April 11, 2012
-- by Dave Johnson
This week there was another big attack on Social Security by another elite. This time the attack comes from an elite columnist, other times it comes from Wall Street types, wealthy CEOs or the kind of politicians that have been in DC way too long. These attacks never come from people who depend on these programs (i.e. almost all of us.) Why do the privileged elites hate Social Security so much?
Robert Samuelson wrote this week in the Washington Post, Would Roosevelt recognize today’s Social Security? Samuelson writes that Social Security, "has become what was then called “the dole” and is now known as “welfare.” " He discusses a book that, he writes, "shows how today’s “entitlement” psychology dates to Social Security’s muddled beginnings."
Elites hate "entitlements" -- those things we all are entitled to as are citizens in a We-the-People democracy. Democracies are based on "we are in this together" and "watch out for each other." Plutocracies are based on rule by the elites. These elites especially hate what Samuelson calls "entitlement psychology" -- a state of mind in which 99% of us forget our place and get all uppity about being citizens in a democracy and the things that entitles us to.
Samuelson's core attack on Social Security is that there is no trust fund, that the money has been spent, and it is just a program where working people pay for the retirement of older people,
Millions of Americans believe (falsely) that their payroll taxes have been segregated to pay for their benefits and that, therefore, they “earned” these benefits. To reduce them would be to take something that is rightfully theirs.
And, he restates, while people think they are entitled to their Social Security benefits it really is just "welfare," writing,
What we have is a vast welfare program grafted onto the rhetoric and psychology of a contributory pension. The result is entitlement.
The "rhetoric" and "psychology" of "entitlement." Public pride in We-the-People democracy. Gotta stamp that out!
(Samuelson, for some reason, does not talk about how the military budget trust fund is depleted and we need to cut back on the trillion-or-so we will spend this year, how it is bankrupting us, etc. Oh, wait, there isn't a trust fund at all for military spending... we just spend it.)
Dean Baker Responds
Dean Baker answered Samuelson, writing in Robert Samuelson Shows that the Post Has no Fact Checkers on Its Opinion Pages,
Social Security and Medicare are hugely important for the security of the non-rich population of the United States. For this reason, Robert Samuelson and the Washington Post hate them.
As we know, this is a question of basic political philosophy. In the view of Samuelson and the Post, a dollar that it is in the pocket of low or middle class people is a dollar that could be in the pocket of the rich. And Medicare and Social Security are keeping many dollars in the pockets of low and middle class people.
Regarding Samuelson writing that the funds were not segregated, and have been spent,
Of course Samuelson is 100 percent wrong here. Payroll taxes have been segregated. That is the point of the Social Security trust fund and the Social Security trustees report. These institutions would make no sense if the funds were not segregated.
Samuelson is welcome to not like the way in which the funds were segregated, in the same way that I don't like the Yankees, but that doesn't change the fact that the Yankees have a very good baseball team. Since its beginnings, the government has maintained a separate Social Security account. Under the law, no money can be paid out in Social Security benefits unless the Trust Fund has the money to pay for them.
In this sense, the funds are absolutely segregated. Samuelson doesn't like this, but why should any of the rest of us care? The rest of the piece shows the same dishonesty and lack of respect for facts.
Jared Bernstein Responds
In WaPo WAY Off on Social Security Jared Bernstein writes,
Here are the relevant facts about Social Security’s future (as we at CBPP see them):
–The trustees estimate that the combined Social Security trust funds will be exhausted in 2036 —a year earlier than they forecast in last year’s report.
–After 2036, Social Security could pay three-fourths of scheduled benefits using its annual tax income [Samuelson implies all benefits expire in three years!]. Those who fear that Social Security won’t be around when today’s young workers retire misunderstand the trustees’ projections.
–The program’s shortfall is relatively modest, amounting to 0.8 percent of GDP over the next 75 years (and 1.45 percent of GDP in 2085). A mix of tax increases and benefit modifications — carefully crafted to shield recipients of limited means and to give ample notice to all participants — could put the program on a sound footing indefinitely.
–The 75-year Social Security shortfall is only slightly larger than the cost, over that period, of extending the 2001 and 2003 tax cuts for the richest 2 percent of Americans (those with incomes above $250,000 a year). Members of Congress cannot simultaneously claim that the tax cuts for people at the top are affordable [or like the Ryan budget, add trillions more in tax cuts] while the Social Security shortfall constitutes a dire fiscal threat. And the shortfall is well under half the cost over 75 years of making all of the 2001 and 2003 tax cuts permanent.
Elites Hate It, Hate It, Hate It
At Balloon Juice, the first comment following John Cole's post, It Will Never Make Sense To Me nails the real reason the elites hate Social Security so much. Cole writes in the post that it will never make sense to him ...
Why our elites and media elites have such sheer contempt and hatred for social security. It’s there for everyone! It’s a solid government program which gives everyone the peace of mind that no matter what, there will be some money available for you to take care of yourself in your most vulnerable years. It’s such a miniscule portion of the taxes we pay, and for the ultra-rich screamers who hate social security the most, it’s a negligible portion of their income, and it’s capped! It’s not money wasted on fraud and abuse, it’s extremely efficient with the kind of overhead any charity or organization in the world would die to achieve, and it’s just an amazing program.
Actually that's the reason they hate it. But the first commenter nails it, writing,
They hate it because it works; Social Security is proof that government is capable and competent. That is why it MUST be destroyed.
For elites this is the problem. Government works, and that tells We, the People that we don't have to depend on elites. That really is why the elites hate Social Security: Because it works.
Posted by Dave Johnson at April 11, 2012 11:34 AM
This is a dangerous game because once you throw SS in with the Income Tax the math becomes clear that our tax rates are regressive with the highest rate at the SS cut-off. The middle-class is going to be angry if this is made known to them.
Posted by: D at April 11, 2012 12:03 PM
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