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Privatizing Social Security Again?
Heaven forbid that plans prevail to invest a certain amount of those checks in the stock market, as many pension plans have taken a bath in the current meltdown. While there have been past GOP plans to partially privatize the program, fortunately they have all failed. So far the Social Security trust fund remains tempting for the gamblers and other risk takers on the market.
As a Detroiter, I remember the Great Depression and the stock market crash of 1929 when some of the plutocrats on Wall Street jumped out of windows as a result of their great losses. Those were bleak days when some of the jobless workers also lost hope in the bitterly cold winter as they stood in long lines at the Ford Motor Company, many without overcoats, hoping for a job on the auto assembly lines.
The movements for socialism and communism were given some credence as a way out of their misery.
The difference between the Great Depression and the current Great Recession is "spirit" - during the 1930s Americans cared about each other. They flocked to Washington - teachers, social workers, doctors and nurses - selflessly offering their services.
Next door to us, a family with six children lived on a $13 (equivalent to $163 today) per week welfare check. Somehow they survived and kept their faith. Along came FDR who told the stricken people, "You have nothing to fear but fear itself." The power of hope restored confidence in the country and in its leadership.
We were happy to emerge from the depression, but many Americans at the time believed we rebounded economically because of the looming clouds of World War II. The world by this time was swept up by the "isms." The U.S. was divided between the interventionists in World War II (on the side of the allies) and the non-interventionists - they were the isolationists - who disappeared at the start of the war on Dec. 7, 1941.
President Roosevelt signed the Social Security Act into law in 1935 to cover the elderly, and eventually through amendments, widows, orphans and the disabled. Payments are split 50-50 by the employer and the worker. What has been missing in our current society is compassion and creativeness. Think of the bargains the President had to strike to renew the biggest (Bush) tax cut to the richest Americans, this in exchange for an extension of unemployment compensation for the millions who lost their jobs - some deal! That's the compassion part.
As for creativeness, where are the ideas to put people back to work? For Roosevelt, the caring advisors produced a bundle of alphabet agencies. Not the least was the Works Progress Administration which put people to work on rebuilding the broken infrastructure. The program put men on the streets - and even artists painting the walls of great buildings in the Nation's Capital. Ideas and ideals along with great imagination brought our country back. Where are the caring creators now?
Many believe it was World War II and the military needs that brought us back - but recovery was well underway by 1941 when the Japanese attacked Pearl Harbor.
According to the 2010 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance (OASDI) Trust Funds presented to Congress, 53 million Americans received benefits during 2009, including 36 million retired workers and dependents of retired workers, 6 million survivors of deceased workers, and 10 million disabled workers. During that same year, an estimated 156 million people paid social security taxes through payroll. Total expenditures in 2009 were $686 billion, while revenue totaled $807 billion - including $689 in tax revenue and $118 billion in interest earnings.
Many Republicans believe the Social Security Trust should be at least partly privatized - Bush failed to achieve this 2005. There is fear as President Obama has claimed that the new Republican leadership will push again to partially privatize social security funds. With the ups and downs of the stock market - and considering the pension plans that were privatized went down the drain - who would lead us down that path again?
Let's not give the newly empowered Republicans - and their blindsided tea party allies - the ability to wipe out or even mitigate the only economic security deprived Americans can count on. Where is their heart?
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57 Comments so far
Show AllBoth of you are wrong. Several economists had predicted that at least a recession if not a depression would return after the end of the war. The New Deal did not end the Great Depression. It made it less miserable which was a great plus. The war did not end the Great Depression either. Ends of wars never stimulate the economy. Two factors did it. One was the significantly increased earning power of the middle class owing to the rise of wages during the war. The other was a huge increase in the production potential of houses, apartments, cars, and household goods.
My issue with your first point is this. The middle class is shrinking thanks to the New Deal being systematically whittled down so even if what is left of the middle class had a huge increase in earning power, what about those pushed into the lower class who used to be in the middle class?
Your second point I can agree with except for one thing. Today, production at large is still going on but just not be here in the USA thanks to "free" trade and outsourcing for cheaps. Are you suggesting that if we go less materialistic and more frugal that we are culprits of the Great Depression?
Furthermore, I see your point on the two factors but how would they have happened without the New Deal? Please correct me if I am wrong but I assumed that the New Deal made that middle class you described in both of your points possible.
Another good, and important, Helen Thomas column.
In 1968 LBJ mixed the separately funded SS budget with the general federal budget to conceal the costs of the Vietnam War. Separating it back out reveals that military spending, for both current and past, now consumes about two thirds of the total general federal budget.
But not everyone pays. All income over $106,800 is exempt from SS and every bit of "unearned income" (income from profits, rents, interest, etc.) is exempt from both SS and Medicare. If you eliminated those two LOOPHOLES there would be sufficient additional funds to fully fund a single payer health care system for all Americans, probably adding dental and optical care as well at current spending levels.
On the other hand, if costs were controlled at average OECD levels, there would already be sufficient spending without even taking this obvious step to fully fund the same system.
You (Helen) asked, "Where is their heart?"
You likely don't look in those places, but TSA does.
Thank you , Helen:
That word "Compassion" says it all. Can a nation or world exist without it? No.
Thank you for saying that word, because it's the one word that can break through the insanity.
http://whatreallyhappened.com/WRHARTICLES/wildbankers.php
Perhaps the above link will help in understanding
President Obama is touted to be very intelligent. With regards to Social Security he is actually among the dumbest of stupid politicians. One of the differences between the Great Depression of the 30's and our current one is Social Security. These are funds piled up, albeit insufficiently in my view, during the 'good years' and are now available in the 'bad years' for spending by SS recipients*. Social Security is a recession buffer. When President Obama recently ordered a 30 percent reduction in the funding collection for SS to be included in his infamous tax-cut-continuation bill, a cut that will remain forever, he marginally stimulated the current economy but put at risk future recessions/depressions which are sure to come sooner or later.
* President Obama is also touted to be a deeply religious man. Perhaps he ought to read again the story about Joseph and the Egyptian ruler in the Old Testament.