Wall Street Bailouts? No problem: Keeping Social Security’s Promise, well.
It’s been awhile since we’ve given a Networthy Award because, in all honesty, so much of the coverage on Social Security and Medicare lately has been either flat out wrong, full of half-truths or propaganda-laden campaign messaging.Today we say thank you to Dean Baker for this postat TPMCafe which provides some desperately neededinsight into the current campaign to convince you to accept cuts in Social Security. Dean gets it just right andthat’s why this is a Networthy Award winner for outstanding web coverage on the issues of Social Security andMedicare. The Wall Street TARP Gang Wants to Take Away Your Social SecurityBy Dean Baker , Center for Economic and Policy Research. Originally posted on TPM CafeJust over two years ago, the Wall Streeters were running around Congress and the media saying that if they don’t immediately get $700 billion the world will end. Since they own large chunks of both, they quickly got their money.Even more important than the hundreds of billions of loans issued through the TARP was the trillions of dollars of loans and guarantees from the Fed and the FDIC. This money came with virtually no strings attached. It kept Goldman Sachs, Citigroup, Morgan Stanley, and Bank of America and many others from collapsing. As a result, folks like Goldman CEO Lloyd Blankfein are again pocketing tens of millions a year in wages and bonuses, instead of walking the unemployment lines. Instead, 15 million ordinary workers are being told to just get used to being unemployed; it’s the “new normal.”But wait, it gets worse. The thing about Wall Streeters is that no matter how much money you give them, they always want more. Now they are using their political power and control over the media to attack Social Security.This effort is being led by billionaire investment banker Peter Peterson. Mr. Peterson has personally profited to the tune of tens of millions of dollars from the “fund managers’ tax subsidy,” an obscure provision of the tax code that allows billionaires to pay a lower tax rate than schoolteachers and firefighters. However, Peterson believes in giving back. He has committed $1 billion to an effort that is intended to take away the Social Security benefits that people have worked and paid for.As part of this effort, Peterson set up a whole new foundation, the Peter G. Peterson Foundation. He and/or his foundation created a “news service,” the Fiscal Times, which is intended to promote the view that we have no choice but to cut Social Security. The Fiscal Times has entered into agreements with the Washington Post and other credible newspapers to provide material.Peterson is also funding the creation of a high school curriculum which is intended to tell our children that the in the future the country will be too poor to finance Social Security. He funded a silly exercise called “America Speaks,” which was supposed to convince an assembly of selected participants that we must cut Social Security after a daylong immersion in Peterson-style propaganda. (The people didn’t buy it.) And now his crew is spending $20 million on an ad campaign to convince people the world will end if we don’t cut Social Security.Attacks on Social Security have been fended off in the past and it is possible that this one will be too. It is an incredibly popular and successful program. It does exactly what it was supposed to do. It provides a modest income to the retired and disabled, and their families, to ensure that people who have spent their lives working will not fall into poverty. It is also extremely efficient, with administrative costs that are less than 1/20th as large as the costs of private insurers.It also has very little fraud. We know this because earlier this year the Washington Post made a big point of hyping mistaken payments to federal employees than involved less than 0.01 percent of Social Security spending. If substantial fraud did exist, the Washington Post wouldn’t have to hype small change to try to discredit the program.The really incredible part of this story is that we should be talking about increasing Social Security benefits. Benefits are quite low by international standards. The portion of wage income replaced by Social Security is considerably lower than the retirement benefit provided by the systems in Australia, Canada, Germany and most other wealthy countries.As a result, many of the retirees who are dependent almost entirely on Social Security have incomes that are only slightly above the poverty line. A modest increase in benefits could make a big difference in these people’s standard of living.In addition, the near retirees, the people directly in the gun sights of the Wall Street TARPers, have just seen most of their wealth destroyed by the collapse of the housing bubble. The Wall Streeters now want to kick them yet again, by taking away Social Security benefits that they have already paid for.If Congress and the media worked for the public, we would be debating Wall Street speculation taxes right now. Insofar as we need to do something about the deficit in the longer term, taxing Wall Street speculation is a far more economic desirable route than taking away the Social Security benefits that ordinary workers have already paid for. We could easily raise more than $1.5 trillion over the next decade with a broadly based speculation tax than would have almost no impact on anyone except the Wall Street crew.Even the IMF is now pushing higher taxes on the Wall Street types, recognizing the enormous waste and rents in the financial sector. But the media and Congress do not respond to economic reality, they respond to money. And Peter Peterson and the Wall Street crew are not paying for an honest discussion of the country’s fiscal and economic problems. They are financing a rigged debate that is intended to result to even more money flowing to Wall Street and less to those who work for a living.
