Social Security Threatened

Wall Street Looks to Make Quick Buck

Wealthy interests in the Republican party have lately been making another attempt to do away with one of the most successful programs of the American government. Using crude scare tactics, they have tried to create a panic, suggesting that Social Security money will run out, and the only way to continue to provide benefits to Social Secuirty recipients is to privatize the system (thus creating a huge windfall for Wall Street stock brokers).

 

The theory is based on some extremely spurious numbers. Privatization advocates suggest in their projections an average stock market return of 7% for the next 75 years, the same as the stock market return for the last 75 years. However, they suggest that at the same time, average U.S. economic growth (which averaged 3.5% over the same period) will suddenly fall to 1.5% (a rate of increase so low it has never happened over a sustained period of U.S. history). These figures are far past any reasonable conservative estimate, and suggest deliberate misinformation, rather than careful planning.

 

Social Security benefits retired workers, the disabled, and their dependents: out of 43 million recipients, 26 million are retired, 4 million disabled, 7 million are survivors of deceased workers, and 6 million are spouses and children. 63% of Social Security recipients rely on it for half or more of their income, and 14% rely on it for 100% of their income.

 

Social Security stands as one of the great testaments to the ability of government to get things done. It is uncomplicated by loopholes or confusing requirements. Through wars, recessions, and all kinds of emergencies, benefit checks have always reached recipients on time. It is partially this efficiency which angers libertarians and opponents of government programs: the idea that government can be efficient and helpful opposes everything they stand for. Without Social Security, half of the elderly would live below the poverty line.

 

Wealthy business interests would prefer to replace it with a system where you gamble for your benefits by investing in Wall Street. This system would make Wall Street wealthier, but it is a risky scheme, at best, for our futures. To get a glimpse of what privatization might do to Social Security, take a look at private health care, and see how efficiently that runs. Administrative costs in Social Security are less than 1%; in private insurance administrative costs run from 12-14%. Private annuity costs (similar to Social Security in that they pay monthly benefits) go as high as 20%. We at ADA find the misinformation campaigns against Social Security deplorable, and continue to support one of the most successful programs in American government.

 

Please, write your Senators and ask them to vote against the privatization of Social Security. You can address letters to Senator Alfonse D'Amato and Senator Daniel Patrick Moynihan, Senate Office Building, Washington, D.C., 20510.