Privatizing Social Security: Reason #6,467,982 not to vote McCain

June 12, 2008 · Posted in Domestic Policy, Election 2008 

The very first blog post I ever wrote was a screed dressing down George W. Bush for even thinking about privatizing Social Security, and now we have John McCain endorsing the same policy.

Privatizing Social Security is the very worst idea the Republicans have ever brought forth. It’s nothing more than a money grab intended to take away what few retirement benefits are available to lower and middle class workers.

Consider this: If George W. Bush’s effort to privatize Social Security had been passed, every American within 15 years of retirement could have lost over 50% of their retirement accounts in the last 8 years as a result of market fluctuation, malfeasance (think “subprime mortgage crisis”), and fees.

All it should take to convince anyone to back away from privatized Social Security is an understanding of where the money goes. Right now, Social Security is backed by the full force and guarantee of the federal government. That’s how it must remain. Privatizing it, even a portion of it, means sending money to the very same Wall Street investment banks that the federal government just bailed out.

It means the possibility of your retirement dollars invested abroad. It means there are no longer any guarantees.

When John McCain says he doesn’t understand economics, he tells the truth. He also doesn’t understand how pensions and Social Security work.

Privatizing Social Security means only one thing: The government wants to shirk the responsibility to pay guaranteed pensions to citizens who have paid into the system for their entire working lives, not to mention their employers, who match the employee contribution. Among the Republican proposals, this one is the most insidious and yes, even criminal. They lie and say they’re empowering citizens, when they’re robbing them.

McCain has walked back his statements, just a little. But not enough. Here’s what he says today:

John McCain supports supplementing the current Social Security system with personal accounts–but not as a substitute for addressing benefit promises that cannot be kept. John McCain will reach across the aisle, but if the Democrats do not act, he will. No problem is in more need of honesty than the looming financial challenges of entitlement programs. Americans have the right to know the truth and John McCain will not leave office without fixing the problems that threatens our future prosperity and power.

Here’s what he said in 2004:

Q: Will privatizing Social Security be a priority for you going forward?

McCAIN: Without privatization, I don’t see how you can possibly, over time, make sure that young Americans are able to receive Social Security benefits.

In addition to the veiled contradiction, his current position is dishonest. Exposing the lies:

  • Social Security is not an “entitlement program“. Social Security is paid for by employees and employers, as is Medicare. The benefits provided by Social Security are earned, not given.
  • Social Security can ALREADY be supplemented with personal accounts. That’s what IRAs, Roth IRAs, 401(k) plans and employer Profit Sharing plans are. Of all the lies, this one is the most offensive. While Republicans claim that Democrats support big government and spending out of one side of their mouths, they advocate for a mandated retirement savings program that shifts the burden of providing guaranteed and earned benefits from the government to the individual. Should every individual be saving for their retirement? Absolutely, without question. But the mechanisms are already in place for that to happen. The suggestion that a mandate will stabilize Social Security is just specious, and smacks of Big Brother intervention.
  • Finally, what does he mean by “If the Democrats do not act, he will.” Will he simply bypass the Congress and will of the people with an executive order abolishing Social Security?

Here’s a hint to John McCain and the Republicans: After 8 years of seeing what little financial security they had ripped away by investment bankers’ malfeasance and Republican greed, Americans are not going to take kindly to your efforts to shear away what little tiny bit of security they might have for retirement. This is particularly true of those of us who fall into the Baby Boomer generation, who have seen Republicans slide their retirement dates from 65 to 70 over the past 10 years.

Leave Social Security alone. Shore it up, quit using it as a credit card to bury war costs into the budget. And above all, do not let John McCain and the Republicans take your retirement dollars and hand them to liars, thieves and Wall Street greed.

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Comments

  • ursulas

    I can't stand John McCain, the Bush regime sock puppet. That's all he is. Bush armpit sucker.

