Pat Toomey Plots Demise Of Social Security
Senator-Elect Pat Toomey has provided yet another indication of the Republican Party’s plan to attack Social Security. Speaking on Meet The Press, Toomey explained that, while Social Security will not be completely eliminated, it will be radically altered.
He said, “On the entitlement reform, nobody’s talking about making it go away. We’re talking about changing the structure. So, for instance, the kind of reform of Social Security that I’ve advocated, give younger workers the opportunity to accumulate savings.”
The “opportunity to accumulate savings” that Toomey refers to is a plan to privatize Social Security. The proposed privatization of Social Security would amount to a massive redistribution of wealth, from workers into the accounts of Wall Street investment firms.
Under the Republican scheme, American workers would pay taxes to go straight to Wall Street. The “savings” that workers would get wouldn’t really be savings. They’d be stock portfolios.
The Wall Street stock portfolios, unlike the current Social Security trust fund, couldn’t be guaranteed. Their value would suffer from dramatic decreases when, as frequently happens, the stock market experiences problems.
While the Social Security accounts of “younger workers” would be placed in peril under the plan Pat Toomey refers to, by being subjected to the gambling of Wall Street financial elites, the Social Security benefits of retired Americans would be endangered as well. The benefits paid to older Americans, after all, are enabled by the payments into the Social Security trust fund made by younger Americans. Toomey and his Republican colleagues would siphon off that money, enabling Wall Street insiders to profit from it, and leaving retirees in the lurch.
Gambling with young Americans’ future, taking Social Security benefits away from retirees, and creating a new tax with the money to go straight to Wall Street investment firms – as Pat Toomey says, this Republican plan will not directly make Social Security go away. It will merely create the circumstances that will make Social Security go away.
That’s a semantic difference that will make little difference to American workers who find themselves without any safety net when times get tough.
There is no 30 year period in US history – including through the great depression where the stock market has not had a positive return on investment. The average social security recipient gets back exactly what they put in – only many many years later. Even an Bank certificate of deposit does better. If all this is about is risk then let people buy gold. Further I do not think any effort to privatise social security has demanded that people MUST chose the private option. If you really beleive government is your best investment – put your money in social security. We have just had the largest stock market crash in 75 years – yet today My IRA is larger than it was in 2008, and very nearly as large as the total I am likely to ever collect from Social Security, yet it took only a miniscule part of what I have contributed to social security to build.
The problem is that Social Security is and always has been a ponzi scheme. Anyone but the government who paid current expenses with investment funds would be in jail. Of course Social Security is guaranteed – if congress does not change the rules – which it is already clear they must, and if the nation does not go bankrupt then social security is guaranteed. Ultimately the only guarantee to social security is our faith in our legislators. I have far more faith in a stock broker and that is not saying much.
Finally there is no fundamental difference between the stock market and the full faith and credit of the US government. If the future economy is sound the stock market will be able to pay and probably social security will too. If we have the kind of economic collapse necessary to produce the type of market disaster you are worried about, government may be able to pay its social security obligations but at best it will be with money that is worthless. Without a robust economy there is no wealth no money. Wealth is created by the markets not government, and without wealth money has no value.