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“Social Security is Broke”—and Other Corporate Scare Tactics
For years, corporations have been peddling myths to rally us behind their interests. Here are three things everyone “knows,” and why they're wrong.
Winston Churchill reportedly said, “A lie gets halfway around the world before the truth has a chance to put its pants on.” That was before corporations had perfected the art of public relations, investing millions of dollars in PR campaigns to advance their commercial and political interests.
A demonstrator at Occupy Wall Street shows how corporations talk. Their “speech,” Lisa Graves says, has left us believing a lot of things that aren’t true. (Photo by Stephen O'Byrne)
The fact is, there are a number of things most people know are true—except they’re not. That’s the result of well-planned, well-funded, long-term propaganda campaigns designed to make people believe things that are against their own best interests.
One relatively new example is the climate denial industry, which is funded by some of the richest corporations and CEOs on the planet to protect their profits from regulations that would address climate change. Although it’s one of the biggest threats we have ever faced, an increasing number of Americans believe there is widespread disagreement in the scientific community about climate change.
But that’s not true—there is actually widespread scientific agreement on climate, and a few dissenters, most paid in some way by the oil industry. Millions of dollars have been spent to create the appearance of disagreement, including deployment of so-called experts and even TV meteorologists to repeat talking points favored by big oil.
In the past year, the Internet and social media have brought together social movements across the globe, and there are signs that, in this new information age, people are breaking through the fog of corporate disinformation. But some of the “facts” have been repeated for so many years that a lot of people still think they are true.
“Social Security is Broke”
—The Cass City Chronicle (Jan. 22, 1976)
For more than 30 years, opponents of Social Security have peddled this lie.
The roots of the efforts to attack Social Security run deep in the far right. They include CEOs such as Fred Koch, who promoted the John Birch Society’s red-scare-era smears that such New Deal reforms were “socialist” or “communist.” In the 1970s, Fred’s sons, Charles and David, inherited his billions—and his ideas. Charles began funding think tanks to develop arguments for dismantling Social Security.
David ran for vice president on the 1980 Libertarian ticket with a platform that included privatizing Social Security. Since then he’s spent millions on groups to push disinformation about Social Security and promote an array of sophisticated corporate propaganda. The donations of Koch Industries and others to groups like the American Legislative Exchange Council (ALEC) that promote claims that Social Security is going broke have paid off. Also, as detailed in SourceWatch, billionaire Peter Peterson has pledged a billion dollars to attacking Social Security. And, guess what? Almost all the current crop of GOP presidential candidates have called Social Security a scam.
The truth is that Social Security wasn’t broke in 1976, and it’s not broke today. According to trusted actuaries, in about 25 years Social Security could face a shortfall—a gap that would allow it to pay most but not all of the earned benefits—unless it’s fixed.
One easy solution is to apply Social Security taxes to all earned income. Under the current system, any wages over the first $106,800 are exempt from Social Security withholding. If we close this loophole soon, the potential shortfall would be solved. Only about 6 percent of Americans earn that much, and removing this exemption would help ensure that the other 94 percent have the protection of this basic social safety net for decades to come.
Tort Reform “Creates Jobs” —Wisconsin Gov. Scott Walker, ALEC alum
The first controversial bill Gov. Walker signed into law last year wasn’t his union-busting effort but a “tort reform” package he claimed would “create jobs.” This omnibus bill, which included numerous items that echo “model” bills from the ALEC bill factory, was rushed through so fast most folks barely had time to read it. But the U.S. Chamber of Commerce immediately applauded the bill and so did ALEC. Such legislation is on the wish list of the global corporations funding these groups and many politicians.
Tort reform is a made-up phrase that really means changing the rules for Americans killed or injured by corporations or other defendants. It’s been making its way through states across the country based on claims that it will create jobs, protect access to medical care, and bring down insurance rates.
But legal changes like those in Wisconsin make it harder for Americans to hold a company or careless physician responsible for all the damages caused by their negligence. Such changes make it harder for juries to punish companies to help deter egregious and deadly corporate acts.