Voting for Change: But What Kind?
We can?t help but think of the old saying that goes ?be careful what you wish for?you may just get it.?A frustrated American electorate went to the polls and, as historically happens in midterm elections, voted out the party in power in the US House and even shifted the balance in the Senate. So, we?ve spent the morning looking at what this shift potentially means for America?s seniors. Specifically, what do these newly elected members say about Social Security and Medicare? The answer is, to put it mildly, discouraging:
?Social security is a bad investment?you could probably do no worse sticking your money under your mattress?let young working people opt out, the sooner the better, let ?em opt out and get a better investment.? Rand Paul, KY Senator-elect?I have been arguing for many years in favor of Social Security personal retirement accounts.? Pat Toomey, PA Senator-elect. In Toomey’s book, the first subhead under the “Transforming Social Security” chapter is “Personal Accounts Lead to Personal Prosperity.”“Social Security, whether we want it to or not, in its current form cannot survive and will not exist for us?”I do think the retirement age issue is going to have to be confronted?The other is giving people the option of taking some of their Social Security money, at least a potion thereof, and investing it in an alternative to the Social Security system itself.” Marco Rubio, FL Senator-elect
And that?s just in the Senate. In the House, long-time Social Security advocate and chairman of the Social Security subcommittee, Earl Pomeroy, was defeated by conservative Rick Berg. Pomeroy was the House sponsor of legislation to provide COLA relief to seniors and was expected to be considered by the House this month. That legislation is now unlikely to get any attention in this new climate on Capitol Hill. His replacement, Congressman-elect Berg, opposes raising the payroll tax, reducing benefits, increasing the retirement age, or privatizing Social Security but proposes allowing oil and gas drillingin National Parks as a way to raise revenues for Social Security.
?There’s a huge opportunity right now to take those mineral assets that are on the federal government’s balance sheet and shift them to Social Security.? Congressman-elect Rick Berg, R-N.D
It?s unlikely that drilling in National Parks will be seen as a serious option for funding Social Security; however, COLA relief legislation is definitely a serious issue for millions of seniors facing the second year in a row with no cost of living increase.And let?s not forget that the President?s fiscal commission has clearly targeted Social Security for benefit cuts, an increase in the retirement age (which is just another form of benefit cut), indexing or countless other mix-and-match reforms using Social Security funds to balance the federal books. The commission?s proposal, if there is one, will be presented to a lame duck Congress next month. That means many of the pro-Social Security advocates defeated at the polls yesterday–members who are literally packing up their offices–may have to cast one last vote on their way out of town. It?s a vote that could change Social Security forever.
Cast Your Vote
As a non-partisan organization committed to the preservation of Social Security and Medicare, we don?t spend much time blogging on how the political horse race is predicted to end for each election cycle. However, what is important to us is that when you go to the polls you understand how your vote will impact the futures of America?s most successful government programs. Where do the candidates on your ballot stand on privatization and proposed benefit cuts for seniors? Do they believe that the retirement age should be raised as a way to reduce benefits for future retirees? Do they believe that Social Security contributes to the deficit?even though the factsprove just the opposite? Can you separate the political fact from fiction?Before you cast your ballot be sure you know the answers to these questions because regardless of who wins or loses today, it?s clear Social Security already has a target on it?s back. Washington?s fiscal hawks hope the President?s fiscal commission will recommend cuts to Social Security as a way to fix a fiscal mess the program did not create. They further hope a lame duck Congress, potentially full of members who?ve already lost their seats and are no longer accountable to their constituents, will ease the passage of the fiscal commission?s recommendations.So cast your vote?and cast it wisely.
