Raw Thought

by Aaron Swartz

Hurting Seniors: The Attack on Social Security

[This is part 6 of an article on the power of right-wing think tanks. See also part one, part two, part three, part four, and part five.]

Recent events provide a compelling case study of how this process works. Conservatives have wanted to get rid of Social Security for years. The most successful anti-poverty program in history, it clearly shows how the government can be used to help people — anathema to conservative ideology. Now, with a secure lock on government, is their time to strike. As a White House deputy wrote in a memo that was later leaked, “For the first time in six decades, the Social Security battle is one we can win — and in doing so, we can help transform the political and philosophical landscape of the country.”

There’s extremely strong public support for Social Security — conservatives could certainly never just come out and say they wanted to end it — so their plan is to deceive the public: First, persuade people that Social Security is facing some sort of crisis and won’t be around for the next generation. Second, convince them to begin replacing Social Security with a privatized version. Privatization, the logic goes, will naturally keep increasing until all of Social Security is eliminated. The only problem is that Social Security isn’t facing a crisis and any form of privatization, which would require both paying out to existing retirees and saving away money for the private accounts of the current generation, would worsen whatever financial problems Social Security does have.

But think tanks have been preparing for this moment for years, floating privatization plans and doing their best to persuade the media that Social Security was in imminent danger. So when the Bush administration started up their anti-Social Security campaign, the media knew exactly what to say.

CBS, for example, presented a segment featuring man-on-the-street Tad DeHaven. “I don’t expect to get anything from Social Security, OK?” said young DeHaven. “It’s not going to be there—that’s my assumption.” DeHaven had good reason to say these things: for years, he’s been one of the leading Republican activists in the fight to get rid of Social Security. CBS never mentioned the connection.

A later CBS report boosted fears that Social Security was going bankrupt by displaying a graphic on the screen that read “2042: Insolvent = 0 benefits??” [sic] (“In 2042, Social Security will become insolvent, and today’s young workers risk losing their benefits,” a voiceover explained.) But this just isn’t true: even the pessimistic Social Security Administration concedes that by 2042 Social Security will be able to pay nearly 80% of scheduled benefits, which is still far more than what it pays out today.

Other networks were no better. NBC’s report feature quotes from Bush saying the system would go “flat bust” and an interview with a Heritage Foundation scholar — identified only as a “social security expert” — but allowed no critics to contradict their claims. Meanwhile, an ABC report claimed “One thing everyone agrees on, the Social Security system as it exists now won’t be able to afford those payments for long after the Wilsons retire.” In fact, it’s quite the opposite: even the most pessimistic predictions say that Social Security will be fine until the Wilsons are statistically dead. Again, no critics got got a voice.

Next: Part 7: Fighting Back

You should follow me on twitter here.

June 11, 2006


Do you actually watch the news or read print media? “No critics got a voice?!” The plan for partial privatization was a huge controvery and ultimately failed to materialize in Congress. If the government insists on forcing us to set aside a piece of our paycheck for retirement, why not allow us to invest at least a part of it in private accounts? Not only would the rate of return be much higher than what the government provides, but the account would pass on to one’s children after they died.

posted by John Farmer on June 11, 2006 #

I don’t see why social security is worth keeping, especially for me: a fairly large percentage of my paycheck is subtracted for social security, a percentage I won’t see until I’m sixty five (and honestly, I don’t even wish to live until I’m sixty five). If I had the option of placing into my 401k, I’d be able use ten years earlier and have that money grow at a much greater rate (or, a rate at which I’m comfortable with, given this money is intended for me). If I had total freedom to do what I please with it (which to my knowledge the conservatives aren’t even considering advocating), I’d be able to invest as I see fit (my own preference would be either life insurance annunities or municipal bonds). The tiny payment that I will be receiving at age sixty five (granted I even live to that age, which given my present health/genetics I likely won’t) is easily dwarfed but what I can get out on the market.

posted by Anon on June 11, 2006 #

Read a great take on the social security system lately, I’m quoting:

I’d like you to imagine, if you will, and (with a slightly disgusted shake of his head) it won’t be too difficult, an organization that sold, and is still selling, a retirement investment pension fund. Here’s how it works.

The employees have no choice. They must invest because the ‘powers that be’ don’t believe they have enough sense to invest for themselves; as though they’re some kind of irresponsible children.

They are assured from the beginning that their money goes into a fund in their name and is invested properly, while what the people running the organization do is take the money to pay for other things; extravagances not in any way associated with the retirement account. So the money never actually gets invested. Instead, when the person finally retires, the money they receive comes from the newer people who are now part of the same system. It’s called “pay as you go.” In the 1920s a man named Charles Ponzi was arrested for running such an investment system, hence the name “Ponzi Scheme.”