Such bills are often pushed based on claims that corporations fear getting “unfairly” sued. But changes like those in Wisconsin have nothing to do with frivolous lawsuits. Caps on damages, for example, apply only after a jury of American citizens has heard the facts and found the company was responsible for the harm.
Plus, there is no conclusive evidence that these changes to the law create jobs. In Wisconsin, for example, Walker claimed his tort reforms and other changes would create 250,000 new private-sector jobs, but the state ended last year with five months in a row of job losses.
The reality is that surveys of local businesses about what would lead them to hire more people reveal that the answer is more sales, not less litigation. In Wisconsin, for example, in a survey of state businesses about what would improve business, tort reform was dead last.
Tort reform is just more of the race to the bottom, pitting state against state to protect their citizens the least. The reality is that ALEC and the U.S. Chamber are bankrolled by global corporations trying to pay American workers the least, provide workers the fewest rights and benefits, and compensate as little as possible for consumers who are injured.
Lives and livelihoods are the real costs of tort reform, which is being sold through calculated corporate disinformation.
We Need the Keystone XL Pipeline for Our “Jobs and National Security”
—Jack Gerard, CEO of the American Petroleum Institute
The richest industry on the planet is putting money behind claims that controversial energy projects, from natural gas fracking to the Keystone XL pipeline, are essential to our national security. Americans are vulnerable to such claims as gas prices rise in response to another round of saber-rattling in the Middle East.
People have been bombarded with corporate-backed claims that national security demands immediate approval of the controversial Keystone XL pipeline connecting the Alberta, Canada, tar sands to the Gulf Coast in Texas. But the claims are misleading.
First, the crude oil from the dirty tar sands extraction process comes from Canada, not the United States, so the oil does not belong to the American people. The oil is not Canada’s either. Rights to it have been sold to multinational companies whose interest is the highest price.
Second, take a look at the map of the proposed pipeline. Its target is the refinery world of Port Arthur, Texas, which is focused on exporting oil via the Gulf of Mexico. Refiners in Texas on board to process tar sands crude include Royal Dutch Shell, the Saudi government, and the French oil company Total. A Texas company, Valero, which operates in a “Foreign Trade Zone” in Port Arthur, which limits customs duties, has pitched investors on exporting the diesel from tar sands crude while importing gas to America.
Don’t believe the corporate propaganda on jobs either. In an earlier phase of the pipeline in South Dakota, almost 90 percent of the 2,500 jobs were filled by workers not from that state, and most of the jobs were low-wage and temporary, according to testimony from TransCanada, the pipeline’s developer.
To Tell the Truth …
These are just a few examples. If you want to find out more on these issues and corporate PR techniques, check out our research and resources at PRWatch.org, SourceWatch.org, and ALECexposed.org.
Despite the gloomy picture of the success of some of these propaganda campaigns, there is hope. The Keystone XL pipeline looked like a done deal. But demonstrations at the White House led by 350.org that resulted in 1,253 arrests, combined with citizen outcry in the heartland states the pipeline would cross, resulted in denial of the permit to build. The day after the Obama administration announced that decision, a group of politicians held a press conference. You guessed it: They said that stopping the pipeline threatened jobs and national security.
And, as economist Dean Baker points out, for all the hostile rhetoric over the years, Social Security is undamaged so far, although this guaranteed pension is difficult to live on alone, since it has not been fully funded by including all wages in withholding over the years.
We’re up against big, rich opponents. But at least if you know the truth, the next time you hear someone say, “Social Security is broke,” you can say, “No it’s not.” And even explain why.
Lisa Graves wrote this article for 9 Strategies to End Corporate Rule, the Spring 2012 issue of YES! Magazine.
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45 Comments so far
Show AllUm...Social Security IS broke. The "Trust Fund" surplus from the past 25 years was invested in U.S. Treasuries, meaning government debt. The only way those securities can be used to make up the current imbalance in payments in the program (which has been exacerbated by Obama's payroll tax cut), is to redeem those Treasuries, which directly adds to the federal deficit. This is not a liberal/conservative issue, but a matter of the country's finances being in dire straits because of decades of reckless fiscal mismanagement by both parties.
