CHRISTIE EYES DESTRUCTION OF SOCIAL SECURITY AFTER DEMOLISHING STATES RETIREMENT SYSTEM

Gov. Chris Christie proposed cutting Social Security benefits in a speech in New Hampshire on Tuesday, proposing a similar approach to national retirement systems as the one currently failing in his home state.

The likely 2016 White House candidate proposed trimming future payments to anyone earning over $80,000 a year, with anyone earning $200,000 or more per year getting nothing out of the system they paid into. Christie stressed that no one currently receiving benefits would face the cuts, but ignored proposals that would improve the program’s solvency without requiring any reduction in benefits.

Christie has a track record in New Jersey of making big promises to retirees and then walking away from them. And this newest, national promise isn’t even a particularly effective one. Opponents of benefit cuts denounced the governor’s approach as the first stage in a gradual assault on an immensely popular program.

“Christie has various proposals for our earned benefits, including raising the retirement age for Social Security and Medicare, making seniors pay more for their Medicare, and reducing the cost of living adjustment Americans receive each year. Each and every one of these is spelled the same way: C-U-T,” said Social Security Works executive director Alex Lawson. “Americans have earned their benefits, and I am confident that Governor Christie’s plan to take them away will be soundly rejected by the American people regardless of political affiliation.”

Groups like Lawson’s argue that means testing proposals like Christie’s are a bad idea both because the math doesn’t work – the savings from means testing are too small to close long-term funding holes program-wide, and increased administrative costs would wipe out much of the too-meager savings from the change – and because it “contradicts the essential nature and spirit of the program” as an earned benefit accessible to all working people.

The extreme popularity with voters that has traditionally prevented cuts to Social Security owes in large part to the basic fairness of a system that pays out what workers put in. Cutting the wealthy out of that bargain as Christie proposes would shrink the voting coalition that protects Social Security from politicians whose Wall Street backers would benefit if aging Americans had to depend on the investment houses instead of the government for their retirement security.

“It’s all part of a coordinated attack on Americans’ retirement security,” Lawson said, drawing connections between Christie’s proposals and the quieter work to derail pension systems that billionaire John Arnold funds around the country. “They’ve already destroyed private pensions. If they can get rid of public pensions as well, there will be nothing for people to do but put their money in Wall Street,” he said.

Christie’s handling of the public retirement system in New Jersey makes it hard to buy the straight-talking image he presented in Tuesday’s benefit-cuts speech. The governor agreed to make $3.8 billion in payments to the state pension funds as part of a compromise in which workers agreed to make higher contributions to the fund themselves. Barely a year later, Christie reneged on his end of the deal and declined to fork over $2.4 billion of the promised total. He claimed it was “the only decision we’re left with,” but his tax subsidies and decision to let hedge fund managers invest state retirement funding cost a combined $3.3 billion. In February, a state judge found that he is still obligated to fulfill his payments promise. But that same month, Christie proposed further cuts to the pension system.

The governor’s Social Security speech is similarly disingenuous about the choices America has for closing Social Security’s oft-exaggerated long-term funding gap. Current law caps payroll tax collections so that only the first $117,000 or so that a person earns each year is subject to the collections that fund Social Security. The cap means that the highest-paid Americans only pay Social Security taxes for about two days each year. Eliminating the payroll tax cap and making the best-paid American pay on all of their income in the same way that most workers do would raise almost all of the money required to make Social Security fully solvent for the next 75 years, up from about 20 years now.

Congress is headed for a showdown over Social Security spending in the coming years whether or not Christie becomes president. But the political landscape for those fights is changing rapidly. In recent years Democrats were so afraid to oppose spending cuts that they entertained GOP ideas about cutting Social Security and even proposed some of their own. Now, thanks to the leadership of Sen. Elizabeth Warren (D-MA), large numbers of Democrats in both chambers are calling for expanding the program instead of cutting it.

On the first day of the current Congress, GOP leaders used a covert rules measure to ensure a manufactured funding crisis within the Social Security Disability Insurance program that is separate from Social Security retirement benefits.

The move will force a showdown over the disability program sometime next year, something Christie enthusiastically endorsed in Tuesday’s speech. “I believe we should use this moment to reform the system and incentivize getting back to work,” he said.

