Category Archives: Social Security

Why Occupy?

The folks who are standing up to tear gas and rubber bullets have a reason. If we understand it, we can fix it, starting in November:

Open letter to Senator Mark Warner

Dear Senator Warner:

As the text of S. 1247, a bill to develop and recruit new, high-value jobs to the United States, to encourage the repatriation of jobs that have been off-shored to other countries, and for other purposes. comes available, I will follow it closely. This is an important issue, and attracting “new, high-value jobs to the United States” is a number one priority. I hope that your bill has considered the environment in which jobs grow, one in which:

  1. people have economic security — money — and can purchase goods and services,
  2. the infrastructure will bear the weight of the commerce, and
  3. there is a rich culture to enjoy and opportunity for children and families.

Recent downturns and responses to them based on cuts in spending have reduced all three of these aspects of our economic environment. Above all, it is the responsibility of government to maintain a culture in which people enjoy living and have opportunity. Our corporate welfare focus is foolish. We need to build infrastructure, take care of the health care mess once and for all by extending Medicare to everyone who wants to enroll and supporting Medicaid. We need to defend — and extend — Social Security and restore the retirement age to a reasonable 62, which would open up opportunity for young people. Older people who can scarcely keep up the pace are now locked into jobs they are no longer able to do by the necessity to keep employer medical insurance and the prospect of poverty with reduced Social Security. Let older Americans retire and spend their retirement accounts and Social Security on travel and support for their children and grandchildren — something other than medical care — and the economy will turn around.

I look forward to voting for you again and again as our Senator from Virginia, and I hope I will get to vote for you for President in the future. Please understand that I do not want to take away from business, but business does not thrive except in a dynamic culture that produces demand for goods and services. Money trickles up, not down, and we know this every time we pay our credit card payment. If we keep cutting off our most vulnerable and forcing our middle class into poverty by low wages, expensive education, rising food costs, rising energy costs, abusive credit practices, and tax incentives to wealthy private corporations we will not survive.

For an economy to thrive, some of the money that goes up needs to be forced back down to the bottom so that it can recirculate. The way to do this is to collect taxes from the people who use our labor force and our infrastructure and our consumer base to become wealthy. The wealthy are not the source of jobs, they are the result of many people working to get by and to have a few dollars extra to take the family to the beach once a year and to carry smart phones in their pockets. The working people are the source of jobs and the source of wealth because they both do the work and generate the demand for goods and services. Infusing money at the top and asking corporations for the favor of a few jobs is utterly ridiculous.

I hope that your new bill considers the workers in the United States when you are thinking about jobs, because if our workers are not healthy and hopeful and do not benefit from their work we will not have an economy no matter how much money we give to corporations.

I hope also that you will see this message. I know that you receive many letters, but this message is clear. In the United States today we are seriously talking about taking out the foundations of the economy and trying to sustain the wealth at the top by giving more money to wealthy people. This is a third world solution, and we can do better.

What to do about Social Security

On April 4th, the Bristol Herald Courier printed “Social Security: no easy answers” by Media General’s Washington bureau chief Marsha Mercer. In reality, there is an easy answer to the problem Social Security will face in 2037, and it has been around for many years. It has been formally before Congress as a recommendation since it was placed there in the 2005 report to Congress of the Social Security Actuary Department. The report recommended that we lift the cap on wages subject to Social Security contributions.

When Social Security began in 1940, the US average annual earnings for white males was $2,984.00. White women averaged $771.69, Black men averaged $537.45, and Black women $331.32. Currently the average for US workers is $36,000 to $42,000. The income limit subject to Social Security contributions in 1940 was $3,000.00, which certainly included all of the middle class, and this cap has been adjusted many times over the years so that it is now around $108,000. Increases have been based on the cost of living index. Currently with increasing concentration of earnings in the top 2% of earners, a larger concentration of wealth at the top actually demands a change in this formula. Until the most recent two decades, most of the money earned in the United States was subject to Social Security contribution because most of it was earned in the old fashioned way by regular people. Currently working people have a smaller share of earnings, so Social Security contributions, while they have kept pace with the cost of living to this point, will begin to fall short in 2037 if we keep the same formula.

As wages have increased and the disparity between rich and poor has widened, Social Security has never run a deficit. It has a surplus now and is not part of the deficit we hear so much about. Cutting it will not cut the deficit. Privatizing it will produce a windfall for financial institutions — again widening the gap between Main Street and Wall Street. If Wall Street were placed in charge of Social Security, private for-profit financial institutions would develop an array of retirement plans which they would spend money to market to consumers, deduct their money for marketing, take a healthy fee for managing our money, and invest our mandated retirement savings in the stock market. They would make money, and we would be at risk.

Social Security is insurance that protects all of us. We pay in as a federally-mandated contribution and are entitled to stated benefits owed to us in return. These benefits mean seniors can maintain their homes and purchase goods and services. Families do not have to support their elders while paying for school and college for their children. Businesses can sell goods and services to seniors, and young families can afford to purchase more goods and services since their seniors have their Social Security benefits. These benefits accrue not only to people who draw Social Security benefits but to their children and grandchildren, to people and businesses that sell them goods and services, and to the economy at large. Social Security is a continuing economic stimulus, a savings plan, and a foundational economic support that we cannot afford to discontinue or to weaken by privatization.

