About The People’s Pension

What is Social Security?Americans have been watching for three decades now as members of their political and financial elites attempt to redefine the most successful social program in U.S. history by downgrading and ultimately privatizing benefits, all in the name of fiscal responsibility. (But what about the people who depend upon it?)

What is Social Security? It’s an old-age income program for American workers. It’s disability insurance for injured workers. It’s survivors’ benefits for the families of deceased workers. It’s a social insurance system that belongs to every American working person who pays payroll taxes. That means it’s also a form of mutual aid: the way human beings cooperate to fulfill each other’s needs and desires.

It’s not just a program,” presidential candidate George W. Bush said in 2000. “It’s your property.” He was right. But it’s a collective possession, not a wad of money stuffed into an investment account. I started this blog to help people following the Social Security debate keep it all in perspective: What Social Security is. What it does. And who it’s supposed to benefit.

Who am I? I’m an independent journalist who’s been covering political and financial news for more than a quarter-century. I’ve been studying and writing about Social Security for more than 15 years. I’m the co-author, with Seth Tobocman and Jessica Wehrle, of Understanding the Crash (Soft Skull Press/Counterpoint, Spring 2010). I recently completed a history of the Social Security debate, The People’s Pension: The War Against Social Security from Reagan to Obama (AK Press, Spring 2012).

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15 thoughts on “About The People’s Pension”

  1. Re: The People`s Ponzi Scheme

    Eric,

    I hope you`ll follow-up & remind working Americans to the potetial fraud in their future, as they`ll be bilked out of their hard-earned money, if they don`t live to collect any Socialist Insecurity benefits, or have no eligible survivors.
    Sadly, employees/employers have been sold a bill of goods, & forced to fund the government`s official Ponzi scheme, that was designed to keep the corrupt politicians in office.
    In the real world, operators of voluntary Ponzi schemes are subject to long-term incarceration, ala, Bernie Madoff, unlike corrupt politicians, who`re rewarded with long-term incumbency, for perpetuating the biggest Ponzi scheme in history…sorry, Bernie.
    So, let the `revolution` begin, again…no more FICA taxation, without representation. As you enjoy protected 1st Amendment rights, I hope you`ll promote the need to restore 10th Amendment rights to working Americans.

    Very sincerely,

    Harry Thompson

  2. Eric, I work with http://www.FixSSNow.Org. We provide 1-stop shopping for people interested in Social Security reform. We attempt to provide information on all plans in terms that average people understand.

    Our view is that the crisis is coming much sooner, and will be larger than most people do. We see the assumptions baked into the Trustees report as beyond optimistic.

    We always welcome third party commentary provided that it is factual. The point isn’t to push an agenda but to put honesty into the debate. We like to provide a well-rounded view to our user community.

    If you have commentary please let us know.

  3. I haven’t had time for more than a relatively brief look at your proposal. But my initial reaction is that you’re essentially arguing for turning Social Security into something more closely resembling a private-sector, commercial insurance program, in which different groups of people pay more or less based on how they are rated and what level of coverage they want. I wouldn’t support this, because under such a scheme, Social Security would no longer be SOCIAL insurance. The social solidarity element would be lost. Arguably, it would be cheaper, but almost certainly there would be winners and losers. There would be no – or very little – redistribution of benefits from the more affluent to the less. Social Security is set up the way it is because there is a benefit to everyone not only from the old-age income safety net it provides, but because it creates social solidarity. As for the cost, the CBO tells us that the cost of Social Security will rise to 6.2% of GDP by the 2030s, then decline to 6% and stay there for as far as they can project. That’s a small price to pay given the aging of the US population. If we want to reduce it, the US can start spending money again on education, infrastructure, housing, and other things that will help the economy to grow in the long run. If some of this can be aimed specifically at the elderly, all the better. But I don’t think the cost of Social Security is so ruinous that we need to drastically restructure it along commercial insurance lines.

  4. dear eric,

    you were great today at http://www.democracynow.org when you proactively countered several of the rightwing disinformation strategies and of the media’s mendacious phrases about SS.

    however, everytime you get a chance you should also consider stressing that

    a) SS is not an “entitlement” and that misnaming it as such is part of a disinformation campaign aimed at treating SS like a disposable welfare program with 3 trillion in “revenue” to raid (and so avoid taxing the rich).

    b) those 5% of GPD that SS costs per year should be compared to the

    i) extra 10% of GPD that wall-street leeches have managed to get in the last decades (~15% total, up from ~5% in the 1970s) and…
    ii) the extra 10% of the GPD that the clepto-medical complex pockets in the USA compared to canada and EU contries (18% vs 9%).

    together that’s 20% of GPD wasted w/o any credible benefit for the country, compared to 5% given back mainly to retired people who worked a lifetime at decreasing wages and more than deserve a dignified retirement.

    keep the great work!

    m.

  5. Great figures, thanks! These days I find myself coming to like the term “entitlement.” We paid for Social Security and Medicare through our payroll taxes, dammit, we ARE entitled to them! What’s shameful about that? The word’s been twisted into a wholly negative usage, but why do we have to go along with that? Let’s steal it back!

  6. I’m a little concerned by the “Ponzi” scheme comment by “Harry Thompson.” I realize the comment was made last year.

    In soc.retirement, a Usenet group, I used “Harry Thompson” as my netnym for a couple of years. In that newsgroup I protested as strongly as I could against the mischaracterization of Social Security as a Ponzi scheme.

