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IF REPUBLICANS RULED

April 28, 2009 - Ray Hall (Archive)
Today the loudest voices presiding over the remains of the Republican party are relegated to claiming that economic programs advanced by FDR had nothing to do with curing the economic ills of the Great Depression. One is struck by the similarity of language and the lingering hostility toward New Deal Programs that have survived, especially Social Security.

Then as now, Republican and Conservatives attached the stigma of welfare—gifting of money for nothing, money unearned by undeserving recipients who had failed to adequately provide for retirement. Then, as now, Republican and Conservative opponents attempted to embarrass or humiliate recipients for being on the public dole and immediately declared the United States hell bound for Socialism.

The Old Age, Survivors, and Disability Insurance Program—Social Security—social insurance is not and was never intended to be welfare. Then, as now, it remains an insurance policy purchased and paid for by all Americans and provides a minimum standard—an economic floor to soften economic hardships associated with old age and disability. By design benefits were paid out immediately and without waiting years to accumulate which means insurance premiums were intended to be paid from subsequent years premiums; payroll deductions.

Few programs, excepting public education, have done so much to lift people from poverty, improve health and welfare and increase longevity than Social Security. Yet, since inception, there has been an incessant drumbeat from Republican and Conservative opponents to abolish Social Security. Today, Republican and Conservative opponents of the system have pejoratively dubbed the program an “entitlement” that is breaking the US treasury and call for “means testing” recipients. Opponents recognize that means testing would destroy the universal nature of the program and deliberately attach the welfare stigma.

Opponents of Social Security have for years tried to garner support to “privatize” the program—to take our insurance premium payments we make through payroll deduction and direct payments and put it in the hands of the wizards of Wall Street. Exaggerated returns from private investments are projected against the average of $1025 monthly return for a retired worker as evidence that privatization is superior despite economic uncertainties of the market.

However, that argument has been shattered by our current economic experience triggered by the greed and avarice of Wall Street elite. Opponents conveniently omit that Social Security payments are guaranteed and provide comparable returns to similar guaranteed private sector accounts. The success of Social Security also belies the oft repeated charge that government is incapable of delivering efficiency and cost effectiveness. Costs associated with running the massive program is less than 1% of its contributions and that is a record unmatched by any private sector insurer on the planet.

The dramatic and urgent charge that the Social Security Program is facing an immediate financial crisis is at once synthetic and false. Using immediate assumptions financial projections show that Social Security will have a surplus through 2016 and beginning in 2017 interest and reserves are sufficient to fully fund the program through 2041 when the reserves are depleted. Even after that and using only current contributions the fund will pay 75% of its obligations. Analysts almost all agree that Social Security is sufficiently funded and financially sound for the next 75 years.

Opponents use the financial crisis as a subterfuge to extend the retirement age to 70 and to reduce monthly benefits. Let us not be deceived, from the time of Franklin Roosevelt, if the Republican-Conservative collation had been in complete control of the legislative process one of the most successful programs in our history would not have happened. With neither clarification nor adornment had the Republicans and Conservative opponents of Roosevelt prevailed retired and disabled in United States would be among the poorest among nations today.

 
 

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