By Norman D. Livergood
George W. Bush is telling us that Social Security is in
trouble NOW. And you can believe everything he tells you–right?
The Bush junta and Wall Streeters
are peddling the Big Lie (*) that
Social Security is inevitably going bust.
It is not!
The Social Security System (SSS) runs at a surplus of $100-$120 billion
annually and will continue to do so throughout the twenty-first
century! THIS IS WHY THE BUSH
JUNTA WANTS TO LOOT SOCIAL SECURITY–IT’S WHERE THE BIG MONEY IS!
This trust fund system is one of the few
programs set up by the federal government that works. In 1999, SSS
received $383 billion in checks, $436 billion in taxes, and an
additional $49 billion in interest. Instead of red ink, Social Security
made almost $102 billion in profit, to add to the more than $652
billion it had in surplus from previous years.
Dubya is now LOOTING this Social Security surplus by spending the
money on weaponry manufactured
by his defense industry cronies! As usual, Bush II is LYING to try to
wreck the entire Social Security System. He’s telling the American
public that the Social Security fund is NOT a separate fund in trust to
the 32 million older Americans whose lives depend on it.
Federal Reserve Chairman, Alan Greenspan, lies that the Social
Security system is “financially threatened.” Greenspan is endorsing the
privatization scams which would require workers to put their Social
Security retirement payments into the stock market.
This is the same treacherous stock market in which witless investors
lost between $700 million and $1 trillion on December 6, 1996, the DAY
AFTER Greenspan had admitted that the stock market is in trouble
because of what he calls “irrational exuberance.” In other words,
Greenspan himself intimates that the stock market may be in for a new
speculative disaster on the order of the Great Crashes of 1929, 1987,
2000–but American workers should put their money in this Big Casino so
Wall Street can loot their billions in retirement funds.
Every day the feeding frenzy accelerates,
with columnists and other sycophants falling into step, warning us that
the Social Security System is facing disaster. Fortunately, some
leaders have the courage to speak the truth. Robert M. Ball, former
Commissioner of Social Security from 1962-1973 and a member of the
Advisory Council on Social Security, has said “there is no financial
crisis in Social Security.” As Ball explained, the system is today
accruing substantial surpluses and total income will exceed outlays
until about the year 2020. After that Social Security
reserves–estimated at $3 trillion–will be used to pay ongoing
benefits that exceed the level of current taxes.
The sky is not falling. The fact is that the Social Security System
is doing fine and faces only the danger that the public might believe
the big lies that Greenspan, Congress, and Wall Street are mounting
Big Lie # 2: The Social Security System will run out of money
by the year 2029 (or 2034 or 2037).
| The Truth:|
These projections are based on totally unrealistic projections made by
so-called bipartisan (but not nonpartisan) commissions packed with Wall
Streeters, bankers, and financiers.
George W. Bush’s Social
Dubya’s former panel was chaired by Senator Daniel Patrick Moynihan
(D:NY) and AOL Time Warner’s CEO, Richard Parsons. This notwithstanding
AOL Time Warner’s payment of $5.5 million in 2000 to settle a lawsuit
alleging the company illegally denied pension and health benefits to
Panel projections take the Social Security System
trustees’ worst-case scenario and claim it to be the
only realistic picture of the future for the SSS. The so-called
independent studies of Social Security funding have been financed by
the very Wall Street firms who want to grab the money. For example, the
Cato Institute (**) Project on
Social Security Privatization was funded by American Express, the
brokerage house of Alex Brown and Company, and the giant American
International Group. The co-chairmen of the Cato Institute project are
William Shipman, a senior officer at the Boston State Street Bank, and
Jose Piñera, the man who privatized Chile’s social security
system, resulting in a $1.5 billion loss to Chilean citizens in 1995.
