This page was last updated on August 6, 2010.
Altmire Blows Smoke to Hide His Plan to Steal Social Security; Randy Shannon; Progressive Democrats of America – PA 4th CD Chapter; August 3, 2010.
8/6/10 - A couple of days after I originally posted this critique the Socialist Security Trustees published their 2010 report. Except for the DI portion of the SS “trust fund” which now is estimated to become depleted by 2018 instead of 2020, the SS figures cited below remain accurate.
The leadership of Progressive Democrats of America – PA 4th CD Chapter consists of Tina Shannon (chairperson), Randy Shannon (treasurer), and Carl Davidson (webmaster), a self-described Marxist who once “tr[ied] to create a new communist party.” They also appear to be the leaders of Beaver County Peace Links. The Shannons were also leaders of the apparently-defunct Beaver County Coalition for Social Justice. In the Committees of Correspondence for Democracy and Socialism (CCDS) [originally a splinter group of the Communist Party USA (CPUSA)], Mr. Davidson is a co-chair and the Shannons are members of the CCDS national coordinating committee.
The purpose of this critique is to show the fantasyland leftists live in.
Consider the following excerpt from the subject piece.
“There is no problem with Social Security. Social Security is solvent and has a large surplus to support the baby boomers as they retire.
“The Social Security is invested in US Treasury bonds. These bonds are the only debt of the US government that is not owed to the banks or to foreign governments. It is owed to the working people. It is money created by work that adds value to the economy. So the banks plan to steal this money by raising premiums and raising the retirement age.”
Before I proceed, consider the facts Mr. Shannon hopes you don’t know. According to the Social Security Trustees in their 2009 report to Congress, SS was to go into deficit (benefits paid exceed SS taxes collected) in 2016, the Disability Insurance portion of SS will be bankrupt in 2020, and the overall SS “trust fund” (the equivalent of a stack of federal government “IOUs” for revenue already spent by the feds for other programs) will be exhausted by 2037. Because of the current recession, news reports indicate SS is already in deficit, a full six years ahead of last year’s projection. We won’t know if that’s accurate until the 2010 report to Congress, already three to four months late. Why?
“There is no problem with Social Security?” SS is a Ponzi scheme by design (More about that later.). That is, SS requires an ever-growing SS taxpaying population and a high multiple of current SS taxpayers relative to current SS beneficiaries, and/or ever-increasing SS tax rates, and/or ever-decreasing benefits. Any such system has failure built in. Remember, your SS taxes don’t pay for your benefits. Your taxes pay for the benefits of current SS beneficiaries, just as tomorrow’s SS taxpayers will (hopefully) pay for your benefits. Medicare operates the same way. Therefore, even if our SS taxes hadn’t been spent by the feds for other programs, SS would fail. Think Bernie Madoff on a mega-scale.
I wrote above SS is a Ponzi scheme by design, but why would someone design a system they knew would eventually fail? FDR addressed this in response to payroll tax critic Luther Gulick in 1941. FDR said, “I guess you’re right on the economics, but those taxes were never a problem of economics. They are politics all the way through. We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.” The quote was cited by Arthur M. Schlesinger in “The Age of Roosevelt: The Coming of the New Deal,” Houghton Mifflin, 1988 American Heritage Library edition. Pgs. 308-309.
“The Social Security is invested in US Treasury bonds.” Some “investment.” I don’t know if Mr. Shannon noticed, but we’re now running annual deficits in excess of $1 trillion and our current federal debt is in excess of $13 trillion, or about $120,000/taxpayer and increasing. Local and state government debt adds about another $3 trillion. On top of that we have in excess of $109 trillion in unfunded liabilities [SS + Medicare (including Part D)], or over $354,000 per citizen.
“These bonds are the only debt of the US government that is not owed to the banks or to foreign governments.” Not true, all kinds of people and organizations buy U.S. Treasury bonds for IRAs, 401(k)s, pension funds, et cetera.
“It is owed to the working people.” It depends on which definition of “working people” Mr. Shannon is using. More often than not, “working people” is leftyspeak for union members, just over 37% of government employees and just over 7% of the private sector workforce. A more general definition provided by Carl Davidson is, “If someone else [signs your paycheck], you’re in the working class.” I suspect most business owners - large or small - (who pay SS and Medicare taxes just as the rest of us) would be surprised to learn they aren’t “in the working class.”
“So the banks plan to steal this money by raising premiums and raising the retirement age.” What is Mr. Shannon talking about? How does “raising premiums {What premiums? SS is funded entirely by SS taxes.] and raising the retirement age” put money in the hands of banks?
The rest of Mr. Shannon’s piece is of similar quality.
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