Retired and Bankrupt
As the great recession drags on it?s clear that the average American?s dream of retirement may be just that?a dream. Far from the fiscal hawks? mythology of ?greedy geezers? living high on the government hog or cow, or whatever farm analogy you prefer, it?s clear that a growing number of seniors are facing frightening fiscal futures.There have been a number of stories recently highlighting the realities facing today?s retirees. USA Today wrote:
The ranks of older bankruptcy filers also have been swelling rapidly. From 1991 to 2007, bankruptcy filings by those 65 and older increased by 150%, while filings in the 75-to-84 age group soared 433%, according to the Consumer Bankruptcy Project. Older Americans are staggering under debt because of a variety of problems ? from unexpected job losses late in life and underemployment to overwhelming medical bills and providing financial help to their children and grandchildren, analysts say. Making the issue even more serious: They have little time to climb out of debt, says Matthew Beatman, bankruptcy lawyer at Zeisler & Zeisler in Bridgeport, Conn.
A University of Michigan Law School study examined why Americans over 65 are the fastest growing demographic of bankruptcy filers and reports that seniors blame credit card debt.
And though older bankruptcy filers blame credit cards for their debt, they’re not the underlying cause of their problems. Much of the credit card debt resulted from attempts to supplement lost income. “When people in their 50s are laid off after they have been at the same company for 25 to 30 years, they find things have changed,” says Brian Grogg, a credit counselor at GreenPath Debt Solution in Farmington Hills, Mich. “They need to know more about computers. They find it harder to get a job.” And seniors who rely on Social Security are finding it insufficient. There will be no increase in retirement benefits in 2011 for the second year in a row. — USA Today
As we?ve reported here before, we can not afford to ignore thegrowing Retirement Income Deficit facing millions of Americans. Yet, that?s exactly what?s happening in Washington in the rush to balance the federal books on the backs of programs like Social Security and Medicare.
All Tricks & No Treats from the Fiscal Commission
Washington could have an especially frightening ?treat? for Americans this Halloween. The President?s Fiscal Commission and deficit-hawks in Congress have a terrifying new plan for America?s workers, requiringthem to stay on the job until 70 years old before qualifying for full Social Security benefits.Be afraid?be very afraid?
Wall Street Bailouts? No problem: Keeping Social Security’s Promise, well.
It’s been awhile since we’ve given a Networthy Award because, in all honesty, so much of the coverage on Social Security and Medicare lately has been either flat out wrong, full of half-truths or propaganda-laden campaign messaging.Today we say thank you to Dean Baker for this postat TPMCafe which provides some desperately neededinsight into the current campaign to convince you to accept cuts in Social Security. Dean gets it just right andthat’s why this is a Networthy Award winner for outstanding web coverage on the issues of Social Security andMedicare. The Wall Street TARP Gang Wants to Take Away Your Social SecurityBy Dean Baker , Center for Economic and Policy Research. Originally posted on TPM CafeJust over two years ago, the Wall Streeters were running around Congress and the media saying that if they don’t immediately get $700 billion the world will end. Since they own large chunks of both, they quickly got their money.Even more important than the hundreds of billions of loans issued through the TARP was the trillions of dollars of loans and guarantees from the Fed and the FDIC. This money came with virtually no strings attached. It kept Goldman Sachs, Citigroup, Morgan Stanley, and Bank of America and many others from collapsing. As a result, folks like Goldman CEO Lloyd Blankfein are again pocketing tens of millions a year in wages and bonuses, instead of walking the unemployment lines. Instead, 15 million ordinary workers are being told to just get used to being unemployed; it’s the “new normal.”But wait, it gets worse. The thing about Wall Streeters is that no matter how much money you give them, they always want more. Now they are using their political power and control over the media to attack Social Security.This effort is being led by billionaire investment banker Peter Peterson. Mr. Peterson has personally profited to the tune of tens of millions of dollars from the “fund managers’ tax subsidy,” an obscure provision of the tax code that allows billionaires to pay a lower tax rate than schoolteachers and firefighters. However, Peterson believes in giving back. He has committed $1 billion to an effort that is intended to take away the Social Security benefits that people have worked and paid for.As part of this effort, Peterson set up a whole new foundation, the Peter G. Peterson Foundation. He and/or his foundation created a “news service,” the Fiscal Times, which is intended to promote the view that we have no choice but to cut Social Security. The Fiscal Times has entered into agreements with the Washington Post and other credible newspapers to provide material.Peterson is also funding the creation of a high