As Robert Dreyfuss shows in his 1996 article
in Mother Jones (“The End of Social Security
As We Know It?” Nov/Dec, 1996), the Chilean “model” is a clear warning
to Americans, with the Chilean workers losing four percent of their
investments in the privatized social security scam while the
corporations managing the accounts earned profits of more than twenty
percent! The Chilean military dictatorship foisted the social security
privatization scam on the workers through their total control over the
How ridiculous is this worst-case projection? Over the past
seventy-five years the American economy has been growing at about 2.8%
annually. Even during the worst economic times in the U.S. – during the
1930s depression – the economy grew at 1.9%. Now these doomsayers
insist that the U.S. economy will
only grow at 1.4% annually over the next 75 years! So, if you predict
that our economic growth will fall below even the all-time low of the
1930s depression, the Social Security System gets into financial
trouble in about the year 2037. But if you take a more realistic view
of the U.S. economy, even a modest 2% growth rate, the Social Security
System will stay solvent, in fact reap a surplus, throughout the
entire twenty-first century.
impact of Social Security benefits on the lives of citizens and on
local economies is incalculable. In 1995 Social Security paid $340
billion in benefits. Forty-two percent of American senior citizens are
kept from living in poverty by their Social Security payments. Nearly
one in five Americans receives Social Security benefits and ninety-five
percent of Americans have the Social Security benefit protection
Big Lie # 3The only way out of disaster for Social Security
The Truth: Privatization schemes are
The same Wall Street firms who contribute big bucks to the
campaigns of presidents and senators now
want to loot the Social Security System of trillions of dollars and
jeopardize the survival of millions of retired Americans. These
self-appointed leaders established a 40-member Public Pension Reform
Caucus in Congress, co-chaired by Representative James Kolbe,
Republican of Arizona, and Representative Charles Stenhold, Democrat of
Texas. In July, 1996, Representative Nick Smith, Republican from
Michigan, introduced H.R. 3758, the “Social Security Solvency Act,”
which would begin the piratization process by diverting about one-sixth
of workers’ Social Security contributions into private retirement
funds. The amount would increase to 80% over a period of a few years.
Other bills now being considered would increase the rate of looting at
an even faster clip. Most bills follow the Chilean model, requiring
workers to pay an additional 1% annual management fee to the private
It would be insane for Americans to allow
Wall Street brokerage firms to handle the Social
Security System trust fund. These same brokerage firms now manage
private pension funds by investing the assets in their own stocks and
bonds swindles, often leaving insufficient money in place to pay
pensions. They have lost and continue to lose money in Wall Street
gambling schemes such as the global derivatives market, still an
ongoing $3.5 trillion a day fiasco, despite scandals and a bad press.
Private pension fund losses because of brokerage firm derivatives
speculation have already been exposed in Wisconsin, Virginia,
Connecticut, and Louisiana.
One of the privatization schemes has been created by a group whose
name is right out of 1984: the Quadrennial Advisory Council
on Social Security. They plan to have individual workers put 5% of
into a private IRA, leaving the other 1.2% for the Social Security
fund. So you lose your retirement fund through your IRA gambling scheme
– and who’s going to take care of you?
Wall Street is pumping millions of dollars into a small band of
organizations, public relations firms and “think tanks” whose mission
it is to undermine public confidence in Social Security and push for
privatization. Among the Wall Street trading firms, insurance companies
and corporate donors working
to undermine Social Security are:
- Merrill Lynch
- T. Rowe Price
- American Express
- Morgan Stanley
- Oppenheimer Funds
- Quick and Reilly
- Watson Wyatt Worldwide
- State Street Bank and Trust
- Investment Company
- Securities Industries
- American International
- National Association of
- Fidelity Investments
- Blackstone Group
- AIG Life
- American Council of Life
- Teleos Asset Management
- Digital Equipment
- Alex Brown and Sons
- Rockport Financial
The point-man for Wall Street’s Social
Security scam is Jose Piñera, who was the minister of labor from
1978 to 1980 under the brutal right-wing dictatorship of Alfredo
Pinochet in Chile. Piñera is currently president of the
International Center for Pension Reform and Co-Chairman of the Cato
Project on Social Security Privatization. The Cato Institute, a
right-wing think-tank, claims to be “libertarian,” If you wonder why a
“libertarian” organization is the spearhead for the privatization scam,
you have only to be aware that Merrill Lynch is the chief contributor
to Cato’s expenses.
