So the President's National Commission on Fiscal Responsibility and Reform has released its proposal. Tasked with the job of looking at ways to reduce the nation's growing debt and deficit, the Commission's proposals have been widely anticipated. And, as to be expected, it is full of lots of really bad ideas and very few good ones.
At least if you define "good" as "doing the most good for the most people"; and "bad" as "doing the most harm to the most people." I don't know, maybe it's just me, but those seem like really reasonable definitions.
One of the biggest targets in the crosshairs of the Commission is Social Security. And the Commission's big brains have clearly thought long and hard on what to do about the future of Social Security (insert sarcasm into this sentence please).
For one thing, the entire enterprise is highly suspect. The best way to reduce the debt and the deficit is to grow out of it. As this graph shows, even the record high deficits of World War II were turned into surpluses by the high rates of economic growth that created the great American middle class, spurred in large part by those very deficits.
(The above source is from a right-wing website, by the way, however the site owner is commendably using the real numbers and the site is very user friendly if you want to play around with the stats).
The other thing that the Commission "achieved" was to propose a whole lot of ideas that have been on the books for years. Literally. For instance, let me point you to a site:
This is the website for the American Academy of Actuaries (the main professional--and non-partisan--organization for the nation's actuaries) as well as a little online game/simulation where you can try your hand at solving the nation's "terribly difficult" Social Security "crisis." Here's what I want you to do. Follow the above link to the site and follow these instructions:
1) Click "Continue" to get to the game.
2) Click "Start Game" (don't worry about reading the instructions for now, you can always go back and do that later). C'mon trust me!
3) On the left hit the button marked "Revenue Increases"
4) You should now be on Question 6 (make sure you are).
5) select 'b" --"Eliminate cap and pay Social Security tax on all taxed earnings. But calculate earnings only on the current law-cap."
6) BOOM! You're done. Congratulate yourself. You just fixed Social Security.
You also fixed one of the worst taxes in American history. You see Social Security is today taxed at 6.2% of all income up to $106,800. After that, nobody pays one red cent! What that means is that for the overwhelming number of Americans who make less than $106,800 per year, they pay a 6.2% flat tax for their part of the Social Security Trust Fund. But for the very few wealthy Americans who make more than $106,800, they pay an increasingly smaller amount of tax the wealthier they are. If you make $300,000, for instance then you only pay that 6.2% tax on a third of your income.
What you did in the game is to pass a law that says all income will be subject to the 6.2% flat tax but the benefits will continue to be paid out as they are now. In other words, the only folks who will be less well off after this change will be the very wealthy, while the bottom 80% of Americans will not have to see their benefits reduced or the retirement age increased or any of that.
But that is not likely to be any of the final proposals that come out of the President's commission. Instead, like the Plutocratic Working Group that they really are, they will propose both a reduction in benefits and an increase in the retirement age. Something that hurts 100% of the population.
Instead, we could make all income taxable and raise the Social Security tax to 6.7% and fund a big benefit increase to every senior in America as well as create robust solvency for the Trust Fund for the foreseeable future.
The answer is quite easy unless your goal is to protect the wealthy at any cost--then the choices you have to make are indeed "painful." Painful because politically they are risky. Voters just hate it when you put them at risk of poverty and destitution. And painful for the vast majority when you cut back life-saving economic security.
But let's not forget what is really behind all of this: the attempt to privatize, either partially or in whole, Social Security itself. There are billions in profits to be made in the private provision of social security.
Gee, I'm feeling quite insecure at the moment...