Investors are assured of a certain percentage return, and that they can retire at a certain age. And there are many other promises; but the promises keep getting broken, and the rules keep getting changed. But no matter how disgusted the investors become, they are not allowed to opt out. They are prisoners in this system.

They are told from the beginning that the money is theirs, but they eventually realize it is not. They don’t control the money and they can NEVER pass it along to their heirs.

And, by the way, because of the way it’s been set up all along, this pension fund will eventually go bankrupt and leave lots of people with no retirement income whatsoever.

[…] how would you feel about a private company in our free-enterprise system running such a shameful program? Would you put its managers in jail? Would you somehow want them punished? More importantly, if you were the ‘investor’ in this case, would you choose to continue to do business with them?

Mainly, I ask, how would you feel about them? Would you be angry and distrustful? Would you do whatever it took to get out of this protect yourself and your loved ones from this type of obvious corruption? I’ll bet you would, and I wouldn’t blame you one bit.

This is your Social Security System.

Source: http://www.theatlasphere.com/columns/050819-burg-openlettergwb.phphttp://www.theatlasphere.com/columns/050819-burg-openlettergwb.php

Disclaimer: I’m far from being conservative.

posted by Anon on June 12, 2006 #

By the way, the first Anon posting here was someone else. ;)

posted by Anon on June 12, 2006 #

As much as I hate agreeing with conservatives about anything, I don’t find your argument particularly persuasive. You say that conservatives are trying to scare us with the message that social security is in imminent danger. You say that privatizing social security will make the situation worse. You pretty much say that the conservatives are flat out wrong. Those are bold statements — statements that you back up with no citations save for a passing mention of a statistic that supposedly came from the Social Security Administration (again no citation).

So, maybe we are okay until 2042 at which time I’ll be 61 — a mere decade (or maybe more by that time I guess) from retirement. If the system fails then, I’m way more screwed than I am if I begin to fix the situation NOW. Of course, any wise person is already investing for their future (I like to think I’m wise, so I am too), but are you suggesting that we do no further examination of Social Security and just hope it works out?

This is the crux of my disagreement with the Democrats (or liberals or progressives or whatever perhaps incorrect label one wishes to use) on the subject of Social Security. They say that the conservatives are wrong and offer up the year 2042 as an example of a far out date that shows that we’re “safe” yet they fail to offer any real solutions to the system. I guess maybe they’re saying their position is that it’s not a problem.

posted by Nicole on June 12, 2006 #

Your writing on these topics is just as bad as anything coming out of the republican think-tanks you are railing against. You are making strong statements and providing no citations. Didn’t you used to be some sort of web programmer? How about a “hyper-link” or two to your sources?

And while we are playing fast and loose with facts and pollable public opinion, I’ll have to disagree with you when you say that there is extremely strong support for social security. Nobody under the age of 50 believes they are going to get anything back from social security. Perhaps this means that the think-tanks succeeded. More likely, enough people have seen the paltry monthly checks their grandparents receive and decided that social security may not be a particularly shrewd investment vehicle.

If this is where you’re going with the writing career, I’d keep the day job…

posted by starkfist on June 13, 2006 #

I fear that there is a deep misunderstanding of Social Security, by John Farmer, Anon, Anon, and starkfist.

I suggest reading the Wikipedia article about Social Security, particularly the history section

The money you pay into the social security system is not set aside to pay for your retirement. The money you pay into the system goes to pay for the retirement of those who have retired. It acts as a safety-net, so that senior citizens aren’t left homeless and peniless. In third-world countries, and the United States of a century ago, families live in the same houses all their lives. Those of working age pay to keep the old and young alive, and those not fortunate enough to have children to care for them end up destitute, on the streets, often dying quickly once they can no longer support themselves.

At the end of the Great Depression, it was decided that as part of the New Deal, a safety net was needed for the elderly, much as we need other safety nets such as bankrupcy laws and orphanage, and unemployment benefits.

The system works by using the money paid by current workers to retirees, keeping them off the streets. And it has worked extrordinarily well. America’s senior-citizens, while many remain in poverty, are irrefutably better off due to the existance of the Social Security program.

