn will only happen when the all the big, old school stock market investors let go of protecting the "dirty, old energy" oil and coal industries.

Is that the extent of our options: borrow from China, or invest in China? I hope not.

i don't think i could have put that better, and big ups to you for doing so.

OK, lets look at the small scale experiment for this.
In the early 2000's the DoD started a new program for military personel. They were allowed to invest 15% of thier retirement with holdings in various ventures. AKA the stockmarket.
60 million was invested the first month. On the start of month 2, those self same funds were in the negative numbers.
60 million invested, a 15 million deficit on the second month.
The markets had crashed and the CFO had absconded with 48 million dollars.
Its ok, the military did lose anything. YOU, the tax payer paid 75 million dollars in to that fund. You're probably still paying in to it too.
Makes me kind of wonder who the goverment is looking out for... oh, duh, they look out for the corprate citizen!
I forgot about that.
At least I'm retired military. My health care is untouchable and so far so is my retirement. I'm happy! :D

in chile, they way they got around that problem is to allow for government bailouts of the retirement accounts, and post-'08 crash, that may have to happen.

that sounds like a great idea, doesn't it: you invest, if anything goes wrong, we'll bail you out, and you get to keep the fees for the work.

The good news is, for those of us dependent on SS such as myself, the last election cycle established we can openly discuss second amendment remedies if this is attempted........

lol. you've got to wonder about the second amendment folks who say that the only reason we have our rights is because of guns, yet don't seem to mind much when other rights are taken away.

sometimes i wonder...and other times i don't even bother trying to wonder.

While we are counting all the blessings that the Second Amendment is bestowing upon this great nation, let us not overlook the fact that easy-to-buy American guns are arming the Mexican drug cartels.

The Right-Wingers love to trash the Mexicans -- but they are blind to the way that the NRA and such is turning the Mexican-American border from El Paso to San Ysidro into a battlefield between drug lords and drug enforcement agencies.

And in case you haven't checked the score since half-time, the drug lords are winning.

P.S. In the interest of fairness, it also is worth mentioning that there would be no Mexican drug war if there weren't such an enormous demand for drugs in the US -- that part of the puzzle, I suspect, knows no particular economic class, political party or ideology.

considering the distinct absence of a mexican liquor war, it might also be fair to say american drug criminalization is the real cause of the mexican drug wars--but then again, what do i know?

if you're looking to advance a second amendment solution in a very stylish way...might i suggest the kimber model 1911 .45 acp centennial edition?

tres chic.

BrooklynHolly | November 7, 2010 8:06 PM

Gray Panthers are still around and very active around Social Security! They're doing hill visits tomorrow to all deficit commission members. They could use your support: join, donate, or sign up for their e-action alerts! www.graypanthers.org

thanks for pointing that out, and i will sign up for the email alerts.

and remember: be alert, because america needs more lerts.

Robert Ganshorn Robert Ganshorn | November 8, 2010 4:09 AM

In 1935 when the program was created African American males lived to the age of 50 on average and the longest lived were Caucasian women at age 66 and a half years.

The solution to SSI is a continued upward creep in the eligibility age for those who are not disabled. This will insure that Americans will again save rather than buy junk from China or cruise through town in gas guzzling vehicles.

i'd have to disagree with both your premises:

--on the one hand, there are a variety of ways that you can get to funding stability that don't involve adjusting the retirement age upward...and just to make a point, i have a friend who works in the trades who points out that "65-year-old bricklayer" ain't gonna get it out on the jobsite (same thing in the healthcare industry, or restaurant and hotel work, or in manufacturing), and that's something we have to remember when we're talking about eligibility age.

--and on the other hand, there's no reason to believe that people who can't afford to save for retirement now will suddenly start saving money because they have to work longer.

if you make %35,000 a year, or less, and you're barely getting by, how do you take more out of your income for savings?

that's the reality for millions of us, and making the retirement age 70 or 80 or 200 won't change that reality.

Robert Ganshorn Robert Ganshorn | November 10, 2010 3:34 AM

Don,

Firstly catch up, there is already upward creep in the retirement age for full benefits. Due to my youth I cannot obtain full bennies until age 66.5. As I will probably live into my 90's I will be paid back far more than I have ever paid in.

If you question the reality of the longevity statistics I applied please investigate them for yourself.

And you will excuse me if I point out that a 65 year old bricklayer will show up on time Monday morning and will not be hung over either. I know whereof I speak in that as a railroad track crew worker it was typically 55+ year olds and the 18 year old version of myself who "made it in" on Monday mornings at 5:30 AM. I always had a job during college.

While I agree that the advent of sulfa drugs and polio vaccine etc. certainly increased the average age of Americans I was speaking to the "intent" of the creation of Social Security. It was not intended to replace saving for your elder years. And yes, I know people living just on SSI who still save. It is called "thrift." Look into it.

Other than a house they paid off in eight years my parents never owed a bill to anyone, or had a "revolving credit" charge account. My father had an income of $6,000.00 per year in 1968 which would be worth 38,221.00 in current dollars. I wore my brother's "hand me downs" and my mother still stayed at home and canned food for winter from her garden. There were few luxuries, but there was never "barely getting by" and we were a family of four.

We have become a society that feels deprived if they are not quaffing overpriced lattes.

here's my take on all this: we began social security in the first place because it was not acceptable to have a very high level of elder poverty in this country.

it is now estimated that about 50% of seniors, today, would be living below the poverty line were it not for social security; with it in place, that figure's about 12%

so we can argue moral hazard if we wish...but the reality is that the moral hazard of tossing grandma out in the street isn't acceptable to most americans.

but here's another reality that we'll address in a later story: you can simply remove that $108,000 cap on social security taxable income and get to "full funding stability" for the oasi trust fund for the next 75 years, with no changes in retirement age required.

now if you were to choose between that option and raising retirement ages (and we might be about to, as it happens), which seems better?

On average age:

Old people aren't living a lot longer, according to actuaries. Fewer people are dying young, upping the average. And that means more workers are paying into the system. We don't need to push the retirement age. We are in a self-financed system, that will be solvent for decades, IF we get the unemployed back to work.

that is a poorly understood but vital part of longevity statistics--but there is one big exception: aids has caused average lifespans to drop in africa over the past two decades or so...and it's not because more kids are dying at younger ages.

Robert Ganshorn Robert Ganshorn | November 10, 2010 3:40 AM

Please tell me what AIDS in Africa (regrettable though it is) has to do with the American Social Security system. You overlook blithely the 1946-1963 "baby boom" children following WWII who will shortly retire to be supported by fewer younger workers.

Oh, and this of course overlooks the reality that there is no money saved to fund it. The government "borrowed" it from itself.

there is no connection. however, it is an observation likely to be of interest to those who follow issues actuarial.