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Friday, October 21, 2016

Why Republicans Can’t Stop Trash Talking Social Security

Truly bad ideas never die; they are recycled in Republican presidential primary campaigns.

The example at hand is privatizing Social Security, a long-time obsession of the American right that briefly resurfaced at the beginning of George W. Bush’s second term, and then disappeared just as quickly after a brisk rejection by the public. Now that notion is suddenly heard again from the mouths of Republican presidential hopefuls who – while wisely avoiding any mention of Bush, ever — regurgitate the former president’s claim that Social Security is nothing more than a cruel fraud, with no financial foundation.

Texas Governor Rick Perry has repeatedly called the retirement system a “Ponzi scheme,” House Majority Whip Eric Cantor says that most Americans will never receive the benefits they have earned, and would-be nominee Herman Cain suggests that the United States should emulate the privatization policies of Augusto Pinochet, the late Chilean dictator.

Perhaps this is all just ideological bluster, reasserted in a situation where kookiness is no vice and sanity is no virtue. It is hard to take such rhetoric seriously when the stock market seems to be in deeper trouble daily. Even Karl Rove thinks that trash talk about Social Security is toxic. But there was a time not so long ago when certain figures on Wall Street and in the Republican Party believed that privatization would become the greatest financial bonanza in the nation’s history.

Such fantasies of untold wealth were not wholly unfounded. According to University of Chicago economist Austan Goolsbee (who later became an adviser to Barack Obama), Wall Street investment banks could anticipate as much as a trillion dollars in management fees over the coming decades if privatization were enacted. In short, the financial malefactors responsible for the Great Recession would reap still more gigantic profits.

Nothing much has changed in the Republican approach since the failure of the Bush plan, except that the language of Perry and his fellow presidential aspirants is considerably cruder in tone than last time. When Perry denounces the “Ponzi scheme,” for instance, he is simply lifting the phrase from old pamphlets published by right-wing think tanks. He doesn’t seem to recall how the Rove gang, advised by GOP strategist Frank Luntz, abandoned all forms of the word “privatize,” which polled very poorly. They found out that even when they used Luntz’s deceptive vocabulary of “choice” and “saving Social Security,” most voters saw through the shell game. Those voters understand that Social Security has protected their parents and families from poverty – and will refuse to forfeit that protection, whether they call themselves conservative, liberal or independent.

Ever the opportunist, Perry may moderate his rhetoric to reflect the insights of Luntz, insisting that he only wants to “fix” what isn’t broken. Meanwhile, neither he nor any of the other Republicans running for president seems capable of addressing, let alone solving, the fundamental intellectual flaws in the conservative argument.

When any of them refers to a “Ponzi scheme,” they are suggesting that U.S. Treasury bonds – the respository of value for taxes invested in the Social Security Trust Fund – are worthless. Yet those bonds, despite the destructive Republican tactics in this summer’s debt ceiling showdown, continue to retain the confidence of world investors (with far greater stability than the stock market). But the problems go still deeper.

Proponents of privatization have persistently offered two conflicting visions of America’s economic future. When they say that Social Security revenues will not grow fast enough to support the program’s beneficiaries, they are predicting a diminished rate of growth. But when they say that privatized accounts will consistently provide retirement security for everyone, they are predicting an unprecedented rise in stock prices. Even a Texas governor should be able to understand that both of those claims can’t be accurate.

But then a Texas governor might well have other things on his mind, as political analyst Craig Crawford suggested after the debate. He might be thinking about all the campaign money that could flow from bankers and traders who still lust after that trillion-dollar privatization windfall.

If that is what was on Perry’s mind, he should have glanced over at a sad and hopeless candidate who may not make it to the next Republican debate. Once a rising Senator from Pennsylvania, Rick Santorum endorsed Bush’s privatization plan in 2005, during a series of town hall meetings with angry constituents. The following year they made sure that he became “former Senator Santorum.”

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Copyright 2011 The National Memo
  • rumpunch

    Anyone of middle or lower income who supports the view of people who want to do away with SS,either in it’s entirity or “as we know it” (nice tricky little phrase), might as well just get a stick and poke it in their foot. Are we going to say it’s a Ponzi scheme when our tax money is converted into the labor of police officers who in turn protect our community? Bernie Madoff, the pal of many of the folks who want our SS dollars, ran a Ponzi scheme. US Treasury Bonds aren’t a Ponzi scheme or the moneyed folks in our society wouldn’t be investing in them rather than putting their dollars back in to the economy.

  • FranklinWheeler

    Would you prefer to have a candidate that ignores that by mere mathmatics that the Social Security program will eventually implode based on its “Ponzi Scheme”-like structure? Isn’t the fact that Perry has labeled the program as a ponzi scheme more apt to generate conversation and eventually a political discussion on how to save the program versus the head in the sand approach the Democrats seem to have adopted? You don’t refute the fact that the retirment sector of our economy is outpacing the younger generation of workers do you? Do the math Joe. We are not employing our younger workers at an even pace with our retiring community. Eventually the younger generations are going to decide they don’t want to live in one room apartments working minimum wage jobs as their grandparents trade in their RVs for a bigger and better vacation vehicle.

  • Macrobank

    …just lift the cap on contribution limits. Let EVERYONE pay one 100% of payroll and the pretend problem just disappears.

    True, hedge fund managers have to live without all those beautiful “management fees” but I think they’re going to find a way to squeak by anyway…

  • rustacus21

    It can’t be me, b/c ea time Conservatives “occupy” the executive, things get fouled up. Take Frank W.’s comments above: he repeats an evolving bullet points from Conservatives, that miss the fact that under Nixon, a economic mess was left for President Carter. In 1 term & unable to resolve the post-war debt, Reagan follows & inflates the deficit, creating a precarious economic environment for the Middle Class, business & government. Unable to grasp the realities of an economic catastrophe, Bush was befuddled & frittered away 4 years, while Social Security was placed in even greater jeopardy, compliments of expanding joblessness & losses of tax revenue. Enter President Clinton to the rescue! By adding 22 million new jobs worth of revenue, Social Security was able to build up additional surplus dollars & extend it’s solvency date. But that wasn’t good enuff. In true Conservative tradition, Clinton’s predecessor surgically undid every positive fiscal, economic and budgetary gain realized during President Clinton’s administration. Please understand, this isn’t ideological finger-pointing, except to the facts, that unless you’re worth in excess of 5 million/year, Conservative administrations spell doom for the aspirations of the Middle Class, as well as the viability of competent, productive government. The Constitution is the blueprint for our government, yet only Conservatives are unable – OR unwilling to follow its pathways. The proof is all numerical, while we’re on the subject of math… which Conservatives are HORRIBLE at, b/c they again, have left unmanageable debt for their predecessor – AGAIN!!!

  • mbtech

    The article was great except the usage of the word predecessor as opposed to successor at the end. Please check them. Thanks.