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Blogger-In-Chief

Roger West

Lindsey Graham, An American Taliban Foot Soldier

Lindsey Graham, Republican In Name Only, Foot Soldier For The American Taliban

"Do exactly what I say or I will destroy you." The American Taliban are an incompetent brand of humans, and are the most dangerous and destructive threat facing America today.

Although official Washington is currently fixated on the so-called “Fiscal Cliff,” the biggest threat to American prosperity is the debt ceiling, which must be raised in February to prevent economic catastrophe. If Republicans refuse to reach a deal on the so-called cliff, the Congressional Budget Office predicts that they will spark a new recession in 2013. But if Republicans block action on the debt ceiling, they will make that potential recession look quaint. Without raising the debt ceiling, the United States will be forced to embrace austerity so severe it will lead to “a bigger GDP drop than that experienced during the Great Recession of 2008.”

But in an interview on Fox News Sunday this morning, Sen. Lindsey Graham (R-SC) threatened to oppose this must-pass bill unless Social Security benefits are taken away from millions of future retirees:

I’m not going to raise the debt ceiling unless we get serious about keeping the country from becoming Greece, saving Social Security and Medicare [sic]. So here’s what i would like: meaningful entitlement reform — not to turn Social Security into private accounts, not to take a voucher approach to Medicare — but, adjust the age for Social Security, CPI changes and means testing and look beyond the ten-year window. I cannot in good conscience raise the debt ceiling without addressing the long term debt problems of this country and I will not.

This is extortion, plain and simple. It is the budgetary equivalent of threatening to break America’s legs unless Congress agrees to break the backs of millions poised on the edge of retirement. Graham’s position is that seniors should have to wait longer for their retirement benefits — even if they work in physically demanding jobs that literally tear the body apart by the time a worker reaches age 65 — and that those benefits should be reduced in the future.

And if Congress won’t agree to this deal, then Graham is prepared to thrust the nation into an economic calamity unheard of since the Great Depression.



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STAFF WRITER
Steve "Damn Nazi Liberal" Chevapravatdumrong

Receiving Social Security Is Slavery?

During an appearance on Fox News on Sunday, Rep. Allen West (R-FL) compared social programs like Social Security to slavery, arguing that President Obama’s failed economic policies are creating a culture of “dependence” that is causing people who lose their unemployment benefits to enroll in the Social Security program:

HOST: The number of people going on Social Security disability out-paced the jobs created by the economy in the the month of June, that is a trend we have seen increase, and holding steady since ’09. Do you have a theory as to why that is happening? Is that something the federal government is creating or an unfortunate consequence of our economy?

WEST: That is an unfortunate consequence of failing economic policies coming from the president so that now when people are running out of the unemployment benefits, now they are looking toward going on Social Security disability… so once again we are creating the sense of economic dependence, which to me is a form of modern, 21st century slavery.

West’s comparison is not only dismissive of the 12.3 million people in forced labor around the globe — including many sweatshop workers held illegally and paid very little, girls and women forced into prostitution, and many others — but it is also wrong on the facts.

More than 8.1 million Americans received SSI in January 2012, and nearly 1.3 million of the recipients were children. SSI’s support is modest — the average monthly payment in January was $517 — but important. A 2005 study by the Center on Budget and Policy Priorities found that SSI lifted 2.4 million Americans above the poverty line in 2003 and is a crucial safety net that is keeping families afloat.

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Teapublicans, Social Security And Ronald Reagan

"Ponzi scheme!", "bankrupt", "liberal conspiracy". These are terms you often hear from the teapublication party and radical conservatives when describing the Social Security program. The issue with those terms is that they're all false. Whether it's your conservative uncle around the dinner table, conservative mouth pieces like Rush Limbaugh or the Tea Party members of congress, these flat-out lies are being told across the country.

Social Security is important in people's lives, especially retirees who rely on these benefits. Social Security is not part of the budget and doesn't contribute one nickel to the national debt. Social Security is part of a payroll tax, which is 100% solvent until the year 2038, and can pay out over 80% of the benefits until 2085. Social Security, from its creation under one of our countries greatest presidents Franklin Delano Roosevelt, has been one of the most successful programs the government has ever provided its people.

While Social Security is solvent for the short-term, there are long-term issues with the program that stem from situations that occurred over thirty years ago. In the 1980s, Republican President Ronald Reagan cut tax rates drastically. In 1980 the top tax rate was 70%, which was cut to 50% by 1984 and finally down to 28% by the time Reagan left office in 1988. Supply side economics, or "Reaganomics", was the economic system that Reagan used and was the idea that giving wealthy Americans more money would create jobs which would then "trickle down" to other Americans.

