January 1, 2011
This morning’s New York Times carried a story: “Boomers Hit New Self-Absorption Milestone: Age 65” by Dan Barry that noted that the oldest of the boomers will hit official old age this year. It is a noteworthy demographic fact to comment upon.
If I had been writing the article, I would have made a central theme out of the insecurity of boomer retirement, since their generation—I just missed it by being a late war baby—was massively subjected to having secure traditional pensions replaced by shaky 401(k) stock market investment schemes.
Instead, the only comment Barry made about boomer retirement was in passing:
“About 13 percent of the population today is 65 or older; by 2030, when the last of the baby boomers are 65, that rate will have grown to 18 percent. In addition to testing the sustainability of entitlement programs like Social Security, this wholesale redefinition of old age may also include a pervading sense that life has been what might technically be called a ‘bummer.'”
It is a testament to the success of propaganda campaigns by the opponents of Social Security that journalists like Barry take it for granted that its fiscal sustainability is problematic. Nowhere did he mention that 401(k) were a problematic vehicle for retirement security.
The only danger to Social Security’s sustainability is political not economic: if national politicians do the bidding of the financial services industry and reduce or eliminate its major competitor for retirement savings.
–James W. Russell
It amazes and troubles me to see such widely spread misconceptions. Almost every American I speak to regarding Social Security basically deems it as an insolvent program, incapable of recovery, and a large part of our national debt.
What folks don’t seem to understand is that the only main trouble that Social Security really faces is the same problem that is cause for our growing national debt: political will to undercut tax revenues on a large scale. Just a few weeks ago, the Bush-era tax cuts were extended for another two years by President Obama and a Right-leaning Congress. The 75 year cost of those tax cuts (represented as loss of revenue) is the same size as the cost of the entire Social Security program over that same time span.
It seems that this is the strategy of the Right: to cut revenues so savagely that governance and therefore regulation is impossible. They are determined to reframe the debate. They want the balance sheet of the United States as a whole, and that of important government institutions like Social Security, to be in the red. Once this is accomplished, they can frame the debate for cuts around our dire need for “fiscal responsibility.” They are actively bankrupting important social programming so that the cuts they propose seem like the only solution.
I am not making this strategy up myself. Republican Senator Jon Kyl of Arizona has recently gone on record as saying that “you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans.”
Most individuals in the American public fail to realize that it is fiscally insane to support these tax cuts. Hopefully, this blog helps to inform people that their elected officials subscribe to the modern Right-wing ideal of obeying the financial services sector’s bidding at the expense of American retirees. I thank you Dr. Russell for your tireless research on this topic. Your article “Retirement Crisis in the United States”, found in Volume 24 Issue 2 of the Socialism & Democracy journal, does a great job debunking the myths surrounding Social Security as well as explaining the tax revenue issues that underscore the true assault the program is currently weathering.
I agree that it is a very cynical strategy of the right and Republicans to bankrupt the federal government so that there are no funds to initiate, expand, or maintain domestic programs that compete with the private sector. Social Security competes with the private 401(k) accounts that Wall Street offers. I should say outcompetes because Social Security delivers a better rate of return for less cost.
P.S. That is, bankrupt the federal government except for military spending.