Wednesday, September 14, 2011

Tampering Will Only Result In Social Insecurity (March 24, 2005)

While attempting to resurrect America’s tattered image abroad by appointing longtime adviser Karen Hughes as America’s Public Relations point person, President Bush has embarked on a barnstorming domestic tour, that one reporter described as “resembling a Texas auctioneer pitching private accounts,” to bolster his proposed bold overhaul of Social Security.
Though it’s merely seven weeks into his second term, he’s off to a rotten start.
Bush and the free-spending, deficit-increasing, GOP-dominated Congress are turning their backs on the people who elected them only to reward, protect and take care of their wealthy friends. Politicians elected every two, four or six years, whether Democrat, Republican or Independent, are supposed to represent the interests of all the people, not just those who bankrolled their campaigns. But politicians tend to ignore the interests of anyone who can’t benefit them.
A recent poll indicated that less than one-third of Americans believes that private accounts, or personal investments, for Social Security are viable. No wonder, the only ones likely to benefit — in the long run — are typical Republican factions — corporations and big business — that will have access to the millions of available dollars if the plan is approved.
Then there’s a new, lower ceiling for awards in class action lawsuits that basically limits the liability of large corporations when their unquestionable blunders lead to injuries, permanent disabilities and death. (Auto manufacturers, insurance, tobacco and pharmaceutical companies must be thrilled.)
The Senate recently passed the Bush-backed overhaul of bankruptcy laws. However, the change only restricts individuals seeking to get out from under a mound of debt, while big businesses can restructure their way out of bankruptcy with few restrictions.
It’s the same GOP whine in a brand new bottle! Making laws to support business interests, not individuals. You could call this latest Republican strategy — No Business Left Behind.
During last fall’s campaign, President Bush referred to Social Security reform in vague terms. Now, the president’s attempting something Conservatives have wanted to do for 70 years — dismantle Social Security, a sure thing Americans have counted on, like breathing and taxes, since 1935 when President Roosevelt called it “laying the foundation for individuals to build their own security and give some measure of protection…against poverty-ridden old age.”
About 47 million people currently receive monthly Social Security benefits. Nevertheless, with the baby boomer generation — 78 million of ‘em — gradually approaching retirement that figure is expected to soar. Consequently, it is estimated that in twenty years, there won’t be enough workers to support the fund’s disbursements.
Bush supporters say Social Security fund’s surplus will be a deficit by 2017. To remedy that, it’s been suggested younger workers open private investment accounts with a small portion of future benefits because their “money will grow over time at a greater rate than the system can deliver.” That may be, but will unsophisticated investors realize the greater the rate of return, the higher the risk? Furthermore, the amount invested will subsequently be deducted from future benefits. Plus, as more divert funds, the more the Social Security pot will be reduced, leading to problems sooner than later. In addition, in the case of a prolonged bear market assets could shrink, upsetting one’s retirement reserve.
Advocates say younger workers don’t want to pay into a system for “old strangers,” but those same empty-nest geezers are still required to pay education taxes for strangers’ children!
Opponents, including most Democrats and the AARP, the lobby for Americans over 50, claim that Social Security is not in crisis and can pay 100 percent of benefits until 2042. The program must be strengthened, they acknowledge, but not immediately or haste with a solution that’s worse than the problem.
Private accounts would leave those who invest vulnerable to the roller coaster effect of financial markets with varying degrees of risk. Personal investing also means gambling inflation-protected, guaranteed payments for benefits that are not secured. Furthermore, those accounts would be subject to inflation and job loss. It’s not a risk worth taking — unless you’ve got a secure nest egg alternative.
Politicians have no problem debating retirement benefit changes — or discouraging a sensible national health care policy — because it doesn’t affect them. Elected representatives have comfortable, publicly-funded reserves, not to mention health care, the rest of us envy. Therefore, whichever way the debate goes, they’ve got nothin’ to lose. If all politicians were on Social Security, they’d likely have a different approach about tampering with it.
Every time Congress votes itself a raise, it should simultaneously increase Social Security payments. After all, future recipients work as hard — if not harder — as elected representatives.
There’s no reason for self-serving politicians, who’ll no longer have the Social Security surplus available to divert to other government operations, to transform a program that’s been fail-safe for 70 years into Social Insecurity just to add a chapter to one man’s presidential legacy. The outcome would merely tarnish the golden years for some seniors.