The supply side theory didn't exactly work as planned and Reagan needed a way to make up for the loss in revenue. Reagan ended up tripling the debt while congress raised the debt limit 18 times during his presidency without hesitation. With the lack of revenue coming into the government, Reagan needed a way to keep his fiscal house in order. In addition to raising the debt limit, Reagan also raised taxes multiple times and he did it on the middle class by attacking Social Security.

In 1987, Ronald Reagan appointed veteran business man Alan Greenspan to become Chairman of the Federal Reserve. Before he stepped into his new job, Greenspan already had a big impact on American economics. Under the advice of Greenspan, Reagan took money from the Social Security trust fund to help pay down the debt. The payroll tax was raised in 1983, and the government spent the surplus of Social Security each year to help pay down the giant debt that Reagan created by giving the wealthiest Americans more money each year with the promise of "job creation" for the middle class.

When teapublicans scream about "big government spending" today, they fail to mention that their party was a major reason behind our debt getting out of control. When it comes to Social Security, we need to eliminate the "cap" that is on the program. The cap currently is at $106,800. Anyone who makes more than $106,800 doesn't get taxed for Social Security on their additional income. A person making a million dollars is only paying into the Social Security system 10% of their income, compared to someone making $50,000 a year who is taxed for Social Security on 100% of their income. Shared sacrifice? Not so much.

The "golden child" of the teapublican party, Ronald Reagan, was the man who started the problems for Social Security and the teapublicans have been scaring the American people, especially the elderly, ever since. Social Security is solvent, but we wouldn't even be having the discussion about its future if it wasn't for Ronald Reagan.

 

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Here We Go Again

Three years after the financial crash, GOP candidates revive desire to privatize Social Security.

Since jumping in the race, GOP presidential front runner Gov. Rick Perry’s (TX) radical views on Social Security have garnered the most attention. And for good reason, as Perry lands far to the right of even his most right-wing opponents in calling the entitlement program a unconstitutional “Ponzi scheme.” A fan of secession, Perry even suggested letting individual states “secede” from Social Security altogether.

But Perry’s extremism is taking focus away from the fact that most of the top contenders also embrace a radical idea: Social Security privatization. As the AP reports, most of the top Republicans running are reviving President George W. Bush’s unpopular plan to create private investment accounts for young workers — believing that “workers could get a better return from investing in publicly traded securities.” Indeed, the idea of risking retirement funds in the stock market — three years after the financial crash on Wall Street — is finding a champion in almost ever Republican candidate:

MITT ROMNEY: The former Massachusetts governor has a well-worn record of advocating to privatize Social Security. In 2007, when Romney was also running for president, he pushed for the creation of Social Security personal accounts three separate times. When a town hall attendee told him such a plan was “privatization,” Romney replied, “you call it privatization. I call it a private account.” He enshrined this position in his 2010 book No Apology, stating “individual retirement accounts would encourage more Americans to invest in the private sector that powers our economy.”

MICHELE BACHMANN: In an interview last year, the Minnesota congresswoman insisted young workers “need to have some options in their life, so that going forward they can have ownership for their own Social Security, their own retirement, something they can pass on to the beneficiary of their choice.” When asked in 2008 how Republicans could promote privatization without frightening seniors, she responded, “I believe that we should ensure that those currently receiving Social Security should continue to do so in its current form, but also give a new generation of workers the right to invest some of their money into accounts of their own.” In 2006, she pledged to vote for “regulated individual retirement accounts.”

RON PAUL: During last week’s presidential debate, Rep. Paul (TX) drew applause for stating, “What I would like to do is to allow all the young people to get out of Social Security and go on their own!” He told CNN’s Wolf Blitzer last year that he’d support “turning this money over and give the individual money like an investment retirement fund that they manage.”

RICK SANTORUM: After writing an op-ed calling to “establish personal retirement accounts” in 2005, the former Pennsylvania senator actually launched his 2012 presidential campaign by reminding everyone that he supports these President George W. Bush-style private accounts. He hedged last month on calling for the immediate creation of accounts, but only because having to additionally pay for Social Security benefits while financing such accounts “is to me just something that we can’t do right now.” “I’d love to be able to do it,” he added.