Hey are you the same Bill Hicks that posts over at hubberts-arms? If so, welcome aboard!. If not, then I slowly back away looking embarrassed because you looked like someone I knew, but I was wrong...
In my former life as a corporate whore before my job was outsourced, I made enough money that by the end of the year I had reached the social security max income, and they stopped collecting the payroll tax from me. At the time I didn't even know they did that, and I was pretty shocked. In my still quite naive mind I couldn't figure out why they would stop me from contributing to SS when I was obviously making enough money that there would be absolutely no hardship on my part to continue to contribute to the program to help others.
The level of selfishness and greed in this country is staggering and disgusting. Think about all the fighting that is going on now on, especially by the republicans, to be sure that taxes on the top 1% don't get raised by 2% or 3%. They wouldn't even miss that money.
In a country that has so many people living in poverty, they should be hanging their heads in shame.
Obama's comments marking the 75th Anniversary of Social Security in August 2010 were limited to "the Republicans want to privatize Social Security". Within six months Obama enacted his "payroll tax holiday" that defunds Socail Security and will make it easier to privatize.
A real "hope and change" president would have marked the anniversary with a demand that Congress eliminate the contribution cap that Lisa Graves mentions.
Hi Tom -- yep, it's me. Thanks for the welcome! :)
Or better yet, hanging by their necks in agony
Tom, psychopathic predators know no shame. This is the trait that makes them psychopathic predators. dh
Opps, double post
Also it doesn't really matter if it's held in bonds, fiat dollars, or any paper type currency because face it, it's all funny money being pulled out of thin air. For example how many trillions did the Fed "create" durning QE1 and QE2? Is that any more "real" than SS Bonds?
The Federal Reserve gives "newly minted" money to banksters every day that they use to speculate on energy and food, thereby driving up the costs that we pay. The US Government then excludes "volatile energy and food costs" when they calculagte the rate of inflation, thereby assuring that the working class earns less each year than the previous year.
Yes, such flights of fantasy Ponzi schemes are USUALLY illegal
For more, see Mar 20 2012 - 8:52pm
The END the FED movement, is exactly about changing the century old law that made such legal, in a well camouflaged criminal conspiracy (govt / private collusion) to massively defraud the public repeatedly while ONLY supposedly guaranteeing the end of financial cycle upsets (which are only more regular and predictably profitable now)
You put your money in the bank. The bank invests that money in all kinds of things. A lot of it is loaned out and that money is still owed to the bank; according to your logic, that means you're broke. Your analysis is way oversimplified. Fact is, money never sits still. It's always moving around. A lot of wealth is just numbers on paper. Your bank statement just means the bank owes you that much; they don't have it in a drawer with your name on it. But the bank will give your money back when you want it. And Ms Graves is right-- any future shortfall would be removed by lifting the cap on Social Security.
That's exactly right. Furthermore, U.S. Treasury bonds are far more secure than any private bank account.
U.S. Treasury bonds are backed by the "full faith and credit" of the United States, and are considered to be the safest investment in the world. That's why Wall St. banks and foreign countries like Japan and China buy them. And that's why even more money began flowing into U.S. Treasuries in late 2008 when the world financial system imploded. The U.S. has never defaulted and it never will, and the world's smartest investors know it.
The only way that the U.S. Treasury would not repay Social Security is if Wall St. and their bought-and-paid-for politicians, shills and PR drones (like Bill Hicks) succeed in persuading voters to acquiesce in a change in the law relieving that obligation. That's why they are peddling the ridiculous canards that Social Security is "broke," and privatization (handing the Trust Funds over to Wall St.) is necessary in order to "save" Social Security. We must remain vigilant in defense of the facts in order to defeat that PR campaign.
