Senator Reveals False Consciousness About Social Security

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while back I wrote my Senator, Carl Levin (D-MI) to let him know
I have a book out about Social Security, enclosing various flyers
including a page of advance praise from such prominent people as
Peter G. Peterson of the Concord Coalition, so he could order a
copy if he had a mind to. Figured that he might want to learn what
an economist among his constituents had to say about such an important
national issue.

On April 28 I got back what was obviously a canned form letter.
Two highly disturbing things about it leaped out immediately from
the page. First of all, it made no mention whatsoever of my book.
There was no sign that whoever wrote it had paid the slightest attention
to what I’d sent them. Not even the fact that the founder and president
of one of our most important deficit-fighting organizations, along
with historian Neil Howe and former Chief Actuary of Social Security
Haeworth Robertson, had warmly endorsed my book made the slightest
impression or got mentioned. Makes me wonder how attentive and competent
Senators’ staffs are in handling their constituents’ mail. Can they

The second troubling thing about this letter was that it is simply
a long harangue about Social Security, loaded with falsehoods, misleading
statements, half-truths, and flat nonsense – in short, revealing
that the good Senator (or whoever on his staff it was who ghosted
the letter) has what I call (snitching a piece of Marxist terminology)
a “false consciousness” about Social Security: a set of beliefs
which are false but which are taken as true and govern conduct.
It casts a grimly illuminating light on what the pashas in the Senate
think is true about Social Security. The text of the letter follows,
with comments by me inserted in square brackets.

Keep in mind that this fellow, along with 534 others, most of whom
probably know what he knows and believe what he believes, has the
power to decide how much Social Security tax you and I are going
to pay, and how much you and I are going to get in the way of benefits.
So it really matters for your future and mine whether or not the
good Senator has his facts straight. As will quickly become clear,
he doesn’t. Either that, or he’s telling a lot less than he knows.
Here goes:

10, 2003
[my street address deleted]

“Dear Mr.

“Thank you
for contacting me about the Social Security trust fund. [That’s
not what I wrote about, and it’s simply a Treasury account,
not a trust fund, as every honest student of Social Security knows.]
The trust fund is important to current retirees and younger workers
alike, and we must maintain not only the long-term stability of
the Social Security program, but also the public’s confidence
in it. [The so-called trust fund is of no importance whatsoever.
Its only assets are unmarketable IOUs issued by the government
to itself. The idea is that these IOUs will be liquidated to cover
future Social Security revenue shortfalls. To pay them off, the
Treasury will undoubtedly raise taxes and borrow from the public
– by the same amount as they would have had to raise the
Social Security payroll tax if the “trust fund” did not exist.
Since all tax revenues and borrowing from the public are extracted
from the same source – the private economy – the existence
or non-existence of this bogus “trust fund” makes no economic
difference whatsoever. The only people who believe this “trust
fund” makes any difference are economic illiterates. Looks like
my Senator, or whichever staffer did this letter over his auto-pen
signature, is an economic illiterate.]

its more than sixty years of existence, the Social Security system
has served its purpose well. [It sure did, Senator. It gave the
Democratic Party a lock on millions of votes and a sure-fire stick
to wallop conservative Republicans with, forced the GOP onto a
permanent defensive, calamitously increased the dependence of
the American people on the federal government and the government’s
power over the people, and created a mighty new engine for extracting
resources from the taxpayers.] Social Security is, first of all,
a retirement program. Its primary goal is to replace a portion
of each worker’s lifetime earnings through monthly payments. [Its
primary goals are surveyed within the previous set of brackets.
This publicly professed goal may be for real, but it’s also the
sucker bait which made attainment of the other goals possible.]
Millions of senior citizens have been kept out of poverty because
of the support Social Security offers. [Fact, but the support
comes from the hapless taxpayers.]

