The Facts Machine

"And I come back to you now, at the turn of the tide"

Wednesday, April 27, 2005

UNDER THE RUG

I've been away for a while (Midterm season! Last one ever! For real this time!), so let's work our way in with something blatantly Marxist, shall we? You know, something like... protecting Social Security.

The hardcore advocates of private personal individual freedom accounts replacing Social Security -- Norquist, Stephen Moore, and their ilk -- have a number of goals in mind. One of them, as I have mentioned before, is "decapitation" -- that is, the privatizers oppose the entire FDR/LBJ welfare state, and they figure that if they can take down its cornerstone (Social Security), it will break the backs of their opposition and the rest will fall more easily.

But there's another reason they're after Social Security: It's essentially an insurance policy that everyone buys into and essentially everybody benefits from. This is, obviously, unacceptable to them. What they want is to turn the retirement situation in America to one that is similar to the health care situation. And what is that situation? The people who have medical insurance get good care and are generally happy with it, while the people who are uninsured get screwed. The trouble is, there are over 40 million American citizens who are uninsured, something like 14-15% of the population. The Republicans don't have a plan to address this; when one was proposed, as was done by Bill Clinton in '94, they were unified in opposition, and they weren't exactly quick to submit any compromise ideas. No, what they really want is to sweep those 40 million people under the rug, and not have to think about them. They like it that way. In other words, they'd like totally have a B+ average if you didn't count all those F's.

The same could become true if Social Security is gutted. Face it, not everybody is going to have access to knowledge to invest their 4% wisely and get that 3% growth rate. When I think of the 3% figure, I think of the $1,600 average Bush used to promote the 2001 tax cut. In addition, an Enron here and an WorldCom there, and some people will be really, really screwed. I know that's a somewhat sensationalist point to make, but I really would believe Bush's support for private accounts to be more genuine if they were coupled with some, uh, additions to Sarbanes-Oxley and other such oversight efforts.

The potential with a private account system is that it would be similar to the current state of health care in America, in that many Americans do fine with them, or even better than their SS checks would've been, but a large chunk of the population gets screwed. And what happens to them? They get swept under the rug, just like the uninsured! Is this a short-term political problem for them? Well, no, because were they to get their private accounts rendered into law, that means they would have already split the large anti-privatization constituencies, namely AARP. Right now they are relatively unified, so that's not an immediate concern.

They'll hide behind "averages" that make the situation look better than it is, those that handle the investments get a nice little windfall, and what was once an all-encompassing insurance policy becomes a game of winners and losers. When George W Bush says "ownership society", he means "some people win and some people lose". If you support the protection of Social Security, you're standing for "everybody doing alright at the very least".

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