    Hopefully this name’s occurence in your blog is just coincidence, but if it is not, I’d sure like to know.

  7. Eric,

    I just read the People’s Pension. I disagree with some of what you’ve written, but I really respect the amount of time and effort you put into the book. I think it’s a good history and I feel like I learned a lot by reading it.

    Maybe I am missing something but it seems to me that Social Security would not be an issue if the Government hadn’t spent the excess it was collecting when the ratio of workers to retirees was 18-to-1 in 1950 to 4-to-1 in 1965 to 2-to-1 by 1990. Would it? Why did they do that? Was that really necessary? Putting the excess in US Treasuries and then spending the cash? That appears to have been a huge mistake, and quite frankly a scam of sorts.

    How will they cover those Treasuries? Print money? Or even worse raise taxes? We the people have already been taxed to provide the money. They’ll tax us again to fix a problem that they caused? I want to live in a country that helps people that are less fortunate and provides a leg up. But it’s outrageous that the retirement age has to be raised and benefits cut due to the Government’s unethical, incompetent behavior. And if they raise taxes to cover their blunder it’s even more of a scam than I thought. What a mess. Shame on them.

    Jim

  8. The question of why the money was invested in Treasuries rather than some other way isn’t easy to answer, because it goes back to Dem/GOP politics in the 30s and 40s. Some New Dealers talked about investing the excess in stocks and bonds or even in economic development projects that would directly help a growing elderly population (because even then, large increases in life expectancy were anticipated). Republican leaders, notably Sen. Arthur Vandenburg, were upset by this. They felt if Social Security’s surplus was invested in anything except Treasuries, it would amount to “pension fund socialism” and the government would quickly own a huge chunk of the economy. So it was the GOP that insisted on this system, which was thought to be politically neutral.

    Having said that, I disagree that the system of investing in Treasuries is any kind of scam. How will they cover those Treasuries? The same way they pay interest and principal on any other Treasuries they issue. Treasuries are still considered the safest investment in the world (unless you want Swiss bonds, and there aren’t enough of them to make a difference). In fact, Treasuries are considered safer than ever these days. Is there an alternative? I don’t see one that’s politically doable. What else would the surplus be invested in? The GOP think they have an answer: private accounts, which I would characterize as welfare for Wall Street and inappropriate for people of low or moderate income.

    I personally think we should revisit those New Deal ideas about investing the surplus in the real economy. But that’s not likely to happen soon. In the meantime, Treasuries are OK with me. Treasuries are basically an investment in the government’s stewardship of the economy, which means its ability to keep the economy growing, thus increasing tax revenues and maintaining its ability to service the debt (not to mention supply services and benefits the public needs). The best way to address concerns about the government’s ability to service those Treasuries, then, would be to agitate for economic policies that create good jobs in this country, instead of policies that encourage companies to outsource them.

    As to the retirement age being raised and benefits cut, I disagree that either of these things has to happen. The solution here, too, is to adopt economic policies that grow the economy. That means more payroll tax revenue, which means less pressure on Social Security. The 1983 Amendments to the Social Security Act were supposed to solve Social Security’s long-term funding problem. The reason they didn’t was not because of the baby boomers’ retirement – that was already predicted – but because wages have stagnated in this country for most of the last 40 years. That was not anticipated. If Congress wants to “save” Social Security, the best way is to give American workers a raise.

  9. Re: Should politicians control Socialist Insecurity?

    Eric, continue the discussion & remind FICA payers they have no control over the `peoples pension.`
    It`s the Constitution that should be defended, since it doesn`t authorize Socialist Insecurity as a function of the central government.
    It`s FICA payers who should be defended, since they`re forced to put their own money at risk of being forfeited to the government, it they don`t live to collect any benefits, or have no eligible survivors.
    President Reagan`s budget director, David Stockman, offered a great solution to address this corrupt policy…`if the Securities & Exchange Commission had jurisdiction over the Executive & Legislative branches, many of us would be in jail.` Amen.
    Wasn`t Mr. Madoff charged by the SEC?
    Please send an email address for Bill Cohan.

  10. Hi Eric Laursen,

    Thanks for the interview with Anne Kornhauser. I do radio interviews (20 minutes) on KBOO, 90.7fm Portland, and would like to talk to you about SS, a safety net, and democracy, including the current predatory attempt to privatize as well as ways to build support by building a more alert activist people. Must prerecord the interview soon so please reply at your earliest.

    bill resnick 503-803-9373

  11. When I heard that people were relying on social security, I knew one thing for sure. It is not going to last, and it is essentially one of the largest things to not rely on ever in human history.

  12. The only real threats to Social Security are political — specifically, the Democratic center-right who want to dismantle it and the Republican right who want to dismantle and privatize it. Social Security has lasted 80 years, through more severe demographic than it’s experiencing now, and it’s survived and even been expanded because of the popular support it enjoys. The fact is that any marginally moral society will take care of its elderly. Social Security enables the US to do that (although the program could be further improved). Whittling it back would amount to a betrayal of the generations that have paid into it while condemning current and future working people to poverty in old age. It’s that simple.

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Separating fact from superstition about Social Security, social insurance, and mutual aid.