Piñera and other Wall Street paid agents tout Chile as the role
model for the U.S. to follow in “reforming” its Social Security
“crisis.” Let’s take another close look at the so-called Chilean model:
- Nearly half of Chilean workers choose
not to make regular Social Security
contributions, because they have little reason to believe that money
taken from their checks by the government will ever be returned to them
in the form of promised benefits decades into the future
- The benefits citizens in Chile receive are so
breathtakingly low they amount to a national disgrace
Under Chile’s new pension system salary
deductions are higher than FICA taxes levied in the United States. In
Chile, workers must put 10 percent of their earnings into individual
retirement accounts, and give 7 percent of their earnings to finance
health benefits, and deduct 3.3 percent of their earnings to finance
survivor and disability payments. An average worker in Chile, then,
pays 20.3 percent in payroll taxes versus 7.65 percent for U.S. workers
(15.3 percent including the employers’ side).
- In Chile, between 10 and 20 percent of worker
contributions to the pension funds go to fund administrators, resulting
in smaller returns than “gross revenue” statistics would suggest.
Between 1982 and 1995, for example, the average rate of return on
pension investments in Chile totaled 12.7 percent. After factoring in
commissions to fund handlers, however, the average real rate of return
of Chilean pension fund investments totaled less than 2 percent! Under
the current U.S. system, Americans pay no commissions; and
administrative costs eat up less than 1 percent of a workers’
- The average rate of return on Chilean pension
accounts in 1995 was negative 2.5 percent!
- The Chilean stock market lost nearly 20% of its
value in the first half of 1998, on top of a steep drop which followed
the October, 1997 global financial shock
- The Chilean pension fund has dropped from the $33
billion at its high point in 1997 to $29 billion today
the presidential election, George W. Bush now wants to steal the
taxpayers’ social security as well by having them invest in Wall
Street, which in March, 2000, saw investors losing $4 TRILLION. The
Bush plan calls for diverting 2% of today’s workers’ Social Security
payroll taxes into private Wall Street accounts, the same accounts.
Bush and his Wall Street flunkies want you to think that this refers to
a measly 2% of the entire Social Security reserve fund, but it actually
means 2% of the 12.4 percentage points of total salary that now go into
Social Security payroll taxes–one-sixth of the total payroll tax
money. Under this scenario, Social Security would lose one-sixth of
the money that now flows in, representing a staggering $74 billion loss
to Social Security the very first year!
Individual stock market accounts would cost a bundle. We’d have to pay
for two Social Security systems at the same time: today’s program for
current beneficiaries and the privatized system. To cover the price
tag, we adjustments–or some
mix of these bad choices.
If you want to see what a
catastrophe privatization of retirement funds has proved to be, you
need go no further than the horrible example of Britain (***).
Big Lie # 4: There’s nothing Americans can
The Truth: First, there is no present
crisis – other than the real possibility that Americans will be
confused by all the smoke and mirrors created by the very Wall Street
people who want to pillage the Social Security System. There is no
crisis over the solvency of Social Security; it is a fight over the
future of a program started in 1935 that means the difference between
life and death for more than 32
million elderly Americans.
American workers must
wake up to this present frenzied effort on the part of Big Money to
take over the trillions in social security funds. Americans of all ages
must tell our congressional representatives that we don’t want the
Social Security System to be piratized and that we hold them
responsible for making sure it doesn’t happen. We must speak out
against this conspiracy wherever we can.
Contrary to the Big Lies,
the sky is NOT falling; the Social Security System is alive and well.
But we must protect it from the “defenders of the public good” who are
out to plunder it.