Security is also an insurance program. [Horse feathers. There
is no contract; no policy; no forward funding to meet obligations;
no true risk pooling because the taxes have no relationship whatsoever
to the taxpayer’s risk and the benefit levels are set politically;
and no true risk transfer to the insurer, because Social Security
assumes no speculative risk whatsoever, Congress can always simply
raise taxes to cover revenue shortfalls, and all the risk is therefore
assumed by the taxpayers, not the alleged “insurer.”] It offers
workers the guarantee that if they are disabled or die, their
families will receive compensation. [Nonsense. Congress has always
reserved the right to modify the program, and the Supreme Court
ruled in Flemming v. Nestor (1960) that there are no accrued
property rights to benefits. Congress removed Social Security’s
original money-back guarantee in 1939, and in 1983 raised the
retirement age, cut the early retirement benefit, and introduced
a stealth means test in the form of taxation of benefits. But
notice the slippery language he uses, leaving a wide-open loophole
for benefit cuts. He says Social Security offers a guarantee of
“compensation.” Now, that leaves things plenty vague, and the
Senator is undoubtedly a good enough lawyer to know it. He says
nothing about how much compensation it “guarantees.” A
certain specific level of “compensation” may be written into the
law when you pay your taxes, but Congress may have replaced it
with something entirely different by the time you start collecting
your “compensation.” They’ve done it before and they can do it
again. There is no guarantee.] This safety net aspect of
the Social Security system is important and must be considered
when one examines the effectiveness of the program as a whole.
[A long-winded bloviation that says next to nothing.]

“The Social
Security system has undergone many changes since its inception
in 1935. For example, benefits have been extended to the disabled
and the blind. [Benefits have been cut or even eliminated, too
– why don’t you mention that?] Additionally, changes
have been made over the years to increase the Cost of Living Adjustment
(COLA) and to raise revenues in order to keep the system solvent.
[The 1983 legislation also postponed the 1983 COLA to January
1984. And one of those changes to raise revenues was taxation
of benefits – proof, if anyone cares to grasp the clear implication,
that the “guarantee” is as malleable as mercury.]

demographic changes have affected the program, as well. Life expectancy
has risen from 61.7 years in 1935 to 76.7 in 1998. [Meaning that
when Social Security was set up, with the earliest age for collecting
retiring benefits fixed at 65, the politicians figured that most
people would probably kick the bucket before collecting the benefits
their taxes had “paid for.” Foxy fellow, that FDR. Social Security’s
“primary goal” is to replace worker earnings. Yeah, right.] Furthermore,
the ratio of working age persons to retired persons has decreased.
In 1950, there were 7.2 workers for every retired person. By the
year 2030, that ratio will be 2.8 workers for every retired person.
[And the liberals who worship at the altar of Social Security
also believe in libertine sex morals, sex education, condoms in
public schools, and abortion on demand, all of which drive down
the growth of the younger taxpaying population. Senator Levin
is on record as being pro-choice. Can’t those clowns connect the
dots? So much for their vaunted intellectual superiority over
benighted right-wingers like me.]

the system is run very efficiently. Only one percent of the contributions
are used for administrative purposes, meaning ninety-nine percent
of contributions are returned to the public in benefits. [Contributions,
my eye! They’re taxes! This Orwellian doublespeak about Social
Security has been standard since 1935, and got written into the
law in 1939, when the taxing provisions of the Social Security
Act were relabeled the Federal Insurance Contributions Act (FICA).
And “returned to the public” is a crass piece of misleading hooey.
Your – ahem! – “contributions, dear reader," will
never be returned to you. They went out as soon as Uncle
Sam got his hands on them, to pay the benefits of total strangers.
Your own benefits will be paid with “contributions” squeezed out
of somebody else, who will get benefits paid by still younger
strangers. Visualize an intergenerational sodomitical daisy chain,
the oldsters sticking it to the youngsters, and you will see how
“contributions” really get “returned.”] Despite excellent management,
the program will face some long-range problems as the ‘baby boom’
retires. [Ah, the power of the understatement!] The Social Security
Trustees estimate that unless changes are made, the Retirement
and Disability trust fund will be insolvent by the year 2032.
[The poor guy – or his staff ghost – can’t even get
the name straight. It’s Old-Age and Survivors Insurance and Disability
Insurance (OASDI) Trust Fund, Senator. Says something about how
well politicians do their homework.] At that point, the Social
Security Trust Fund’s resources [What resources? It’s nothing
but a pile of IOUs one organ of the federal government issued
to another. Its only “resource” is Uncle Sam’s ability to tax
and borrow – i.e., Joe Public’s willingness to be on the
receiving end of the aforesaid daisy chain!] will have been depleted
and revenues going into the fund at the current tax rate will
be insufficient to pay the expected benefits. [Expected? Thought
they were “guaranteed.” Hmmm . . . ] Thus, it is important that
we consider long-term solutions when working to ensure the solvency
of the Social Security Trust Fund. [How about converting Social
Security into a means-tested floor of protection for current and
imminent retirees, repealing the Social Security Act, abolishing
that godawful tax, and phasing the thing out? Now there’s
a long-term solution that will keep Social Security from breaking
us. Too bad it’s one “we” will not “consider.”]

