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September 9, 2010

Social Security: Policy By Fairy Tale

-- by Dave Johnson

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Lots of kids believe in Santa Claus. This is because people repeat the fable to kids over and over, telling them that Santa Claus will deliver presents to them if they're good. And then there's the Boogeyman, the "amorphous embodiment of terror." In some regions stories of the Boogeyman are repeated and repeated, and to keep the Boogeyman away little children do what they are told.

A popular Boogeyman is "Social Security is going broke." This fable originated from a 1983 Cato Institute Journal document, "Achieving a Leninist Strategy" by Stuart Butler of Cato and Peter Germanis of the Heritage Foundation. The document laid out a long-term strategic plan to dismantle Social Security. Part of the idea was to manufacture public beliefs like those we hear repeated (and repeated and repeated) today, "Social Security is going broke" and "Social Security is a Ponzi scheme."

Meanwhile a popular Santa Claus myth tells the pubic that energy independence can be achieved at low cost if only we would open up more land (and sea) to oil drilling.

Enter Rick Berg, candidate for Congress in North Dakota. Berg is proposing to scare away the Boogeyman by bringing in Santa Claus to fight the good fight. News story, Berg proposes Social Security fix,

Drilling for oil underneath western North Dakota’s Theodore Roosevelt National Park and other federal lands nationwide could be a way to ensure Social Security funding for the long haul, Republican U.S. House challenger Rick Berg said.

During a meeting with The Forum’s editorial board Wednesday, Berg discussed his ideas for how to make the Social Security system viable for future generations. He said one option is drilling for oil and other mineral resources on federal government land.

Oh yeah, there is one more thing that is repeated over and over. The other day I wrote, "The way a lobbyist argues for or against anything today is to say it will create or cost jobs." And right on queue, here's Berg:

Berg told the editorial board his proposal was just one way the government could add more money into the Social Security system.

“It needs to be solvent, and I’m supporting putting more money in that — mineral money in there — and getting people working again,” he said.


Yes, that's the ticket. Santa Claus fights the Boogeyman, and delivers jobs. All we have to do is open up national parks to oil drilling.

Social Security isn't broke, doesn't need fixing, and the last thing we need is more drilling. We need a Renewable Energy Standard and we need to set a price on carbon to trigger the new green technology revolution, get us off of oil and coal and create millions of jobs.

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Posted by Dave Johnson at September 9, 2010 11:49 AM


Comments

I agree totally with your sentiments, but a big part of the story is missing. The Social Security status is not nearly as simple or clear as most people believe. I have spent the past ten years trying to help save Social Security, as we now know it, by exposing the great Social Security scam.

I am very familiar with 1983 Cato Institute Journal document, "Achieving a Leninist Strategy" by Stuart Butler of Cato and Peter Germanis of the Heritage Foundation. I introduced the plot to the public by devoting an entire chapter to it in my 2005 book, "Social Security: The Attempt to Kill It."

Something else happened in 1983 that would have a much bigger impact on the future of Social Security than the Cato Institue and the Heritage Foundation, combined. The Social Security Amendments of 1983 included a hefty payroll tax increase that was supposed to "fix" Social Security. The baby boomers were required to prepay most of the cost of their own benefits, in addition to paying for the benefits of the generation that preceded them. That 1983 payroll tax hike has generated $2.54 trillion in surplus Social Security revenue, that was supposed to be saved and invested so that it would be available for paying benefits to the baby boomers. If the intent of the law had been followed, and the surplus revenue had been saved and invested, Social Security would be able to pay full benefits until at least 2037. BUT NONE OF THE MONEY WAS SAVED OR INVESTED IN ANYTHING! Instead,every dollar of the $2.54 trillion was "borrowed" or "stolen" (whichever word you prefer) by the government and spent on tax cuts for the rich, wars, and other government programs. Enough taxes have been collected to pay full benefits until 2037, but those tax dollars have already been spent on other things. For more information, please visit my website at www.thebiglie.net.

Allen W. Smith, Ph.D.
Professor of Economics, Emeritus
Eastern Illinois University
Email: ironwoodas@aol.com
Phone: 1-800-840-6812

Posted by: Allen W. Smith, Ph.D. [TypeKey Profile Page] at September 9, 2010 7:28 PM

I agree totally with your sentiments, but a big part of the story is missing. The Social Security status is not nearly as simple or clear as most people believe. I have spent the past ten years trying to help save Social Security, as we now know it, by exposing the great Social Security scam.

I am very familiar with 1983 Cato Institute Journal document, "Achieving a Leninist Strategy" by Stuart Butler of Cato and Peter Germanis of the Heritage Foundation. I introduced the plot to the public by devoting an entire chapter to it in my 2005 book, "Social Security: The Attempt to Kill It."

Something else happened in 1983 that would have a much bigger impact on the future of Social Security than the Cato Institue and the Heritage Foundation, combined. The Social Security Amendments of 1983 included a hefty payroll tax increase that was supposed to "fix" Social Security. The baby boomers were required to prepay most of the cost of their own benefits, in addition to paying for the benefits of the generation that preceded them. That 1983 payroll tax hike has generated $2.54 trillion in surplus Social Security revenue, that was supposed to be saved and invested so that it would be available for paying benefits to the baby boomers. If the intent of the law had been followed, and the surplus revenue had been saved and invested, Social Security would be able to pay full benefits until at least 2037. BUT NONE OF THE MONEY WAS SAVED OR INVESTED IN ANYTHING! Instead,every dollar of the $2.54 trillion was "borrowed" or "stolen" (whichever word you prefer) by the government and spent on tax cuts for the rich, wars, and other government programs. Enough taxes have been collected to pay full benefits until 2037, but those tax dollars have already been spent on other things. For more information, please visit my website at www.thebiglie.net.

Allen W. Smith, Ph.D.
Professor of Economics, Emeritus
Eastern Illinois University
Email: ironwoodas@aol.com
Phone: 1-800-840-6812

Posted by: Allen W. Smith, Ph.D. [TypeKey Profile Page] at September 9, 2010 7:29 PM

We should end the greatest entitlements now, because the vastly rich 1% or so who get them don't even need them.

Social Security is not one of them, that is, it is insurance not an entitlement.

Posted by: Dredd [TypeKey Profile Page] at September 12, 2010 5:25 AM

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