See Social Security Trust Fund FAQs: http://www.ssa.gov/oact/progdata/fundFAQ.html#n8
One more thing, this Lisa Graves article is weak in it's defense of Social Security when it states "in about 25 years Social Security could face a shortfall." Yes, it COULD face a short fall in 25 years. More accurately, if no changes are made to the system at all, such a shortfall is expected to occur SOMETIME BETWEEN 25 and 75 years from now depending on varying "economic and demographic assumptions." And, even if the trust funds were allowed to become depleted 25-75 years from now, annual income from payroll taxes, etc. would still cover 75% of benefits.
Furthermore, there are known solutions for adjusting the program for the long term (beyond 25-75 years) which do not include benefit cuts or delayed retirement.
Basically the excess SS funds are an extra tax on the poor and middle class workers.
The phony left and the rabid right always peddle the the BS about "the bottom 45% don't pay taxes."
Bullshit - they pay property taxes even if they are renters, they pay sales taxes, car reg taxes, gas taxes, cell phone taxes, FICA taxes etc
When all those taxes are added up the poor and middle class pay Much Higher rates than the wealthy do. Even if they don't pay state and federal income taxes - which most do.
Social Security is NOT broke --
Uncle Sam might decide to becone UNCLE SAM "DEAD BEAT" and steal the money from the public, but who else will invest in America if they do that?
And Wall Street and corrupt politicians want to get their hands on Social Security
because it's broke? ROFL
RW has spent tens of millions and more on propaganda in an effort to undermine Social Security ... becuase it's broke? ROFL ROFL
Capitalism is fascism -- a Zombie walking the land. Time to bury it.
No corporation has a birth certificate. No corporation breathes.
No corporation exists without being licensed by government.
Let's move on to socially responsible government.
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A serenade for thread readers. Transposition from the personal to the systemic vernacular 'The Man' - Aretha Franklin seems all too appropriate - (unedited version) http://www.youtube.com/watch?v=PK155B24Mqc&feature=related
and then - just a little Respect
http://www.youtube.com/watch?v=cYbs_O_iMfU&feature=related
Thank you. If we can't get away from the talking points in lock step with whoever we back, we are doomed. Are the Koch brothers worse or better than George Soros? Does it depend on your ideology, or can we agree the movers and shakers are keeping their power in a myriad of ways.
so let's take it out on the people that have been paying in for a lifetime. With all the corporate subsidies and military extravagence and disappearing trillions and bank bailouts and nation building this country does you would think we could find some money to fund the social promises these creeps keep using to get elected. Never seems to be a shortage of funds for war or regime change or aid to israel. Tax the f-u-c-k-ing church! Problem solved!
That is a good idea, tax these self righteous bastards that are millionaires and have a tax exempt status. I get so sick of them begging for money while standing next to their gold piano and wearing hundreds of thousands worth of rings and jewelry. Try any Christian tv channel, with in five minutes there will be a begging money crusade! Fucking thieves!
Your straw-man arguments are a purposeful distraction and undermine real democracy, per what is explicit in the Constitution (who gets the interest income -- from Constitutional public vs. the public's devastating absurdity of private money).
It is far FAR worse than merely being a result of :
"decades of reckless fiscal mismanagement by both parties."
The END the FED movement recognizes that for a century, the banksters have been egregiously lying to and defrauding the public, in collusion with govt officials also directly benefiting from purposeful cycles of pump/dump wealth transfer (which is the advertised and supposedly presumed purpose of the FED, that has never worked as promised with huge cycles wrecking havoc every 6-10 years).
see Mar 20 2012 - 8:52pm
and Shoe Thrower's comments above that
Lisa Graves is very wrong to promote the notion that the Keystone pipeline has been stopped.
The so-called "stopping" of the pipeline is just part of the toxic dog and pony show which this article seems to be criticizing.
It is most noteworthy (and typically liberal) that this article, while supposedly being objective, specifically avoids showing how these deceptions and attacks are promoted by republicans, democrats, and libertarians together.
Yes! magazine seems to be The Nation magazine with cheerleading pom pons.