The Vultures Are Circling Social
The Wall Street Journal let the
cat out of the bag, announcing that even under moderate privatization
plans, $60 billion a year would flow into mutual funds managed by Wall
Street, instead of going into the Social Security Trust Funds. Michael
Tanner, director of health and welfare studies at the Cato Institute
(read big money think tank), let slip the other incriminating evidence
when he admitted that along with Bank of America, Citicorp, Chase,
insurance companies, the Investment Company Institute (ICI), and
securities firms like Salomon Brothers, Cato’s $2 million privatization
project is being funded by “large employers concerned about payroll tax
increases.” Privatization of Social Security would mean billions of
dollars for Wall Street mutual funds managers and employers. The gang
that brought you the 1929, 1987, 1998, and 2000 stock market crashes
resulting in hapless investors losing billions of dollars are now
trying to con Americans into putting their retirement earnings into
But with the billions in
profits at stake the big money people are mounting a campaign to
convince Americans that
Social Security is dead or dying. As usual, they suppose that if they
tell a big enough lie American citizens will swallow it. The Investment
Company Institute, which by the way, “donated” $245,264 to federal
candidates in the 1996 election; Peter G. Peterson, an investment
banker, Nixon’s commerce secretary, and president of the conservative
Concord Coalition; and the libertarian Cato Institute are leading the
pack. Their uninformed disciples repeat their propaganda in newspaper
letters to the editor and commentaries and magazine articles. The
newest cons include trying to convince citizens that Social Security
funds invested in U.S. Treasury bonds don’t really exist and that the
Chilean privatization plan is a model America should adopt.
If you have money in U.S. Treasury bonds or other securities, you
expect to get your interest and capital when you redeem them. But,
mysteriously, Social Security funds in those same instruments can’t
expect a return on the investment. Why? Because the scam artists say
so. In fact,
following the lead of the Concord Coalition and the Cato Institute, the
disciples are claiming that Social Security is a giant Ponzi scheme.
Doesn’t make sense, I know.
Let’s Eradicate The Vultures
Dubya is now lying that his 2004 stolen election gives him a “mandate”
to complete his 2000 campaign promise to “allow Americans to invest
their social security savings in Wall Street.”
Dubya has now begun to raid the Social Security fund with his new
“war on terrorism” budget. This so-called war is entirely of Bush’s
making and is only for the purpose of giving billions of taxpayers’s
dollars to his defense industry supporters. Unfortunately, hardly
anyone is speaking out
against Bush’s insane raid on Social Security.
citizens of all ages must begin fighting now to make sure that
Social Security remains in place as it is. Social Security was
created to protect society from the
social and economic burdens associated with widespread old-age poverty
and misery as seen during the 1930s Depression which was precipitated
by the 1929 stock market crash.
By and large, Americans with incomes under $25,000 a year get back
more in benefits than they pay in the form of Social Security payroll
taxes. Those with incomes of more than $50,000 a year get back somewhat
less. The U.S.
Social Security system is a progressive system — a system designed to
improve the economic condition of those on the very bottom of the U.S.
economic ladder and reduce economic stratification.
American citizens need to remember President Franklin D.
Roosevelt’s reply when he was asked why he had
set up Social Security as a worker contribution system: “We put those
contributions there so as to give the contributors a legal, moral, and
political right to collect their pensions and their unemployment
benefits. With those taxes in there, no damn politician can ever scrap
my social security program.” Unfortunately, FDR never conceived that a
cabal such as is now in control of America would have the gall to LOOT
Social Security for the benefit of the ruling plutocrats.
is a matter of life or death for the millions of people on Social
Security . The cabal behind the
Bush II junta wants to wipe out all those who are now receiving Social
Security benefits, so they can loot the trillions in the Trust Fund
that we’ve paid into it. Bush is saying that he won’t cut off people
from Social Security who are already receiving it. And we can believe
him, right? (think weapons of mass destruction)
In the face of such unmitigated criminality, American citizens must
do everything possible to save Social Security–and our lives.
(*) A big lie is defined as “the
intentional distorsion of the truth, especially for political or
This tactic of trying to deceive a country’s citizens was used
by Adolph Hitler–and now by the Bush II junta.
“The great mass of people … will more easily fall victim to a big lie
than to a small one.”
Adolf Hitler (1889-1945), German dictator. Mein Kampf, vol.
1, ch. 10 (1925)
(**) The Cato Institute is the Cabal’s Front Organization
for Social Security Privatization
A 1999 Cato report gave Republicans a new rationale
for market-oriented change. The study found that people with stock
investments were more likely to sympathize with Republican policies of
cutting taxes and curbing government spending. That bolstered a view,
shared by some Bush advisors but rarely expressed publicly, that
changing Social Security to increase the number of people with a stake
in the stock market would help the Republican Party expand its base.
“By 2000, every GOP presidential candidate except for Gary Bauer
supported worker-controlled retirement accounts.”
