Bush plan
Serve up Social Security to Wall Street hogs
By Milt Neidenberg
A huge ripoff of the Social Security Trust Fund is in the
making. The post-World-War-II baby boomer generation is the
target.
In a preemptive strike, before the Ohio presidential votes
were officially re count ed, President George W. Bush announced
that "reforming" Social Secur ity is a top priority of his
second term.
"Reform" is Bush's code word for privatizing Social Security
contributions in personal accounts to be invested in stocks and
bonds.
Currently, workers put 6.2 percent of their annual wages,
capped at $87,900, into Social Security trust funds that are
invested in Treasury bonds. Employers add another 6.2
percent.
Wall Street is ecstatic over the Bush caper--which would
transfer billions of dollars from the federal trust fund to
private accounts that would end up in the coffers of publicly
traded companies. Whether it will be mandatory or voluntary
remains to be seen.
According to the Nov. 11 Wall Street Journal, the transition
costs--that is, the cost of removing money from the trust fund
and into private accounts--could reach $2 trillion.
White House collusion with Corporate America, transnational
banks and other financial institutions is scandalous. They
stand to reap billions of dollars in fees as the government
cheers them on.
In the pirates' hands, stocks and other speculative
financial instruments would put baby boomers at great risk,
especially in a volatile market. The baby boomers have invested
their hard-earned wages in a safety net they hoped would assure
them some financial security in their senior years.
Bush's plan is to scuttle their benefits and/or force them
to work past age 65. It would also lead to higher Social
Security taxes and additional debt--another burden for the
workers and the oppressed.
Sabotaging Social Security extends the cruel and inhuman
punishment that U.S. monopoly capitalism is noted for. An era
of high-tech revolution has already generated intense stress on
this generation of workers.
Productivity--the whip of speed-up--has increased to
double-digit levels. Employers make more demands to fatten
their profits. Safety and a healthy work environment are
ignored. Workers are more prone to injuries and illness while
health-care benefits rapidly shrink.
They need to retire earlier, not later, and be compensated
far more than seniors now receive under the law.
Scare tactics
In order to grab the bonanza of privatizing Social Security,
the Bush administration and Wall Street are waging a sinister
campaign of lies. They claim that the trust fund faces
insolvency.
Not so!
The worst-case scenario is that the increase in costs would
grow over the next 50 years as retirees come to outnumber those
paying into the system. Social Security beneficiaries are paid
from the contributions of current workers. This is not the same
as insolvency.
(Of course, it is to be hoped that 50 years from now
socialism will not only be solving the problems of growing old,
but will have wiped out the whole system of capitalist
exploitation.)
Why the scare tactics? Do only greed and profit motivate
these moguls of wealth?
The trust fund has already been unlocked and depleted, to
pay down the huge national debt and keep the government
solvent. The earlier accumulated surpluses have been replaced
by IOU's--bonds and notes. Soon the government IOUs will have
to be marketed to pay for the retiring baby boomers.
If the private sector, globally and at home, and foreign
central banks buy the debt, they will demand higher interest
rates to compensate for the risk factors. As the deficit spikes
and the dollar declines, the problems will be exacerbated.
Rising interest rates would add billions more dollars to the
national debt.
There is a gathering storm enveloping the U.S. imperialist
government. The manipulation of the Social Security Trust Fund
is an integral component of it.
The Bush administration faces the staggering problem of an
endless and costly war in Iraq. Homeland Security is a
financial bonanza for government contractors. A permanent tax
cut feeds the wealthy one-percenters. There is a trade
imbalance that won't go away. And payoffs must be made to
Bush's right-wing, racist, anti-union cronies for getting him
elected.
The bills are piling up.
Asian countries alone lend the U.S. $1.8 billion a day.
According to the Organi zation for Economic Cooperation and
Development, the United States is expected to borrow $670
billion this year from the rest of the world.
Easier said than done
Social Security, Medicare/Medicaid and social services are
on the chopping block. There is a growing consensus that
creating private individual Social Security accounts is only
the first step. The pretense is that Washington is trying to
fix a problem, when it really wants to get rid of Social
Security and pull the government out of the retirement business
altogether.
It has been 70 years since the government was forced to deal
with the demand of compensation for retired workers.
A national social security program was first discussed in
1934. The crises of a depression, overall poverty and the aged
were obvious. But it was all talk.
It took a year with more than three general strikes, sit-ins
and the threat of social revolution to get the government and
Wall Street tycoons to respond.
The Social Security Act became law in 1935, along with
dozens of laws such as the Wagner Labor Act--labor's Bill of
Rights--and the National Recovery Act. These were passed to
appease the 35 million unorganized industrial workers who were
determined to push aside repressive laws and institutions that
had exploited them for decades.
The Congress of Industrial Organi za tions was born. The
courage and boldness workers displayed to win their demands
were contagious. Workers had a sense that the long period of
defeats, repressive legislation and broken strikes was coming
to an end.
Today, the workers and the oppressed have again suffered a
long string of setbacks. The baby boomers and those who will
follow are in debt over their heads. The benefits accrued to
them--pensions, Social Security, health care--are vanishing
along with their savings.
Are those explosive days of the 1930s class struggle
bubbling within the workers, the unemployed and the
unorganized? The Bush administration is playing with fire as it
plans to savage the Social Security Act of 1935.
The labor movement and class-conscious workers should
remember that it took a bold and creative strategy to get
progressive laws passed. The lessons of class struggle are
clear. It begins from below.
Reprinted from the Dec. 16, 2004, issue of
Workers World newspaper
This article is copyright under a Creative
Commons License.
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