For more than three years I have written about the dangers of privatizing Social Security.  As I said before, all you would own is the money you invested and only so long as the selected stock or fund was solvent.  So many people had come to believe that they would own something; they didn’t know what…but something and many thought they could become rich.   

 

Those funds would be subject to rolling management fees, service fees, brokers’ fees and taxes.  The taxes were the big winner here, amounting to nearly 50% once you needed to tap into those retirement funds.

 

When you did need to tap into them, a formula would be used to determine if and how much you could draw out and at what price to the account.  The truth of the matter was and is, by the time all the fees were assessed and all the taxes were applied, and the formula was calculated you would receive little if anything from these privatized accounts.  And why? You ask.  Because there was never any intention for anyone to reap any profit, much less any of the principle invested from these accounts except for those who owned the stock or fund…..which wouldn’t be you.  Gone would be the days when certain indexed stocks and funds had to vie for investors.  Under the privatization plans, money would flow in on a consistent basis.  As anyone knows who has invested in the markets, one day you are up and the next day you aren’t.  If you have money to risk without endangering your own financial stability this might not concern you.

 

Privatization was seen simply as a cash infusion into a risky and unstable market.  It was a cash flow that has long been coveted by Wall Street if for no other reason than it is a constant and massive amount that rolls in day after day, week after week.  

 

While we are assailed with the horror stories of “unfunded liabilities” concerning Social Security, those telling these tales very carefully never mention that the SS fund has consistently produced a massive surplus since its inception.  No fund that produces a consistent annual surplus can possibly be going broke; unless, of course, some outside force is tampering with it. 

 

One argument used to convince workers that privatization was necessary was, “In 1960 there were sixteen workers for every one person collecting benefits, and now there are only three for every claimant”.  What they didn’t tell you was that those three today are making more than the sixteen altogether.  Not only are they making more, they are paying in at a higher rate. 

 

Not one of these promoters of privatization mentioned that every president since Johnson, who made the SS fund available to the general fund to finance the Viet Nam war, have spent every last dime of each and every surplus each and every year since then.  Bush has used this surplus to cover the loss of revenue to give all his elite buddies and friends those massive tax breaks.  SS has been funding the day to day operations of the federal government since then. 

 

In what has to be a joke, the Electronic Social Security E-booklet, says, “

 

“SSI is paid for by U.S. Treasury general funds, not the Social Security trust funds”.

http://www.ssa.gov/pubs/11000.html

 

Since the Social Security funds are added to the general treasury slush fund, I really don’t know how they can make this statement.  There is no trust fund….just ask any politician.  Every surplus from every or any program out there is immediately consumed and spent by the federal government. 

 

As major banks crumble and fall as a result of unregulated trade, unscrupulous CEO’s, and free trade capitalism without regulation, we can clearly see why Bush & Co. wanted to co-opt Social Security.  These people knew first hand what they were doing and knew without the needed influx of forced market investments what the result would be.

 

None of this was supposed to happen the way it did.  Those of us out here were to take the loss, but that would come many years from now when it was far too late to hold those responsible, accountable. As it is, taxpayers are going to bail out these financial giants one way or the other.  Our investments in SS will continue to finance everything but our retirements, and now we will be taxed into extinction so one more corrupt institution can remain afloat.  Regardless of who wins this next election, taxes on the middle class are going to have to rise to cover the bailout of AIG and others.  The super wealthy will not see any rise in their taxes because as we all know its unfair for them to have to contribute.   

 

Try asking your senator or representative what the shortage would be in federal funds if the SS investments were secured against theft, by those in government, and used only for the intended purpose.  And it is theft, plain and simple.

 

© 2008 Marti Oakley