Both terms are warning signals of this administration’s new push to sell the privatization of health care and social security.
Before you buy into it, ask yourself: "Who benefits?"
The answer is: "Those who have more money than they need already."
Privatization of health care and social security gives them more places to stash the cash without paying any taxes. This plan also gets more money out of the U.S. Treasury and into the coffers of private financial institutions. And will require a tax increase or cuts in benefits.
Who will not benefit is the 45 million without health care because they can’t afford it already. No "savings plan" or "tax break" is going to help when they don’t have the cash in the first place.
Social security is a double scam, because not only does it work for the rich, it will cost another $2 to $4 trillion from tax-payers:
‘Partial privatization is the most costly and intellectually dishonest fix of all. Not only would it reduce the guaranteed part of the retirement package, but it would require the government to borrow $2 trillion to $4 trillion to keep paying benefits to current retirees while payroll taxes of younger Americans were diverted to new personal accounts.’ [Social Security: Finally, An Honest Debate Business Week 03/15/2004 subscription]
The Wall Street Journal agrees:
‘The problem with that idea is finding the money to pay the current generation of retirees, if revenue from current workers is diverted into the workers’ own accounts. [South Carolina’s Sen. Graham] would raise the amount of wages subject to payroll taxes to cover costs. But Mr. Bush has said he won’t raise taxes or reduce benefits.’ [Wall Street Journal 8/10/04 subscription]
As part of the pitch, they’ll probably tell you it’s good for "the investor class."
But the "investor class" is a neoconservative concoction, code for making the rich richer and getting more Republicans elected.
Yes, it is. And they’re proud of it:
In recent years National Review has pioneered two of the most fruitful theories of electoral behavior: namely, those based upon the "investor class" and the "impact of immigration." The investor-class theory holds that since most Americans now own shares in American industry, they are less amenable to anticorporate rhetoric and more favorable to such policies as the reform of Social Security. [John O’Sullivan, National Review 12/18/2000]
They say that stock ownership has grown from less than 20% of households in 1983 to more than 50% in 2001.
But there are a couple of things wrong with that.
One is that they picked a time span that coincides with the Internet bubble. Another is that they include your 401K plans, mutual funds, company pension plans and other indirect ownership, none of which benefit a great deal from the stock market (not nearly as much as the financial institutions holding your funds do). And some of which, like Enron and other pension plans, are huge losers.
The real investor class is investors with direct control of their stock market shares and that is still at 20%, not much higher than it was in the 1950’s.
And to put the frosting on the cake, the top 20% of households in income own 76% of the all the stocks, so the households that need it least will benefit the most, and those who need it most will get no benefits. (Ask yourself how many minimum wage earners play the market.)
It’s a scam.
I’m getting ready to leave the country for a week or so and don’t have time to fully develop this, but here are a few links to hold you until I get back (links open in new windows):
I won’t be around after today, but would appreciate any rational debate and will get back to it in a week.
[Printable version, new window]Powered by Sidelines