The simple solution for the continuance of Social Security was given to Congress in 2005 in a report by the Social Security Actuary Department. They recommended that the cap on earnings subject to Social Security contributions be lifted. Currently we pay Social Security tax on the first $108,000 ($106,000?) of annual earnings. The Actuary Department recommended including all earnings in the Social Security Tax and keeping benefits as they are. This small change would affect only the highest-paid 3% of us, since around 97% of wage earners make less than the current cap and already pay the Social Security contribution on all of their earnings. The change would, according to the calculation of the Actuary Department, make Social Security solvent for another 75 years.

See the version of this post edited to 300 word limit published in The Bristol Herald Courier

Governments of large nations are large governments

Many will be basing their choice tomorrow on whether or not they want “big government.” It turns out that when you stop to list the differences between Republicans and Democrats, both of them seem to want big government. Then you flip a coin, and both of them want small government.

The Republicans disparage big government more frequently, but over the past decade of their control they have made government much larger. They expanded government intrusion into people’s lives by the Patriot Act, stacked the Supreme Court with corporate servants, broke unions and pushed back civil rights, and raised the prison population. They have enlarged government debt by useless foreign wars and and impoverished it by tax cuts for people who don’t need them. While doing these expansions, they have continuously cried that they want government to be smaller, and because of the volume of the shouting, some people still believe this. So the tag of “big government” won’t adhere to them in the press. This is because the press is essentially recording the shouting and transmitting it to the public. Republican expansion of government and the willingness of GOP leaders and legislators, corporate lobbyists, cronies, and campaign sponsors to grow wealthy at the expense of small investors and working people brought us to an economic brink that we never should have faced. They literally expanded government and enriched themselves economically using the tax dollars, the home equities, and the livelihoods of citizens.

The candidates they have in the arena now want to continue this expansion by taking away the successful programs that serve citizens — minimum wage, student aid, Social Security, workers’ rights, civil rights, Medicare, Medicaid — and anything else that can be turned into money for corporations by bleeding services and opportunity from ordinary citizens. A prime example is the gun lobby. They shout “freedom” and make you believe freedom is served when you can carry a firearm, open or hidden, anywhere you want it. What they actually do is sell a boatload of guns to you to protect your own freedom, which they are supposed to be doing for you with your tax money. Then you have to live with the knowledge that when your child goes to the Mall, every second person there is carrying a gun. So you imprison your children, but that is okay because you buy them more video games and televisions. This is not freedom. A society that goes armed is free to bear arms, but every other freedom is curtailed by fear of everyone bearing arms.

Democrats here at the start of their decade have reduced the deficit and stopped the hemorrhaging of jobs, prevented a depression, passed health care reform that is budget neutral if implemented as written, and included young adults between 18 and 26 in provisions already in place. They have curtailed military activities in Iraq, and given us a more realistic set of possibilities and goals in Afghanistan. They have passed regulatory reform to stop abuses in student loans and make that area of the economy self-sustaining and economical. Wall Street reform is serious, and they have a good start there. They have passed a consumer protection law that regulates credit cards. They have distributed tax cuts and stimulus money where it does the most good, into the workforce for doing work that needs to be done and helping people recover from the recession. None of these things are bad. But admittedly, they are big. So the accusation that they are “big government” sticks. They have done big things.

The candidates that they have in the field now are by and large supportive of continuing the recovery. Even Virginia’s Rick Boucher, who famously voted against his own party on HCR, but is now being attacked for working on and supporting the Cap and Trade bill, is supportive of moving forward instead of backward. He still doesn’t like HCR because it will probably raise rates on Medicare Advantage plans, which are held by most of the folks in his district. He still doesn’t like Cap and Trade, because it gives the EPA control of carbon emissions. However, on both issues, he sees ways of improving the current position and moving forward. He vows to support Social Security and Medicaid, student aid, and the minimum wage. He is able to support the coal industry and still work for clean energy, so neither of these camps is completely happy with him. They want him to choose up a side and start yelling. I want him to keep working, because he is doing a good job for his district. In another district, Tom Perriello is fighting for his political life because he voted with his party for HCR.

In Virginia, where I live, the state government has no problem with appearing regressive or oppressive, which they interpret as “being for small government.” They want to become smaller by privatizing roads — creating toll roads– and selling off state resources that bring in tax money to the highest private bidder, presumably the largest of which would be Walmart. They have been actively opposing anyone who supported any initiative of the Obama administration or the current Democratic legislature, and are in fact using our tax money to sue the federal government to prevent implementation of HCR. They are attacking Democratic candidates by pursuing state university professors whose research supports global warming, shouting about Cap and Trade, shouting about HCR, and pointing out that they are the same party as President Obama and Nancy Pelosi. No Republican candidate in Virginia has produced any alternative plan for doing the work of the government in serving and protecting citizens.

So it is a matter of where government should be big and where it should be small. Democrats have a history of making government large where it takes care of citizens and small where it infringes on individual choice and freedoms. Republicans have a history of making government small where it wrings out citizen support, protections, and resources and large where it enriches corporate interests.

All governments are “tax and spend,” and governments of large nations are large. The distinction between the political parties is to be found in what they do with the taxes and how they express their largeness. I am voting for Democrats because I believe a government should be large enough to bring home the bacon for the ordinary citizen in infrastructure, services, and opportunity. I know my government is large enough to insure either 1) that every one of my neighbors is fed and educated and has health care or 2) that a few people get extremely wealthy and the rest of us have plenty of prisons.

I stand with Democrats for Option One.