Dan Grey – 3/21/05

This page was last updated on March 23, 2005.

What is Santorum’s real goal?; Dan Grey; Beaver County Times; March 21, 2005.

Below is a detailed critique of the subject letter.

“Sen. Rick Santorum’s letter to the editor (‘Lifting cap is no solution,’ March 11) on Social Security lacked specific believable facts.”

[RWC] As you will read below, Mr. Grey has no business accusing anyone of lacking “specific believable facts.”

“That’s not surprising since at most of his political events on the subject, the audience erupts in chants of ‘Social Security must go.’

[RWC] I doubt this comment is true. After all, what Republican would want the chant to appear on television, and that’s exactly what would happen.

“Specifically, how many small businesses in the United States, Pennsylvania or Beaver County now pay their employees more than $90,000 a year? Are there really millions?

“If not, raising the cap does not affect the tax liability of businesses that pay employees each less than $90,000 a year, which I bet is most small businesses.”

[RWC] Mr. Grey forgets small business owners are also employees who draw a wage, and that wage is subject to Socialist Security – and Medicare – taxes. I could be wrong, but I suspect quite a few small business owners earn more than $90,000/year. As a reminder, the max tax earnings cap increases every year by law.

“Those businesses would benefit only by the total elimination of Social Security taxes. Is that Santorum’s goal? The people most affected by ‘soaking the rich’ (Santorum’s words) wouldn’t be the workers at a small business or even the owner in most cases.

“Corporate executives, who spend too much time plotting ways to export American jobs overseas and too little time on ways to export American products, would pay more tax.”

[RWC] Those darn evil “corporate executives.” I know it may bother Mr. Grey, but CEOs spend their time trying to maximize company profits. That’s their fiduciary and moral responsibility to company shareholders, and those shareholders include pension funds. They don’t spend their “time plotting ways to export American jobs overseas.”

“And yes, they do owe the American worker, whose blood, sweat, and toil put them there, a decent retirement, no matter what Santorum thinks.”

[RWC] All CEOs “owe the American worker” is a market-driven wage. I’d say “a fair day’s wage for a fair day’s work,” but liberals have warped the meaning of “fair.” It’s the worker’s responsibility to plan and save for “a decent retirement.” After all, who in their right mind would voluntarily put their retirement in the hands of politicians?

“Secondly, why does more money coming into the system mean more money owed later? Because the politicians in D.C. immediately spend all Social Security revenues, replacing them with IOUs payable by us at a later date, with interest. That’s a pyramid scheme if ever there was one.”

[RWC] Mr. Grey didn’t do his research. If the “rich” pay more SS taxes, they will receive more benefits. That’s how Socialist Security has always worked. The more taxes you as an individual pay, the more benefits you as an individual receive, up to a point. Though SS favors low-income workers a bit, it was not designed to take money from the rich and give it to the poor.

Regarding the IOU issue, Mr. Grey is correct in noting SS is a pyramid – a.k.a. Ponzi – scheme. Mr. Grey should remember it was his beloved Democrats who designed SS to behave this way.

“Private accounts, as championed by Santorum, may not be bad. Paying for them by borrowing $2 trillion and handing it over to private investment businesses is a disaster.”

[RWC] Whatever we need to borrow to compensate for personal accounts would go to paying benefits to then-current SS recipients. This is not the money that would be invested.

Even the funds workers designate for personal accounts won’t be “handed over” to private investment firms according the quote below.

“Most of these administrative costs are for recordkeeping which would be done by the government, not investment management done by Wall Street. (Report of the 1994-1996 Advisory Council on Social Security, p. 171 & January 31, 2002 Memorandum from the Social Security Actuary in the Final Report of the President’s Commission on Social Security, p. 19).”

The process would be modeled after the existing federal Thrift Savings Plan (TSP), a voluntary retirement savings plan offered to Federal employees, including members of Congress.

You can find this information at http://www.whitehouse.gov/infocus/social-security/200501/strengthening-socialsecurity.html.

“Any insistence by the administration on that format makes bipartisanship a nonstarter. Democrats want to save Social Security, not destroy it.”

[RWC] This is nearly a quote of Rep. Nancy Pelosi (D-CA). Did you note the hypocrisy? It’s not bipartisan to insist on personal accounts, but it is bipartisan to insist on taking personal accounts off the table.