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Posts Tagged ‘Social Security

Mea Culpa

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Dear Readers,

For the last couple of weeks, I’ve not posted anything to my blog. Not even about those little known stories the mainstream media tends to ignore…and I love. It’s not that those stories don’t exist. Heck, plenty of them exist everywhere; just look at any issue of Wired Magazine’s Wired Science blog. I’ve just been occupied elsewhere.

I admit to having “liked” Bruce Bartlett’s facebook page which supplies me with endless conversations (and articles) on economics and politics as well as the absurd. Of course, I still read the news every morning in the Washington Post (especially Wonkblog) as well as The Atlantic, The New Republic, The American Conservative, Bloomberg, and a few others like the Financial Times and the Economist.

But over the course of the last year I’ve become more involved in volunteering my expertise to community non-profit groups. My little, rural town in the Sierra Nevada foothills can’t afford paid services for the help it needs. We’re still suffering from the severe recession.

Wages are below median average for California, and industry, as we generally think of it, is practically unknown here. For years, Colfax, where I live, was ruled by a “no expansion” crowd that hamstrung local businesses and the community at large. Finally, that hold is breaking as a result of the Great Recession. Businesses, hard hit by lack of customer revenues, are finally speaking up and demanding revenue growth in order to stay in business and to fill the empty storefronts. Residents are seeing the need to build sustainable businesses that can help support necessary, and even desired, community services.

I’ve spent most of my adult years in large towns where governmental actions made a huge difference in both the local economy and in people’s lives. When governments partner with the business community, local service non-profits, and residents great accomplishments occur that better the lives of everyone in the community. The current Tea Party inspired, Ayn Rand anti-government fad fails to acknowledge the many benefits government provides communities via increased demand revenues and stabilizing taxes.

For me, when my local community chose to develop an Art Walk which promoted both local artists and main street businesses, expand the reach and profitability of our annual July 3rd Independence Day Celebration (yeah, I know it’s a day ahead of the real thing), and develop a community-wide business plan to promote our city, I volunteered. Unlike the Ayn Randers out there, there’s more to a good life than just me…and the financial perks I personally am getting. I saw these non-profit activities as a chance to rebuild and renew our business community.

Certainly, Social Security and Medicare made it economically possible for me to spend my time on efforts to help my community develop and become more profitable. Without those earned insurance benefits, as they currently exist, I’d be bankrupt…and be left wondering what to do to survive. It’s not that I didn’t save in retirement accounts throughout my 40-some working years. I had. I invested the maximum amount the federal government allows each working year. Regardless, between 2001 and 2009, following the great crash, I lost nearly 2/3s of my retirement savings. Over that decade, I continually bought more shares via my retirement accounts, but the values (profits) decreased. The end result became my need for these two primary insurance benefits into which I paid for over 40 years.

Nevertheless, those insurance benefits now afford me the ability to spend many hours each week voluntarily working for my cash-strapped community, rather than solely worrying about how I’m going to pay the bills or how to survive another month. I’m not forced to go begging for state or federal assistance. Or made to feel like I’m the lowest of the low for needing help. I still have my dignity and the knowledge that I’m taking financial care of myself.

But I’m no hero, by any means. Those earned insurance programs now have just provided me the means to the end of helping my community at large.

Strikingly, my community volunteering increased my skills far beyond what I learned during my career…and I really enjoy all I’m learning in the process of doing. Sure as heck beats vegetating and waiting to die!

But I guess, for me anyway, I feel valuable again. I feel like I really can make a contribution to my community and my fellow citizens…and that makes me feel important and good about myself.

I understand my senior’s path isn’t the same for everyone. But it’s working for me and adding to the renewal efforts of my community while not increasing costs. Most of all, though, I’m getting far more personal satisfaction out my volunteer activities than I’m putting in terms of time and my increased skills.


Clip From ‘Brave, Honest Conservatives’ and Social Insurance

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Mark Thoma: Social Insurance: “Socialism is a low mean, low variance economic system…. Worker income, though low, is not subject to substantial variation over time. Other economic risks, such as access to housing and risks related to healthcare are also very low…. Under capitalism the average level of income is much higher, but economic risk is higher as well…. A worker who has shown up to work every day and worked hard to support a family can be suddenly unemployed for reasons unrelated to anything connected to his or her own behavior…. In an agrarian economy, economic security is provided by extended family relationships coupled with the largely self-sufficient nature of farms…. For a worker dependent solely upon wage income, the consequences of a recession are much more severe…. 1920 marks a benchmark year where, for the first time, more than half of the population lived in cities. When the Great Depression hit around a decade later, the social changes the U.S. was experiencing and the need for new ideas regarding the government’s responsibility for the economic security of its citizens became clear. The Great Depression made it evident that in a capitalist system, where the whimsies of the marketplace can wreak havoc on people’s lives, the government has an obligation to provide economic security. It was also evident that the private sector did not provide the needed level of insurance and that government intervention was required to overcome this problem (due to both moral hazard and asymmetric information problems in the private insurance market).”