“In recent
years, there has been considerable interest in privatizing the
Social Security system. [Maybe the youngsters want off the daisy
chain, their grasp of reality and ability to think being stronger
than a liberal’s.] Supporters of privatization have suggested
that this is the best solution for the program, allowing younger
workers to invest some of their Social Security payroll taxes
[Not “contributions”? Truth in labeling at last!] in the stock
market as a means of increasing national savings and promoting
economic growth. [No, the idea is to get a better return on the
“contributions” than offered by OASDI’s so-called “insurance.”]
However, I believe doing so would erode the social insurance element
of the system. [The socialistic redistribution element, you mean.
This is the one thing about “privatization” I actually like!]
The stock market is unpredictable, as evidenced by this past year
[so is Congress, as evidenced by the removal of the money-back
guarantee in 1939, and the benefit cuts and stealth means test
voted in 1983], and a prolonged downturn in the market could have
a disproportionate affect [sic] on some of the most financially
vulnerable beneficiaries [what does he think a payroll tax increase
does to financially vulnerable taxpayers?] if Social Security
funds were invested in the stock market. [why?] Also, allowing
individuals to invest in private market accounts diverts valuable
resources away from the Social Security Trust Fund [Translation:
stop those taxpayer dollars! They’re getting away!] and speeds
up the date at which the trust fund will be unable to meet the
needs of beneficiaries.

are needed, but in doing so we must consider the needs of both
current retirees and future workers. [Since Social Security is
a coerced intergenerational transfer, the old one’s gain is the
young one’s loss. It’s a zero-sum game. Reconcile the needs of
both. I dare you.] Our long-term fiscal situation, which just
a few months ago appeared so bright, has been harmed by a slowdown
in the economy and an expensive tax cut that largely benefits
the wealthiest among us. [Maybe so, but what of it? Whose money
was it to begin with?] The tragic events of September 11th have
negatively impacted our fiscal situation further, forcing us to
reevaluate our budget priorities. In light of these changes, it
is unclear how Congress will address the Social Security issue.
However, I want to assure you of my deep commitment to the strength
of the Social Security system. [Put another way, of his deep commitment
to continuing to tax young people like me black and blue, the
ability to tax and collect being the only strength Social Security
ever did have, has now or ever will!!] As I continue to examine
ways to strengthen Social Security to meet the challenges of the
21st century [the only way to do it besides tax increases is benefit
cuts, especially on current beneficiaries – or did I say
something I wasn’t supposed to??], I will keep your views in mind.
[Maybe you’ll get around to reading my book, too, and from the
sound of your letter you’ll get an education on Social Security
at long last, but I’m not holding my breath.] Best wishes. [Same
to you, Senator Levin. If I have to point out your wrong-headedness
about Social Security I might as well be polite about it.]


If this is typical of the mentality of Democrats in Congress on
Social Security, we’re in big trouble.

8, 2003

Attarian (send him mail)
is a writer in Ann Arbor, Michigan, with a Ph.D. in economics. His
book Social
Security: False Consciousness and Crisis
, which treats the
myths and realities of Social Security in detail, has just been
published by Transaction Publishers.


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