Even if Keystone is never built , Alberta tar sands oil will get to international markets by way of Prince Rupert or Vancouver, British Columbia, or Hudson's Bay when climate change melts the winter ice there.
Social security was broke when it was started. The workers paid in enough social security tax to pay social security out to seniors. It's worked like that since the 1930s.
If everyone stops paying in social security tax then social security is broke. Oh wait, that's what we're actually doing!
Social Security was NEVER broke ...
Social Security was set up to be -- and is still intended to be -- A "PAY AS YOU GO" SYSTEM system -- specifically NOT TO RUN A SURPLUS.
Granted there were always a few bucks in the fund -- HOWEVER, THE IDEA TO CREATE A SOCIAL SECURITY SURPLUS WAS TO CREATE A SLUSH FUN FOR ELITES ... FOR TAX CUTS FOR RICH AND FOR WARS AND OTHER NECESSITIES FOR THE RICH.
Via "baby boom" lies and other propaganda, corrupt government officials moved the burden of Social Security onto the shoulders of the poor and middle class --- and the RW stole $80 BILLION and $100 BILLION a year and more -- every year -- for decades from Social Security via this SLUSH FUND.
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There were two bipartisan agreement to steal the money to pay for the payroll tax cuts from the social security trust fund and we know this money will never be put back so the two corrupt parties are well on their way to destroying social security. Obama also offered to weaken social security during the debate on the debt ceiling so no matter which party is elected next november social security will be weakened and destroyed.
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TRUE -- we have two corporate parties which have been colluding together for decades -- in 1974 with Democrats in full power -- presidency and both houses of Congress -- the Democrats colluded with the GOP to break the tax code for the benefit of the rich.
See: Wm. Greider's "Who Will Tell the People?"
And we've had even more specifically more than 20 years of the norotious RW Koch Brosl infiltrating the Democratic Party via the DLC set up by Clinton and Gore whereby
they influenced the selection of Democratic candidates and the party agenda.
And ... the criminal Pfizer and Chevron also funded the DLC.
Hillary Rodham Clinton is part of DLC leadership -- and whatever Obama wants to call
himself, he is certainly a corporatist.
Let's move this HUGE LIBERAL VOTING BLOC to a liberal third party.
Voting for the "lesser evil" has only ever moved the Democratic Party further to the right and moved Congress further to the right.
LIBERALS SHOULD MOVE TOGETHER TO SUPPORT A LIBERAL THIRD PARTY.
************************************************************************************************
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Yes, yes, yes, you're absolutely right but there are too many fools in the "liberal" class who are mere sycophants. They fall for the Red team vs. Blue team every time as well as the "lesser of the two evils" con.
It's over.
>>The roots of the efforts to attack Social Security run deep in the far right. They include CEOs such as Fred Koch, who promoted the John Birch Society’s red-scare-era smears that such New Deal reforms were “socialist” or “communist
Let us at least be honest here. Social Security IS a socialist program. As is Medicare. As is the Public Education system. The first step towrds "recovery" is not trying to sell the idea that these programs are not SOCIALIST it is selling the idea that they ARE.
The "payroll tax holiday" stunk when they first came up with it and it stinks even more now. The way both political parties are treating the "payroll tax holiday" as Untouchable is a very ominous sign. Both parties believe (falsely, I think) people will turn against them if they don't give them their little bribe, which is nothing more than taking money out of their retirement fund pocket and putting it in their spend-it-now pocket. Originally this was presented as a temporary stimulant to the economy, and perhaps it was, but to continue it is to start eating away at the foundation of Social Security.
Very true. Of course most people don't think "long term". They accept the money "now" as a great idea forgetting that when it comes time to retire, there will be less money for them to retire on because they spent it "now". Social Security is really a system of "paying it forward" where the workers support the retired. With the promise when it comes time to retire those working will help pay for your retirement. Of course the Republicans would like to have that money for themselves so that they could spend it on more wars. Or to cut taxes on the rich further yet. Why anyone but a rich person would ever vote Republican is beyond me...