The entire post by Thoma (an economist) is well worth the time spent reading it.

Written by Valerie Curl

January 26, 2013 at 4:11 PM

Social Security on the chopping block again

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According to the Hill, Rep. Jeff Sessions (R – TX) introduced a bill to privatize social security completely within 15 years.

Rep. Pete Sessions (R-Texas), who chairs the National Republican Congressional Committee, and several other Republicans introduced the Savings Account for Every American (SAFE) Act. Under the bill, workers would immediately have 6.2 percent of their wages sent to a “SAFE” account each year.

That would take the place of the 6.2 percent the workers now contributed to Social Security.

Another 6.2% is sent to Social Security by employers. Under the Sessions bill, employers would continue to make this matching contribution to Social Security, but after 15 years, employers could also send that amount to the employee’s SAFE account.

In other words, at the end of 15 years, no more Social Security. Session’s doesn’t say if the money in a worker’s account will end up in the hands of Wall St to manage, a la 401(k)s and IRAs, or if there’s another safe vehicle, like Treasuries, that will be the investment asset. But I’d bet on Wall St. Sessions gets a boatload of donations from the financial services sector.

Once upon a time, we had a Republican party that actually cared about the people. I wonder where they went?

UPDATE: Via the Washington Monthly, one of the six co-sponsors is Republican Caucus Chairman Jeb Hensarling of Texas. This is relevant because it means two members of the GOP leadership are on board with this proposal.

Written by Valerie Curl

June 7, 2011 at 5:09 PM

Keep Your Hands Off My Social Security, Senator

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Thursday, Suzy Khimm of Mother Jones attended a little known and certainly not well publicized press conference of three Republican Senators. The reason: to announce changing Social Security.

Senator Lindsey Graham ( R-SC)

Not content with the GOP plan to upend Medicare and Medicaid, a trio of GOP senators have unveiled a proposal to go after Social Security as well. On Wednesday morning, Senators Lindsey Graham (R-SC.), Rand Paul (R-Ky.), and Mike Lee (R-Utah) presented their plan to slash an eye-popping $6.2 trillion from the debt by reforming Social Security—all without raising taxes. How will they pull this off? By hiking the Social Security retirement age to 70 years by 2032 and reducing benefits for those who earn more than an average of $43,000 over their lifetime. The Republicans’ plan also makes sure to exclude anyone bound to retire (and vote) any time soon, by exempting those currently older than 56 years from feeling the pain.

In unveiling the plan, Graham called any kind of tax increase to shore up Social Security a non-starter and economically catastrophic. “Don’t raise taxes unless you want to completely destroy America,” he said at the Wednesday morning press conference. “It’s much better to give up benefits on the end side than pay taxes now.”

Of course, according to the Congressional Budget Office, eliminating the cap on income subject to Social Security (now set at around $106,000) would all but eliminate any long-term solvency issues for Social Security.

Now, that these GOP Senators have jumped on the bandwagon to reduce social security benefits for most middle class, working people, several of the freshman, Tea Party elected House Republicans have jumped on the bandwagon and plan to introduce a similar bill in the House.

When asked whether the House GOP should be tackling Social Security, Rep. Austin Scott (R-Ga)—the elected president of the freshmen class—replied: “Absolutely. We have to put every issue on the table, and address all of them…. I don’t think we can afford to exclude anything right now, with the debt limit and the fiscal crisis we’re in.” Even freshman Rep. Allen West (R-Fla.), who represents a district with a significant elderly population, argued that raising the Social Security age would help address the deficit. “If you take it from 65 to 69, it does have a positive effect on bending down the deficit curve…back then, we were living to 59. Now we’re living to 78,” West told Mother Jones.

And a major Social Security debate in the House may already be on the horizon. Rep. Jason Chaffetz (R-Utah), also a tea party favorite, added that he planned to introduce his own Social Security reform bill in the upcoming weeks. He wouldn’t disclose any details of his plan, only to note that “lots of folks” in the House were involved—and that his plan would take major steps in overhauling the program. “Until we fully tackle entitlements, we can’t get on the trajectory that we need to,” Chaffetz said.

