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Recent
Stories
August
4, 2003
Bruce
Jackson
News that Isn't News: How the NYT's
Pimps for the White House
August
2 / 3, 2003
Alexander
Cockburn
Meet the Real WMD Fabricator: Rolf
Ekeus
Tamara
R. Piety
Nike's Full Court Press Breaks Down
Francis
Boyle
My Alma Mater, the University of Chicago, is a Moral Cesspool
David
Vest
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Neve Gordon
Nightlife in Jerusalem
Uri
Avnery
Their Master's Voice:
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Robert
Fisk
Paternalistic Democracy for Iraq
Jerry
Kroth
Israel, Yellowcake and the Media
Noah Leavitt
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Landau
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Ron Jacobs
One Big Prison Yard: the Meaning of George Jackson
Thomas
Croft
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Amadi Ajamu
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Poets'
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August
1, 2003
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Stopping Prison Rape
Alex Coolman
Who Moved My Soap: Trivializing
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Steve
J.B.
Prison Bitch
Stan Goff
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Wayne
Madsen
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Robert
Fisk
Wolfowitz the Censor
Elaine
Cassel
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July
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Hull
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August
4, 2003
Fear
Mongering for Privatization
Social
Insecuriy
By
DAVID LINDORFF
Here's an interesting question: Why does the corporate
media keep parroting rightwing pols and "experts" when
they prattle on about a crisis in Social Security?
Take Business Week, which in its current
issue runs an interview with new Bush Office of Management and
Budget Director Josh Bolten. In a August 11 issue Q&A, Business
Week Washington writers Rich Miller and Howard Gleckman quote
Sen. Kent Conrad (D-ND) as saying that now is the last chance
to reduce the national debt before the retirement of the baby
boomers. Bolten replies that the Social Security and Medicare
systems are "structured in a way that our resources ultimately
will not be able to pay for them," and that "we need
to take a very hard look at their fundamental structure."
Bolten goes on to say that while "the
environment hasn't been ideal to pursue a major change in social
Security," that President Bush "will want to pursue
it at the earliest opportunity" and that "reform"
ideas are all "built around personal accounts."
Like the rest of the mainstream media,
Miller and Gleckman don't question Bolten about the nature of
the alleged crisis in Social Security, nor do they challenge
his assumption that the only valid approach is privatization.
In fact, if reporters would just talk
to the technocrats, as opposed to the politically-appointed wreckers
in charge at the  Social Security Administration,
they'd learn that the alleged "crisis" facing the system
is no crisis at all.
First off all--the magnitude of the problem:
the funding deficit facing the Social Security Trust Fund, which
would see the system paying out more than it takes in, beginning
in 2018 (thanks to the baby boom rise in retirees), and which
would exhaust the Trust Fund in 2042, assuming no changes in
payroll taxes or payout levels, could be completely eliminated
by simply increasing the payroll tax paid by employers and employees
by a combined 1.92 percent. That is, for a person earning $30,000
a year, the social security tax on employer and employee would
have to be raised by $288 each.
How often have you seen that little number
bandied about in the media when they talk about switching the
system over to voluntary private accounts on which workers could
lose their shirts?
But that's not all. According to Social
Security's green eyeshade analysts, if the cap on income taxed
by Social Security--currently set at about $80,000, were lifted,
so that all income was taxed, even including paying out higher
benefits to those rich folks paying the extra taxes (the same
rich folks who just got the lion's share of Bush's mammoth tax
cuts), almost all the Trust Fund's looming deficit would be eliminated.
According to the analysts, it would at
that point only require an increase in the payroll tax of 0.15
percent (divided equally between employer and employee) to completely
close the gap. That would mean an extra Social Security deduction
of $22.50 a year or about 44 cents a week on that $30,000 income.
But beyond this, there is the political
matter of who could or should pay to solve the problem.
For some reason, the idea of having employer
and employee share the contribution to workers' Social Security
on a 50/50 basis has been treated as sacrosanct. It's been this
way since the program's inception, but the truth is, there's
nothing magic about this formula.