“‘It could be many years before the conditions are such that a
radical reform of Social Security is possible,’ wrote Stuart Butler and
Peter Germanis, Heritage Foundation analysts, in a 1983 article in the
Cato Journal. ‘But then, as Lenin well knew, to be a successful
revolutionary, one must also be patient and consistently plan for real
Janet Hook, “Years Invested in Social Security Plan,”
Los Angeles Times, 1/30/05
(***) Swindle of the Age By Paul Foot
Tuesday March 19, 2002 The Guardian
Most successful swindles come with a bribe. Certainly the greatest
swindle of modern times – the pensions racket of the late 1980s and
early 1990s – could never have worked without a big bribe from the
government. Soon after the big Tory victory in 1983, a gang of tightly
knit Thatcherites, closely connected to the privately financed
University of Buckingham and the banks, decided on a big push for
private enterprise in the field of old age pensions. These men were
offended by what they regarded as the “crypto-socialist” combination of
state and occupational pension schemes. They campaigned for “portable
pensions” – a dream world in which working people could go through life
reinforced with their own personal pension bought individually with
their own money to the profit of a bank or an insurance company.
The intellectual and democratic thrust behind this thinking was
summed up by the minister of state for social security Tony Newton (now
Lord Newton). He told the Commons: “People have more confidence in
their bank managers than their MPs.” Newton and his boss, Norman
Fowler, now Lord Fowler, and his junior, John Major, later prime
through the Social Security Act, under whose provision swarms of
“agents” from companies like the Prudential and Legal & General
scoured the country for suckers in occupational schemes who could be
flogged a private scheme instead. At least a million people became
victims. Almost all the schemes they were sold turned out to be worse
than the schemes they left.
How did so many people fall for this hoax? One answer was the bribe
offered by the government in the same act. If people switched to
private pensions they could claim a 2% rebate on their national
insurance contributions. This rebate would have to be invested on the
stock market and would, the wretched victims were assured, provide a
better pension than the state ever could.
Thousands of people fell for this claptrap and claimed the rebate. The
shift devastated the state earnings-related scheme (Serps) that linked
pensions to earnings, payments under which were guaranteed by the state.
How has all this worked out? Well, many swindlers were eventually
rumbled. They ruefully admitted what they called “mis-selling” (a
beautiful synonym for theft and deceit). Many of them had to pay back
at least some of the money they expropriated. Many hoped a new Labour
government would revert to the party’s former allegiance to state
pensions, and link them to earnings. Not so.
Thatcher’s smashing of that link was sustained. The gap between
earnings and state pensions grew. Instead of replenishing Serps, the
government set up a “stakeholder” private pension scheme for the
low-paid. Their choice for a company to run the scheme was the
Prudential, which had “mis-sold” more private pensions than anyone
Now what is happening? Lots of people with pension policies with
companies like the good old Pru had letters last week from the same
companies urging them to contract back into Serps. The state, say the
companies, (although they don’t put it quite like this) is more
reliable than the stock exchange. No one will detest that message more
than New Labour ministers for social insecurity.
While this argument rages, Tony Blair has been in Barcelona for a
European summit. To his intense irritation, he has had to put up with
the same arguments that have persuaded the Pru and others to urge their
clients to clamber back to the state. At the lowest possible estimate
(the police one) a quarter of a million people thronged the streets of
the city where socialists and anarchists (including George Orwell) once
fought fascists. As in 1936, the unanimous cry of the demonstrators was
“down with capitalism!” All this was studiously ignored inside the
conference, but some doubts were expressed even there about what was
ludicrously described as the EU’s “liberalising agenda”.
Blair joined a new liberalising axis called BAB, after Berlusconi,
who with the help of his enormously powerful companies and former
allies of Mussolini, is busy liberalising Italy, Aznar, the
liberalising and very reactionary prime minister of Spain, and Blair.
The argument between outright and cautious privatisers annoyingly
diverted the conference from what BAB calls “progress”, and very little
was achieved. Indeed all the conference organisers could boast about
was a commitment further to “liberalise the energy market”. Blair and
Co are rather short of slogans nowadays so I am happy to provide them
with one: ON, ON, ON – TO ENRON!