Killing the Retirement Goose

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I admit to qualms over the 2% payroll tax reduction in the recently enacted tax package. I know that 2% will put extra monies right now into the hands of hardworking, financially strapped middle income Americans who really need all the extra money they can get, especially after losing so much during the 2008 financial crash, a decade of declining or flat incomes, and continued higher than inflation health care and education costs. I also know that President Obama promised that the Treasury would make up the missing funds. However, what they didn’t say – and maybe didn’t know – is that is illegal to for Treasury to make up the reduced funds.

By law, Social Security must be self-funded, meaning it cannot accept money from the Treasury or any other federal revenue source. The result of this new reduced payroll taxation will cause billions in lost revenue to Social Security for future generations.

In 1985, President Reagan signed a bill that allowed all the funds from Social Security to shifted from safe investments in Treasury bonds into the general Congressional budget fund, enabling Congress to spend Social Security funds as they chose. Over $2 trillion of Social Security funds have disappeared into the federal budget.

According to economics Professor Allen W. Smith, Eastern Illinois University (http://www.thebiglie.net), Congress essentially gives the Social Security Administration IOUs for the used funds, rather than those funds being invested into the safe Treasury Bonds that China buys or that Wall St currently purchases as safe repositories of excess funds. But the question remains: what happens if Congress cannot repay those IOUs?

What if the federal deficit hole is so huge, as it is now, that repaying those funds is impossible? (Again, the amount currently owed to Social Security by the Treasury – Congress – is $1.2 Trillion.)

The simple answer to reduce that Congressional debt is to change the rules of the Social Security program. In other words, change how it works, from a self-funded, Treasury bond-invested defined benefit program, as originally created, into a “welfare” program.

That’s what I fear this so-called “temporary” reduction of payroll taxes will cause.

Does anyone believe that at the end of 2011 the GOP will allow the decrease to simply expire? Given that the Bush tax cuts were due to expire this year but were extended, does anyone believe the GOP won’t advocate for maintaining the lowered payroll taxes funding Social Security, saying the taxpayers should keep more of their money rather than giving it to the government, even though Social Security continually maintains far more efficient costs (Return on Expenses) in a total cost-benefit analysis than any current IRA or 401k?

A few months ago, a very tax-conservative politico admitted that making Social Security in a welfare program was a laudatory goal. He saw it as a preliminary step to ending Social Security as we know it: a defined benefit retirement program, paid for by workers and administered by the federal government. His ideology he admitted, as defined by his conservative principles, is that government should not be in the social welfare business. According to him and his ideological partners in the GOP, retirement programs should be strictly in the purview of Wall St and private enterprise.

As a result of his and the mainstream GOP ideology, in redefining Social Security as a “social welfare program,” Congress would be able to continually change the rules and who qualifies until they met their goal of legislating Social Security out of existence.

While this goal may seem ideologically appropriate to some “free marketers,” it could have devastating effects on middle and lower income workers. Depending upon the so-called “free market” carries risk – as recently revealed in the many well-documented books and editorial analyses of national and international Wall St financial scandals – which many people have neither the expertise to navigate nor the time to manage.

As a result, Social Security has been the safe and secure backstop, if not the primary source of income, to millions of Americans who’ve worked hard their entire lives and want to live independently, not putting an additional financial burden on their children.

They believed that Social Security would provide that backstop towards providing them with fiscal responsibility and security without burdening their children.

But just as the 2009 market crash saw the loss of 50 to 60% of private retirement incomes disappear, perhaps to never be recovered when needed for retirement, the non-existence of Social Security would have devastating effects on the economy.

How many families today or in twenty years from now are prepared to accept the financial responsibility for taking care of their parents? In other words, are you prepared to have your parents to move in with you as families were required to do a hundred years ago in order for elder parents to survive?

There’s nothing wrong with extended families – parents, children and grandparents all living in the same household – but are you willing to accept that change and the greater financial responsibility that change implies? Think about all the fiscal implications, from a larger home needed for the additional occupants to the decreased control – and negotiation – of your household.

Ideological policy changes – and financing of those policies – have long lasting consequences. What consequences are you, as average American workers, willing to accept, especially after forking over so many of your hard earned dollars into a retirement system that you thought safe from Congressional overspending while under generally under-taxing to pay for Congress’ gross expenditures? Are you wiling to balance the budget on the backs of future seniors who’ve paid into a retirement system they thought safe from Congressional exploitation in order to pay for a truly corrupt tax system?

