Posted by AzBlueMeanie:
On Monday the Arizona Daily Star published an AP (All Propaganda) report, For many, Social Security is no longer a good deal. The premise of the article: Social Security is no longer a "good investment" for the average worker, based upon an analysis of an Urban Institute study:
People retiring today are part of the first generation of workers who have paid more in Social Security taxes during their careers than they will receive in benefits after they retire. It's a historic shift that will only get worse for future retirees, according to an analysis by The Associated Press.
Another look at the Urban Institute numbers suggests that the average working family still enjoys a positive return when factoring in Medicare benefits. And plenty of workers will continue to enjoy a positive return on their lifetime Social Security tax payments — women more than men because they live longer, among other factors. And because benefits are progressive, low-income workers will continue to receive a positive return. For high-income workers the return went negative two decades ago.
So all this angst about "return on investment" is really about high wage earners, not average wage earners.
More to the point (from the AP article):
Social Security provides most older Americans a majority of their income. About one-quarter of married couples and just under half of single retirees rely on Social Security for 90 percent or more of their income, according to the Social Security Administration.
Indeed, about 46 percent of senior citizens in the United States have less than $10,000 in financial assets when they die. Most of these people rely almost totally on Social Security payments as their only formal means of support, according to the newly published study, co-authored by James Poterba of MIT, Steven Venti of Dartmouth College, and David A. Wise of Harvard University.
That means many seniors have almost no independent ability to withstand financial shocks, such as expensive medical treatments that may not be covered by Medicare or Medicaid, or other unexpected, costly events.
Given the costs of funerals, it's fair to say that less than $10,000 is virtually penniless.
On Friday, the Arizona Daily Star editorialized, Social Security: Is it really no longer a good deal?:
Do you think of Social Security as an insurance policy or as a pension plan?
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For a program this big and important, it's long past time to have a reasoned discussion about what Americans want Social Security to be: insurance against catastrophe or a retirement savings plan.
We hope the news that Social Security "is no longer a good deal" for most new retirees will spur the debate.
This is so stupid, it hurts. Social Security is not and has never been a retirement savings plan, and the AP's "return on investment" analysis is pointless. Social Security is social insurance against destitution in old age. This is not a matter for debate, President Franklin Roosevelt said so. MESSAGE TO CONGRESS REVIEWING THE BROAD OBJECTIVES AND ACCOMPLISHMENTS OF THE ADMINISTRATION--JUNE 8, 1934:
The third factor relates to security against the hazards and vicissitudes of life. Fear and worry based on unknown danger contribute to social unrest and economic demoralization. If, as our Constitution tells us, our Federal Government was established among other things, "to promote the general welfare," it is our plain duty to provide for that security upon which welfare depends.
Next winter we may well undertake the great task of furthering the security of the citizen and his family through social insurance.
It is the "social contract" from one generation of Americans to the next. "We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age." PRESIDENTIAL STATEMENT SIGNING THE SOCIAL SECURITY ACT--AUGUST 14,1935.
So what is this sudden interest in social security really all about? The so-called "Grand Bargain" -- going after social security and Medicare as part of a deficit reduction plan. Social security has nothing at all to do with the deficit; rising medical expenses under Medicare do.
Dean Baker at the Huffington Post writes, Beating Back the CEO Attack on Social Security and Medicare:
Last week I wrote about the conspiracy of corporate chieftains to impose a budget plan involving large cuts to Social Security and Medicare, regardless of who wins the elections in November. According to veteran Washington Post columnist Steven Pearlstein, who wrote approvingly of these efforts, many of the top executives of the country's biggest companies are meeting behind closed doors to design such a budget plan.
This plan is expected to follow the designs of the plan crafted two years ago by Morgan Stanley Director Erskine Bowles and former Senator Alan Simpson, the co-directors of President Obama's deficit commission. The Bowles-Simpson plan called for a reduction in the annual cost-of-living adjustment for Social Security that is equivalent to a 3 percent cut in benefits. It also called for gradually raising the normal retirement age to 69 and phasing in lower benefits for workers who earned more than $40,000 a year. The Bowles-Simpson plan would also raise the age of eligibility for Medicare to 67.
Pearlstein indicated that these corporate honchos were prepared to spend hundreds of millions of dollars to get their plan put into law. He put the necessary figure at $278 million. This target is made easier by virtue of the fact that the CEOs sit on trillions of dollars of corporate revenue and, thanks to the Supreme Court, all their contributions for this effort will be fully tax deductible.
That's the state of play, at least according to Pearlstein's assessment, or my interpretation of his assessment. The question is whether this juggernaut can be stopped?
Well, if it were a straight question of where the money lies, the answer is clearly no. The CEOs seeking to cut back or dismantle Social Security and Medicare can probably outspend the defenders of these programs 10 to 1. However, there is still the simple fact that the voters overwhelmingly support these programs.
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The question is how to make it so that popular sentiment overrides the big bucks of the corporate chieftains. The obvious answer would be to make the protection of these programs central issues in the election. Members of Congress and candidates for seats should be pressed to indicate where they stand on the proposed cuts to these programs.
That means getting them to answer specific questions, like whether they support reducing the annual cost-of-living adjustment or raising the normal retirement age for Social Security or the age of eligibility for Medicare. These are among the most important issues in people's lives and voters should not have to go to the polls not knowing where the candidates for the House, the Senate or the presidency stand on them.
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The news media should also be pressed into service in this effort. It is their job to tell us the candidates' positions on important issues and there are few issues more important to voters than Social Security and Medicare. People should harangue their local newspapers and television stations to ask candidates their positions on cuts to these programs. This is far more important than most of the gossip about the campaigns that dominates news coverage.
[The editors of the Arizona Daily Star clearly come down on the side of the CEOs seeking to cut back or dismantle Social Security and Medicare.]
The whole effort here must be focused on smoking out politicians on where they stand on cuts to Social Security and Medicare. The CEOs want to do this behind closed doors because they know that politicians who have to answer to their constituencies will never be able to get away with these cuts. The key is to force the debate into the sunlight.
The editors of the Arizona Daily Star said they want to spur a debate. You know what to do -- send your letters to the editor and give them a piece of your mind.