school curriculum which is intended to tell our children that the in the future the country will be too poor to finance Social Security. He funded a silly exercise called “America Speaks,” which was supposed to convince an assembly of selected participants that we must cut Social Security after a daylong immersion in Peterson-style propaganda. (The people didn’t buy it.) And now his crew is spending $20 million on an ad campaign to convince people the world will end if we don’t cut Social Security.Attacks on Social Security have been fended off in the past and it is possible that this one will be too. It is an incredibly popular and successful program. It does exactly what it was supposed to do. It provides a modest income to the retired and disabled, and their families, to ensure that people who have spent their lives working will not fall into poverty. It is also extremely efficient, with administrative costs that are less than 1/20th as large as the costs of private insurers.It also has very little fraud. We know this because earlier this year the Washington Post made a big point of hyping mistaken payments to federal employees than involved less than 0.01 percent of Social Security spending. If substantial fraud did exist, the Washington Post wouldn’t have to hype small change to try to discredit the program.The really incredible part of this story is that we should be talking about increasing Social Security benefits. Benefits are quite low by international standards. The portion of wage income replaced by Social Security is considerably lower than the retirement benefit provided by the systems in Australia, Canada, Germany and most other wealthy countries.As a result, many of the retirees who are dependent almost entirely on Social Security have incomes that are only slightly above the poverty line. A modest increase in benefits could make a big difference in these people’s standard of living.In addition, the near retirees, the people directly in the gun sights of the Wall Street TARPers, have just seen most of their wealth destroyed by the collapse of the housing bubble. The Wall Streeters now want to kick them yet again, by taking away Social Security benefits that they have already paid for.If Congress and the media worked for the public, we would be debating Wall Street speculation taxes right now. Insofar as we need to do something about the deficit in the longer term, taxing Wall Street speculation is a far more economic desirable route than taking away the Social Security benefits that ordinary workers have already paid for. We could easily raise more than $1.5 trillion over the next decade with a broadly based speculation tax than would have almost no impact on anyone except the Wall Street crew.Even the IMF is now pushing higher taxes on the Wall Street types, recognizing the enormous waste and rents in the financial sector. But the media and Congress do not respond to economic reality, they respond to money. And Peter Peterson and the Wall Street crew are not paying for an honest discussion of the country’s fiscal and economic problems. They are financing a rigged debate that is intended to result to even more money flowing to Wall Street and less to those who work for a living.
Voting for Change: But What Kind?
We can?t help but think of the old saying that goes ?be careful what you wish for?you may just get it.?A frustrated American electorate went to the polls and, as historically happens in midterm elections, voted out the party in power in the US House and even shifted the balance in the Senate. So, we?ve spent the morning looking at what this shift potentially means for America?s seniors. Specifically, what do these newly elected members say about Social Security and Medicare? The answer is, to put it mildly, discouraging:
?Social security is a bad investment?you could probably do no worse sticking your money under your mattress?let young working people opt out, the sooner the better, let ?em opt out and get a better investment.? Rand Paul, KY Senator-elect?I have been arguing for many years in favor of Social Security personal retirement accounts.? Pat Toomey, PA Senator-elect. In Toomey’s book, the first subhead under the “Transforming Social Security” chapter is “Personal Accounts Lead to Personal Prosperity.”“Social Security, whether we want it to or not, in its current form cannot survive and will not exist for us?”I do think the retirement age issue is going to have to be confronted?The other is giving people the option of taking some of their Social Security money, at least a potion thereof, and investing it in an alternative to the Social Security system itself.” Marco Rubio, FL Senator-elect
And that?s just in the Senate. In the House, long-time Social Security advocate and chairman of the Social Security subcommittee, Earl Pomeroy, was defeated by conservative Rick Berg. Pomeroy was the House sponsor of legislation to provide COLA relief to seniors and was expected to be considered by the House this month. That legislation is now unlikely to get any attention in this new climate on Capitol Hill. His replacement, Congressman-elect Berg, opposes raising the payroll tax, reducing benefits, increasing the retirement age, or privatizing Social Security but proposes allowing oil and gas drillingin National Parks as a way to raise revenues for Social Security.