  • http://www.drumsnwhistles.com/ Karoli

    I'm not sure I'd go that far, though it sure seems like he's drinking the Bush Kool-Aid these days. It's really disappointing in many ways to see a guy who has been respected for his service sell out to a failed set of policies. Especially after branding himself as a 'maverick'.

  • http://christianburns.wordpress.com/ christian

    I know you are not going to like this but you are completely wrong about what Social Security is and how it works. It was spent long before the war in Iraq.

    Social Security is sold to us as belonging to us, but it does not, and it is in fact an entitlement program.

    It is a horrible way to “invest”.

  • http://www.drumsnwhistles.com/ Karoli

    I respectfully disagree. There are some real problems with how Social
    Security is funded, but it is not an entitlement program. Welfare could be
    called an entitlement, but not Social Security. The primary flaw in Social
    Security is the pay-as-you-go funding arrangement, which has never been
    permitted in the private pension system and shouldn't be permitted in the
    Social Security system either. However, privatizing Social Security is no
    answer at all. It doesn't address how it's funded or how benefits are
    calculated.

    While it's very popular to shrug and write off Social Security as nothing
    more than an entitlement, it's actually much more nuanced than that. The
    attitude of dismissal is partly responsible for the condition Social
    Security is in. While the Congress is overly diligent about overseeing
    private pension law and funding rules, it is equally lax about how Social
    Security is funded and structured. Dropping that ball and handing it to the
    private pension system is a grave mistake, as any participant in a Defined
    Benefit plan provided by their employer can attest.

  • johnnyb

    Just phase out Social Security as soon as possible. Guess what Baby Boomers… You guys have already spent your social security money on big government programs and absurd benefits for yourselves. There is no money.

  • http://www.drumsnwhistles.com/ Karoli

    I love comments like yours that have no basis in fact, no supporting
    documentation and just make stupid pronouncements that don't bear any
    relationship to the truth. Have another glass of Kool-Aid.

  • http://christianburns.wordpress.com/ christian

    Its a really bad use of money, period. I don't want my kids to have to continue to be forced to throw money down the toilet.

    You get to apply for benefits at the right age and are paid based on how many quarters you paid int the system. But its still an entitlement http://en.wiktionary.org/wiki/entitlement?rdfro…

  • http://christianburns.wordpress.com/ christian

    Actually he is correct. I liked Ron Paul's plan to continue to provide for those that need it, but be honest with the next generations and phase out this deceptive program.

  • http://www.drumsnwhistles.com/ Karoli

    Christian.

    For him to be correct, he would need to explain why social security funding has run in the black since 1976, and has reserves set aside of more than 2 trillion.

    He can't explain it without clearly articulating that the bonds issued by the government and purchased by the trust fund have funded Bush deficits for the past eight years, primarily for the war. When Clinton left office the surplus was nearing the point of retiring those bonds.

    For him to be right, one must acknowledge the complete failure of the Bush Doctrine as the 'ridiculous' program bankrupting social security.

    The problem with the Ron Paul theory of governing is that it is predicated on the assumption that society is a collection of people with no moral or social obligation to one another, where individual is king. I disagree.

  • http://christianburns.wordpress.com/ christian

    Not trying to flame, just getting to the crux of how we see this issue. I appreciate this dialog.

    Just because we can say that SS has “run in the black” right now, does not mean that the note will come due, and our kids are going to be forced to pay for it. This is where the idea is backwards. Our goal as parents should be to work hard and save up enough so that at the end of our lives we have not spent more that we made. Hopefully we should have something to leave our kids. But with social security, the FedGov collects the savings, spends it, and then asks us to trust that they have the math worked out.

    The only way you can make that math work is to have a much higher birth rate than we have now, or much more immigration. We need more workers. Which turns into a ponzi scheme or a game of musical chairs. Someone is going to lose one way or the other.

    That math will never work out.

    Its not just the bush spending, its been going on for years. Politicians and big government are who spent it.

    The full faith and credit of the united states is in the ability to increase debt or increase taxes, thats it.