[dc-critmass-list] Gar Alperovitz

[Michael Ross]

January 31, 2005



Time for Moral Outrage About Social Security

by Gar Alperovitz

I’m a political-economist, teaching at a major 
university. In a recent book I’ve offered my 
analysis of the problems facing Social Security, 
along with my preferred solutions. I’d be happy 
to discuss these at another time, but not now. 
The reason? It’s become obvious to me that we are 
all off the mark–just about all of us: 
economists, politicians, pundits. And it’s not 
because we’ve done the arithmetic wrong.

What is missing from our analyses–and from our 
national conversation–is a sense of outrage. We 
are far too cool about the current realities, and 
about the implications of the various 
proposals–especially (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 
relative’s affairs after she recently went into a 
nursing home in Wisconsin . I noted–and then (for 
the first time really) began to think about–two 
things. Number one was her Social Security check, 
which after a lifetime of work as a baker, 
amounted to $760 a month–up 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 this–and 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 
month–i.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 
year–which 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 
Security–and 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 I’ve 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 life–especially 
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 one’s career should increase as the 
nation’s 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 O’Neil, 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 O’Neil’s 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 woman–and 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 
century’s end. There should be more than enough 
to go around if we get our priorities straight.

It’s time for all of us to confront the moral as 
well as the economic questions at the heart of 
the Social Security debate. I’m one blue state 
American who is more than willing to join hands 
with the Robert Fogels and Paul O’Neils 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. 
<http://www.garalperovitz.com/>http://www.garalperovitz.com. 
© 2005 Gar Alperovitz. Used with permission.