Instead of making workers pay more into
the fund to prepare for the arrival of baby boomer retirees,
why not shift the burden onto employers? For example, instead
of increasing the tax on workers and employers by 0.96 percent
to eliminate the future deficit, why not just hit employers with
the whole 1.92 percent increase?
And while we're at it, why not shift
another 1.5 percent of the employee tax over to employers?
Conservatives, and many conservative
economists, argue against such a shift in the calculus of Social
Security taxation, claiming that shifting the tax onto employers
would not really reduce taxation on workers. They claim that
employers would simply take the higher taxes out in the form
of lower wages or higher prices for goods and services.
This is false, however. If one assumes
that the U.S. operates as a free labor market, wage rates are
determined by the laws of supply and demand, and workers, especially
in times of relatively full employment, work for wages which
they consider adequate for the work being performed. Employers
can't set wages arbitrarily at any level they choose, any more
than they can determine how much they will pay for raw materials
(if they could, companies like McDonald's would be paying the
minimum wage, not $8 an hour). Similarly, in a global economy,
employers can't set prices for their products based simply on
their cost of labor and materials. Prices are determined by demand.
In other words, by and large, higher Social Security taxes on
business would have to come out of profits.
The proof of this is the furor that is
created among business leaders if anyone even suggests shifting
the Social Security tax burden onto them. If they really could
just pass the tax increase on to workers in the form of lower
wages, they wouldn't really care about the split.
The other advantage of shifting the tax
more onto employers, of course, is that the tax cut for workers
would be highly progressive (the Social Security tax itself is
highly regressive, hitting the poor the hardest, so reducing
it would be highly progressive). In other words, cutting the
employee share by 1.5 percent would put an enormous amount of
cash into the hands of people who would immediately spend it
into the economy, giving the economy a huge boost. (That $30.000
wage earner would gain $450 a year with a 1.5 percent cut in
the payroll tax--$50 more than the Bush child care credit rebate
which left out 8 million of the lowest income families.)
Why don't we hear about these facts?
Why is the talk in government and media
always about "crisis" and "bankruptcy" when
it comes to Social Security?
Well, for one thing, the media is composed
of big business entities, and they don't want to pay those increased
taxes.
More importantly, the conservatives ruling
in Washington aren't really interested in saving Social Security.
They want to destroy it through privatization.
Meanwhile, liberal politicians are so
cowed that they don't dare offer up any alternatives, though
the answers are staring them in the face.
It's time for progressive politicians
to call the conservative Establishment (Republican and DLC Democrat)
on this.
Social Security needs real reform, and
the way to do it is to raise taxes on the rich and on business.
It's also time for the media to report
honestly on Social Security reform.
Dave Lindorff
is the author of Killing
Time: an Investigation into the Death Row Case of Mumia Abu-Jamal.
A collection of Lindorff's stories can be found here: http://www.nwuphilly.org/dave.html
Weekend Edition Features for August 2/3, 2003
Alexander
Cockburn
Meet the Real WMD Fabricator: Rolf
Ekeus
Tamara
R. Piety
Nike's Full Court Press Breaks Down
Francis
Boyle
My Alma Mater, the University of Chicago, is a Moral Cesspool
David
Vest
Sons of Paleface: Pictures from Death's Other Side
Neve Gordon
Nightlife in Jerusalem
Uri
Avnery
Their Master's Voice:
Bush, Blair and Intelligence Snafus
Robert
Fisk
Paternalistic Democracy for Iraq
Jerry
Kroth
Israel, Yellowcake and the Media
Noah Leavitt
What's Driving the Liberian Bloodbath: Is the US Obligated to
Intervene?
Saul
Landau
The Film Industry: Business and Ideology
Ron Jacobs
One Big Prison Yard: the Meaning of George Jackson
Thomas
Croft
In the Deep, Deep Rough: Reflections on Augusta
Amadi Ajamu
Def Sham: Russell Simmons New Black Leader?
Poets'
Basement
Vega, Witherup, Albert and Fleming
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