Social Security is NOT the problem. The problem is that Republican politicians, starting with Ronald Reagan, figured out that they could replace progressive taxes such as income and estate taxes, with increased Social Security-directed payroll taxes, while increasing spending for the military and for social programs, while claiming that the huge surplus generated by the Social Security program while it had more (baby-boom) workers paying into the system than retirees pulling money out of it, was part of the government budget, and in essence “using that money for other things”. Some of the increased payroll taxes and reduced SS benefits (raising retirement age etc.) is a rational response to the coming of the baby-boom generation, which will require a built-up surplus in the SS system to survive. On the whole, however, it can only be fully understood in its larger context. The end result has been to increase the tax burden on the middle class, while vastly decreasing the tax burden for the super-wealthy, and at the same time put strain on the Social Security system, to the point where it can be claimed by those same Republicans that the system is broken, that Social Security is bankrupt and defunct, with the intent of replacing it with so-called private accounts. The not-so-subtle intent of course is to provide an excuse to reduce Social Security payments to those who retire in 20 or 30 years. By that point, many will have paid into ‘locked’ private accounts, and the public portion of Social Security will collapse under its own weight. For an example of how just such a privatization scheme has worked look no further than Chile, where privatization has had a profound impact on the standard of living of millions of Chilean seniors.

Therefore, Anon, your cute ‘analogy’ is disingenuous. Those who have diverted Social Security funds from their original aims are exactly those who seek to destroy it. The fiscally-irresponsible Republican Party, which has during the presidencies of Reagan, and both Bushes, increased government spending, both military and non-military, while simultaneously cutting progressive taxes and raising the payroll taxes which most affect the middle- and working-classes, is a party of hypocricy and greed. For them (and you) to claim that Social Security is broken is almost comically ironic.

starkfist: I’m not sure I think Aaron’s done quite enough to back his position—some citations would indeed be nice—your ad-hom trolling is stupid.

Be glad your grandparents aren’t starving on the street. And finally, there is broad public support for social security, whatever your intuition may suggest. Look it up. And not in your gut.

posted by Jacob Rus on June 14, 2006 #

Oh, and Aaron. Comments like this:

it clearly shows how the government can be used to help people — anathema to conservative ideology

are not useful in a constructive discussion. They serve only to undermine your points.

posted by Jacob Rus on June 14, 2006 #

Excellent summary Jacob.

posted by greg on June 15, 2006 #


That is exactly my problem with social security: I am forced to pay into a system to support those who paid before me, rather than allowed to save for my own retirement and support myself. Further more, as you have said, it is a regressive tax, so it affects the working and the middle classes even more so (as a full-time salaried Sillicon Valley engineer I have other opportunities to contribute to my own retirement fund and in fact plan to retire early, in any case) - they would be a lot better off if they were allowed to deposit the money taken from them for social security into a 401k.

You are right that it is designed as a safety net: however, as an individualist, I don’t believe that others should be forced to act as a safety net for me (or that I should act as a safety net for others) by force: there are voluntary safety nets availables, such as insurance annunities and guaranteed municipal bonds. They also have the effect of eliminating free riders: those who elect to participate in them (i.e.: prefer to live paycheck to paycheck) receive no benefits from them.

You are right, that I wish conservatives (of whom I am not - I despise the militarist/religious right as yet another form of collectivism) were more straight forward in saying that they do not believe in a safety net system, which however tends to demonstrate the exact opposite of the “anathema to ideology” theory: they are rather driven to it by special interests (quick summary of US political systems: Republicans are controlled by Wall Street financiers, Democrats are controlled by trial lawyers) rather than any ideological position.

posted by First Anon on June 16, 2006 #

Someone once said that the Democrats are interested in increasing the size of the pie, the Republicans just want a bigger piece of it. That may or not be true, but I’m inclined to believe it. Purely voluntary safety net programs are worthless to those who live check-to-check, and there are a lot of people like that. In a Republican world, where people are forced to confront reality (and miracles occur), the poor would naturally do what’s in their long-term best interest — you see, fiscal conservatives have an abundance of faith in human nature. But I wouldn’t count on it. For the liberal-elitist explanation of why, here’s a primer: http://www.harvardmagazine.com/print/030640.html.

posted by ab3nnion on June 21, 2006 #

For Anon who left a message in June of 2006. The Republican overhaul for Soc Sec is based on a plan developed by the CATO Institute. This plan has been implemented in Chile. Read my blog at:

The CATO plan will only allow investors to select among a variety of Mutual Fund plans. Those who believe they will be able to invest in individual stocks, should Soc Sec be converted to a private plan, will be sorely disappointed.


posted by Ron on July 8, 2006 #

Wow! Look at the comments conservative types leave for you. Seems almost… targeted and organized.

posted by Lance Pierce on September 1, 2007 #

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