Even worse-- the failure to think about the future goes much further. The Republicans (and their ilk- some Democrats and Independents too, lord knows) would spend the entire Earth's capital now-- and they're busy doing it-- i.e. the clean environment, the life-giving forests, the oceans, the air, the clean & fresh water, the interdependent web of species-- they would give up the very future of life itself for some CASH now.
There's plenty of income generated in the USA for everyone to live a very comfortable lifestyle -
The USa generates 50,000 in income per man, woman and child in this country.
Married with no kids - you should be making $100,000.
Married with 2 kids? Your share is $200,000 a year.
But the top 1% have gamed the system to benefit them Exclusively - even if bridges fall down and they throw the entire world into the Next Great Depression.
They Do Not Care.
http://blogs.reuters.com/david-cay-johnston/
The report by d c Johnson shows that 93% of all new income in America goes to the top 1%.
That is the very definition of a Corrupt Economic model.
if Social Security were really broke, the private sector would not want to take it over. They want to privatize it because they see enormous opportunities to make money from poor people.
Caroline, you are correct, GW said at the end of his presidency that his biggest regret was not being able to privatize Social Security. He and Dick Cheney would not even consider doing anything that didn't involve huge profits.
Only because there is plenty of money still rolling in from payroll taxes, which the COULD make a profit from. That does not mean that SS does not have a negative balance sheet, which it does if you count the Treasuries in the trust fund as liabilities to the federal government, which they are.
What's "broke" is our asinine monetary system in which private entities create money out of thin air (a process that should belong to We The People >>only<<), and then lend it to us at interest. The debts so created can never be paid back except by the creation of even more non-pay-backable debt. This is intolerable. It is stupid. It is unjust. It is unsustainable. There must be a universal jubilee to accompany a new way to provide money to the economy.
Shoe Thrower,
Thank you. You make very good points, HOWEVER, there is much more to say.
Your argument is even stronger and more powerfully convincing, when you add the fact that the USA govt could then charge the banksters interest for using OUR public money -- and that the main purpose of the Federal personal income tax was to pay the interest on the national deficit & debt.
( 1. ) END the FED, as it is (private entity, making untold billion$ of profits) -- create consumer-based regulations and enforce really LARGE financial penalties for boom/bust cycles that pump/dump inflate/pop balloons -- to transfer wealth to the richest.
( 2. ) END the FED, means the people DIRECTLY benefit from the govt charging the banksters interest, which then allows and leads to ( 3. )
( 3. ) END the Federal Income Tax for individuals
You said it, Homeostasis. Debt-free money created by the government would cut out the bankster parasites and would solve a host of problems, not the least of which would be the emasculation of the ruling global power "elites". If all the criminals in charge of the Goldman Sachs, the Bank of Americas, and the central banks of the world were to be banished to some god-forsaken prison island, no one would miss them. I take that back. We would miss them like sore thumbs. We need a revolution in monetary policy, and a revolution in law enforcement to go along with it. Jail the bankers. Take their stuff. Impoverish them. Free the rest of us.
The Trust Funds have been pillaged for one heck of a long time and the GOP proves every day that they can care not one degree about anybody but their rich friends and lobbyists.
Just look at the latest farce called the GOP Budget Blueprint.
No surprises here. Oh! by the way a lot of war veterans work in the Government at many agencies and here is a group of real patriots who are bashing the VETS with pay freezes and all the other anti-employee garbage.
The current Congress is really out of touch with reality and that is both Democrat's and Republicans.
Going by Republican attempts to eliminate Medicare, the Republican "solution" is to lower American life expectancies which would "save" Social Security because seniors would die earlier and not collect Social Security for so long. Oddly enough the "pro-life" (pro-fetus is more exact) Republican Party favors earlier deaths for seniors as a solution. Changing Medicare to a system of vouchers to purchase private insurance is another way to shorten senior life expectancy. In Republican eyes seniors are "useless eaters" and the sooner they die, the better the way Republicans think.