[dc-critmass-list] Gar Alperovitz
jmichaelross at verizon.net
Tue Jun 20 08:44:31 PDT 2006
January 31, 2005
Time for Moral Outrage About Social Security
by Gar Alperovitz
Im a political-economist, teaching at a major
university. In a recent book Ive offered my
analysis of the problems facing Social Security,
along with my preferred solutions. Id be happy
to discuss these at another time, but not now.
The reason? Its become obvious to me that we are
all off the markjust about all of us:
economists, politicians, pundits. And its not
because weve done the arithmetic wrong.
What is missing from our analysesand from our
national conversationis a sense of outrage. We
are far too cool about the current realities, and
about the implications of the various
proposalsespecially (but by no means limited to)
those emanating from the White House.
My own all too slow burning sense of outrage
began when I took over management of an elderly
relatives affairs after she recently went into a
nursing home in Wisconsin . I notedand then (for
the first time really) began to think abouttwo
things. Number one was her Social Security check,
which after a lifetime of work as a baker,
amounted to $760 a monthup the huge sum of $11 from $749 last year.
Number two was the supplemental insurance program
which she pays for out of this--at a cost of
$312.40 a month. That leaves her with $402.60 a
month. But ignore thisand focus only on the $760
per month she receives from Social Security.
Most of the people dealing with policy concerning
Social Security, like me, are middle or
upper-middle class professionals. I suspect that
most readers are as well. So ask yourself the
obvious question: Could you live on $760 a
monthi.e., $9,120 a year? What would it mean?
And what happens if payments are cut by as much
as a third, as would occur under some of the
schemes being put forward by Bush Administration
officials? And even at $760 a month or its future
equivalent, would you personally rely for your
security on a risky stock market bet like that
involved in privatization plans? Keep in mind
that Social Security is essentially the sole
source of income for one-third of Americans over age 65.
This is the richest country in the history of the
world. What the hell are we talking about when we
propose schemes like this which threaten people
living at the bottom end of the system? And
indeed this is hardly the bottom! Social Security
payments for very large numbers are less than
this. The median is currently around $11,000 per
yearwhich means fully half are under the mid-point (many far under).
Dealing with our current problems does not
require sophisticated deliberation about
complicated policy scenarios. There are obvious
ways to fix the difficulties facing Social
Securityand at some level of awareness I believe
almost everyone understands this. The simplest
place to begin is with one of two recognitions:
First, if we want more revenue, then payroll
taxes which currently do not apply either to
earnings above $90,000 or to non-wage/salary
income (e.g. dividends and capital gains) should
be raised. Currently a person making $300,000 a
year pays exactly the same into the Social
Security Trust Fund as someone making $90,000
because of the present ceiling. The system is
financed in a highly regressive manner: above
$90,000 the more you make the lower the percent of your income you pay.
Second, as many have pointed out, taking back
some part of the huge tax cuts given to those at
the very top by the Bush Administration could
easily solve any problems which the system may possibly face down the line.
I come from the progressive side of the debate, a
liberal if you like. But, frankly, the best
things Ive read about this have come from honest
conservatives who have been willing to challenge
the kinds of ideas being put forward by the neos now in power.
Two in particular have made the point that the
richest country in the history of the world
should be increasing, not decreasing its support
for those in the final years of lifeespecially
as time goes on and as technological progress
moves the nation ever upward economically.
The Nobel prize winning conservative economist
Robert Fogel has outlined a comprehensive plan
radically different from the solutions proposed
by those on both side of the aisle who would save
money by delaying the age and thereby reducing
the total years of retirement. Fogel suggests
that this wealthy nation should begin retirement
earlier (routinely at age 55)and he further
argues that the number of years free from work at
the end of ones career should increase as the
nations wealth increases over the course of the century.
Fogel does not flinch from the implications. For
low income people his plan would be financed in
significant part by a tax of 2 or 3 percent
applied progressively to the top half of the income distribution.
Another conservative, former Bush Treasury
Secretary Paul ONeil, has also recently proposed
a system of savings and investment which would
yield the equivalent of a million dollar annuity
for every American. It too would be financed by
taxes based on the idea that those of us who are
more fortunate can help those of us who are not.
A very frightened elderly woman in Indiana asked
me a question in the course of a recent talk. Her
voice quivered as she stammered: Are they going
to cut my Social Security soon...? How soon...?
The current fear mongering, crisis politics is
both morally and economically outrageous. I like
very much ONeils retort to those who say that
bold proposals are not possible: Baloney! If we
can give away trillions in tax cuts, we can help
this womanand many more. A current estimate is
that if the United States merely does as well in
the 21st Century as it did in the 20th, the
economy will be producing the equivalent of at
least $1 million a year for every four people by
centurys end. There should be more than enough
to go around if we get our priorities straight.
Its time for all of us to confront the moral as
well as the economic questions at the heart of
the Social Security debate. Im one blue state
American who is more than willing to join hands
with the Robert Fogels and Paul ONeils of this world and get on with it.
Gar Alperovitz, author of America Beyond
Capitalism, is Lionel R. Bauman Professor of
Political Economy at the University of Maryland.
© 2005 Gar Alperovitz. Used with permission.
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