Remember Congress owes the Social Security Administration over $1.2 trillion dollars for the monies used by Congress to finance a decade’s long 60% increase in defense programs – over 100% higher than during the Cold War expenditures of the Reagan Presidency – or $1 of every $5 collected by the Federal government. Many of those programs and projects currently budgeted, the DOD doesn’t want and has stated the country cannot afford in addition to the fact that the recent general tax cuts make those programs and projects no longer affordable.

Not only do those DOD expenses inflate an already gross federal deficit, but overall actual health care costs threaten to wreak havoc on an already trained budget.

Should the Social Security Trust Fund be changed now into a “welfare” program to be used and changed by a profligate Congress as result of excess spending to put its already spent (deficit) financial house in order?

Social Security is not a welfare program – nor was it meant to be. It was always meant to be a defined benefit plan, safe from the predations of Wall St., which we all pay into insure a meager retirement should all else fail.

The way to fix to Social Security funding is to eliminate the caps so that everyone who pays into it – including those who have comfortable office jobs and expect to live much longer lives – pays to the last dollar of income, regardless of income as well as to force Congress to repay the funds over time they’ve already used to fund other programs and expenditures. Finally, Congress should be forced to return Social Security to its original “lockbox” as advocated by Al Gore, and prior to Pres. Reagan’s signing off on using those funds for general budgetary expenditures.

As a nation, we need to get serious about our expenditures, but doing so should not be done at the expense of diverting paid Social Security funds from future seniors into a Congressionally defined “welfare” program, enabling Congress to eliminate the repayment of funds it owes to American citizens.

Written by Valerie Curl

December 20, 2010 at 8:19 AM

Seniors Beware!

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Lawrence HunterLawrence A. Hunter, Ph.D., president of the Social Security Institute and of the Alliance for Retirement Prosperity and previously served as Republican staff director for the Joint Economic Committee, writes in Roll Call:

Reports from inside Obama’s bipartisan National Commission on Fiscal Responsibility and Reform — what one wag called “18 unrepresentative, inordinately wealthy individuals meeting regularly in secret behind closed doors, until safely beyond this year’s midterm election” — reveal that Social Security is on the chopping block. Several Republicans on the commission have indicated their eagerness to go along with these plans to cut Social Security, which could be shoved to the top of the agenda of the upcoming lame-duck session of Congress.

According to news reports, one Republican member of Obama’s deficit commission, Rep. Jeb Hensarling (Texas), said, “Democrats are kidding themselves if they believe Social Security will be preserved without major benefit cuts,” and he repeated the line disseminated by the conservative wonk network, which has become a mantra inside the GOP establishment: “Social Security benefits will have to be cut 24 percent in the coming decades, as the baby-boom bulge of retirees outstrips funding.”

House Minority Leader John Boehner (R-Ohio) also has said he supports raising the retirement age and other reforms.

The Republican Party appears to have been intimidated into embracing drastic Social Security cuts both as a means of eliminating the program’s long-run actuarial deficit and reducing the federal deficit — “bending the Social Security cost curve down” right onto the backs of seniors. That is why seniors and baby boomers would be well-advised right now, before the election, to demand that the Republican Party commit itself unequivocally to taking Social Security and Medicare off the chopping block before voters hand the GOP a mandate to cut a deal with the Obama administration.

The Alliance for Retirement Prosperity has asked all Members of Congress and candidates for Congress to sign a pledge committing to oppose any cuts to Social Security and Medicare benefits.

Seniors, are really sure you want to vote in all those new Republicans?

Written by Valerie Curl

October 19, 2010 at 9:48 AM

As long as I get mine, the heck with you….

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That seems to be the mantra of many seniors attending town hall meetings this summer. How many times have we seen images on TV of seniors carrying signs saying, “ No Socialized health care;” “No socialism;” “No government run health insurance;” and numerous other similar signs?

At the same time seniors are saying no to health care reform for everyone else in the country, they’re saying, “Don’t touch my Medicare.”

Whether you’re for or against health care reform, the image of senior citizens, all of whom are drawing Social Security and Medicare benefits, crying out against socialism when they are the biggest beneficiaries of socialized medicine and retirement benefits is beyond the pale.

Where do these people think the money, which pays their health care and retirement, comes from? That it just magically appears? It comes from the Federal Government, Seniors! Both Medicare and Social Security are two huge socialistic programs. And every taxpayer is paying for those benefits.

Is this attitude the height of hypocrisy or are these people just plain stupid? They seem to think it’s perfectly acceptable that they receive “socialized” assistance, but they want to deny reasonably priced medical care to everyone else.

If they’re so adamantly against socialism, then they should all resign from Medicare and Social Security.

Written by Valerie Curl

August 29, 2009 at 9:12 PM

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