?There’s a huge opportunity right now to take those mineral assets that are on the federal government’s balance sheet and shift them to Social Security.? Congressman-elect Rick Berg, R-N.D
It?s unlikely that drilling in National Parks will be seen as a serious option for funding Social Security; however, COLA relief legislation is definitely a serious issue for millions of seniors facing the second year in a row with no cost of living increase.And let?s not forget that the President?s fiscal commission has clearly targeted Social Security for benefit cuts, an increase in the retirement age (which is just another form of benefit cut), indexing or countless other mix-and-match reforms using Social Security funds to balance the federal books. The commission?s proposal, if there is one, will be presented to a lame duck Congress next month. That means many of the pro-Social Security advocates defeated at the polls yesterday–members who are literally packing up their offices–may have to cast one last vote on their way out of town. It?s a vote that could change Social Security forever.
Cast Your Vote
As a non-partisan organization committed to the preservation of Social Security and Medicare, we don?t spend much time blogging on how the political horse race is predicted to end for each election cycle. However, what is important to us is that when you go to the polls you understand how your vote will impact the futures of America?s most successful government programs. Where do the candidates on your ballot stand on privatization and proposed benefit cuts for seniors? Do they believe that the retirement age should be raised as a way to reduce benefits for future retirees? Do they believe that Social Security contributes to the deficit?even though the factsprove just the opposite? Can you separate the political fact from fiction?Before you cast your ballot be sure you know the answers to these questions because regardless of who wins or loses today, it?s clear Social Security already has a target on it?s back. Washington?s fiscal hawks hope the President?s fiscal commission will recommend cuts to Social Security as a way to fix a fiscal mess the program did not create. They further hope a lame duck Congress, potentially full of members who?ve already lost their seats and are no longer accountable to their constituents, will ease the passage of the fiscal commission?s recommendations.So cast your vote?and cast it wisely.
Retired and Bankrupt
As the great recession drags on it?s clear that the average American?s dream of retirement may be just that?a dream. Far from the fiscal hawks? mythology of ?greedy geezers? living high on the government hog or cow, or whatever farm analogy you prefer, it?s clear that a growing number of seniors are facing frightening fiscal futures.There have been a number of stories recently highlighting the realities facing today?s retirees. USA Today wrote:
The ranks of older bankruptcy filers also have been swelling rapidly. From 1991 to 2007, bankruptcy filings by those 65 and older increased by 150%, while filings in the 75-to-84 age group soared 433%, according to the Consumer Bankruptcy Project. Older Americans are staggering under debt because of a variety of problems ? from unexpected job losses late in life and underemployment to overwhelming medical bills and providing financial help to their children and grandchildren, analysts say. Making the issue even more serious: They have little time to climb out of debt, says Matthew Beatman, bankruptcy lawyer at Zeisler & Zeisler in Bridgeport, Conn.
A University of Michigan Law School study examined why Americans over 65 are the fastest growing demographic of bankruptcy filers and reports that seniors blame credit card debt.
And though older bankruptcy filers blame credit cards for their debt, they’re not the underlying cause of their problems. Much of the credit card debt resulted from attempts to supplement lost income. “When people in their 50s are laid off after they have been at the same company for 25 to 30 years, they find things have changed,” says Brian Grogg, a credit counselor at GreenPath Debt Solution in Farmington Hills, Mich. “They need to know more about computers. They find it harder to get a job.” And seniors who rely on Social Security are finding it insufficient. There will be no increase in retirement benefits in 2011 for the second year in a row. — USA Today
As we?ve reported here before, we can not afford to ignore thegrowing Retirement Income Deficit facing millions of Americans. Yet, that?s exactly what?s happening in Washington in the rush to balance the federal books on the backs of programs like Social Security and Medicare.
All Tricks & No Treats from the Fiscal Commission
Washington could have an especially frightening ?treat? for Americans this Halloween. The President?s Fiscal Commission and deficit-hawks in Congress have a terrifying new plan for America?s workers, requiringthem to stay on the job until 70 years old before qualifying for full Social Security benefits.Be afraid?be very afraid?