HERMAN CAIN: In the Tea Party debate last week, the pizza mogul declared, “I support a personal retirement system option in order to phase [out] the current system. We know that this works.”

NEWT GINGRICH: Last year, the former House Speaker endorsed House Budget Chairman Paul Ryan’s (R-WI) plan to create personal accounts. He believed such a plan would “triple the earnings” for future retirees. He has touted such a plan since 2007.

Jon Huntsman has not specifically called for private accounts but he did say at the Tea Party debate that “I don’t think anything should be off the table.”

A Social Security policy that ties retirement funds to the volatility of the stock market is nothing short of foolhardy. Three years ago, if Bush had succeeded in creating private accounts, an American worker would have lost $26,000 on the market. ThinkProgress’ Travis Waldron notes, millions of Americans who did have a private account like a 401(k) lost nearly everything in the crisis, and Social Security is the only source of retirement funds they have left. The volatility of market behavior in large industrialized economies like ours “illustrates the real potential for decades-long declines that could erode the value of a private retirement account invested in stocks.”

There are better, safer ways to ensure that Social Security is solvent for the next 75 years. But as long as Republican candidates refuse to learn very recent lessons from the past few years, they will cleave to policies that endanger the golden years of millions of Americans.


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Social Security and the Ponzi Experiment

Texas Gov. Rick Perry emphatically states that Social Security is a “Ponzi Scheme”.

Sometimes campaign spin works to distance a candidate from his controversial past statements. And sometimes the candidate comes back and makes a hash of all the work his staff has done for him.

We could be witnessing the latter scenario when it comes to Texas Gov. Rick Perry (R) and one of the nation's most popular government programs. Last week, Perry's campaign spokesperson took to the Wall Street Journal to help back Perry off the less election-friendly sections of his book, Fed Up!. That includes Perry's suggestion that Social Security is an unconstitutional scheme which should be privatized post-haste.  

Over this past weekend, Perry walked all that back and fired off some more fiery rhetoric about the perils of the entitlement program that most Americans do not want to see changed.

"It is a Ponzi scheme for these young people," Perry said in Iowa, mimicking his pre-presidential campaign language on the subject of Social Security:

"The idea that they're working and paying into Social Security today, that the current program is going to be there for them, is a lie," Perry added. "It is a monstrous lie on this generation, and we can't do that to them."

Charles Ponzi, an Italian immigrant, started this first such scheme in Boston in 1916. He convinced some people to allow him to invest their money, but he never made any real investments. He just took the money from later investors and gave it to the earlier investors, paying them a handsome profit on what they originally paid in. He then used the early investors as advertisements to get more investors, using their money to pay a profit to previous investors, and so on.

To keep paying a profit to previous investors, Ponzi had to continue to find more and more new investors. Eventually, he couldn't expand the number of new investors fast enough and the system collapsed. Because he never made any real investments, he had no funds to pay back the newer investors. They lost all the money they "invested" with Ponzi.

Ponzi was convicted of fraud and sent to prison for two years. When he came out, he returned to Italy, where he became a top economic adviser to Benito Mussolini.

Quoting NFTOS editor and Chief Roger West…..”Just like Ponzi's plan, The pundits along with the CATO institute  (co-founder is Charles Koch) state that Social Security does not make any real investments -- it just takes money from later "investors," or taxpayers, to pay benefits to earlier, now retired, taxpayers. Like Ponzi, Social Security will not be able to recruit new "investors" fast enough to continue paying promised benefits to previous investors. Because each year there are fewer young workers relative to the number of retirees, Social Security will eventually collapse, just like Ponzi's scheme.”



What's more, Perry also said "I haven't backed off anything in my book." Not surprisingly, Democrats jumped all over the quotes. Perry's re-embrace of the Social Security-as-Ponzi scheme thing is likely to endear him further to the tea party types who already support his campaign in big numbers. But polls have shown even the tea party doesn't want to see cuts to Social Security, showing just how dangerous grabbing onto this particular political third rail can be.

So Perry's got a dilemma -- does he stick to his guns on Fed Up!, giving him the sort of "genuine" cred conservative voters crave in a primary candidate? Or does he go the way his staff seems to be suggesting, which frees him from attack-ads-in-a-can like the Ponzi Scheme line? For now it looks like Perry's more interested in staying "real" than becoming more electable.

We leave you with this thought, If George Bush was cancer, and President Obama is chemo, Rick Perry is what it looks like when the cancer returns.



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