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Throwing Granny from the Gravy Train


For going on 2 decades now the great right wing/business class project of repealing the 20th century has been steadily advanced. It’s now become a bipartisan undertaking, barely missing a beat regardless of which party dominates Washington.

Between 1932 and 1972, working people held some measure of political power, and that translated into a relatively broad-based economic prosperity (by American standards). Taxes on the wealthy and corporations were nearly triple their current rates. The money went to things that generally benefited the public.

In the 30s a social insurance plan called Social Security was established over the strenuous objections of the Republican party. Its funding was savagely regressive, paid for by a tax on earned wages but not on capital or so-called “unearned income” like stock options or capital gains. Yet, in the brute scheme that is America it was and remains the crown jewel of New Deal attainment. It was long considered the “third rail of American politics: Touch it and die.”

In the 60s, with Democrats overwhelmingly controlling congress again, Medicare became law and health care for seniors became a right. That’s as far as we got. Vietnam and the Republicans’ race-based “Southern Strategy” splintered the Democratic party.

A decade later the senescing Ronald Reagan and the “conservative” wrecking crew that surrounded him held the Capitol and the roll-back began in earnest. They knew what they wanted: More money in rich people’s pockets and a bigger military. And they knew what stood in the way.

Reagan’s budget director, David Stockman was clear that “sweeping curtailment of middle class entitlements” would be necessary. Though it would be prudent to keep that part of the plan “shrouded in mystery, at least temporarily,” the Reagan Revolutionary was clear that “huge tax cuts and a big defense increase,” would require “storming the twin citadels of the welfare state—-Social Security and Medicare.” (see Stockman, The Triumph of Politics, 1986)

Early in Reagan’s administration, when Social Security was only months away from running out of money (as it had been several times before), changes were made based on recommendations of the “Greenspan Commission.” Payroll taxes were raised, and with the baby boom retirees in mind, the system became “advance funded.” Historically the structure had been a simple generational transfer, with current workers’ FICA taxes paying benefits to current retirees.

Under the new regime, trillions of dollars would accumulate in the trust fund awaiting Boomer and other 21st century retirements. That money would be invested at interest in US Treasury bonds. Under all but the darkest future scenarios, the trustees pronounced the problem solved. And so, quite frankly, it was.

In even the grimmest of times, with decades of glacial economic growth, retirees’ checks would be funded by FICA withholding and, if needed, the accumulated interest from the T-bills. If palsied growth should continue, finally the treasury notes themselves would be cashed out.

But as the trust fund swelled, its lure became irresistible to Wall Street and other business interests. They began funding propaganda offensives and political campaigns focused on creating the utterly false and pernicious idea that Social Security—though awash in cash and commitments from the federal treasury—was or would soon be “bankrupt.”

“It’s only prudent to leave this sinking ship while we can,” cooed the financiers. Better to haul that pile out of the federal treasury and entrust it to say, Enron pyramid schemers or the wiz-kids at Bear Stearns.

With “markets” tanking, the privatization argument isn’t being pushed too hard currently. But the gloom and doom cover story, (“crisis,” “fiscal train wreck,” “demographic tidal wave,” “looming insolvency,” etc.) continues unabated. Despite its palpable dishonesty the media system generally reports it as unalterable fact.

Thus AP Economics Writer Martin Crutsinger’s story on the issuance of the annual Social Security Trustees’ Report (3/25/08) was all about “enormous challenges.” There was the usual gnashing of teeth about the year 2017 when (under the trustees’ favored endless recession scenario), the program “begins paying out more in benefits than [it] collect[s] in payroll taxes.” The fact that tapping the interest and perhaps the principal of the advance funded system is simply proper and expected functioning of the 80s era reform is nowhere mentioned.

Inconvenient facts are easily swept aside in conventional journalism. All that matters is what government officials or their business class funders say. The same people that used the demonstrably phony hobgoblin of Iraqi WMD as pretext for nearly 2 decades of sanctions, pitiless genocide and now an illegal war of aggression, rolled out, at the same time, the poisonous whopper that Social Security faced an inevitable funding crisis. A credulous and corporate media served as designated strumpet/cheerleader in both fraudulent campaigns. As Crutsinger’s gruesomely one-sided and infuriatingly typical piece demonstrates, trying to discover something approaching the truth and reporting it to the population is apparently becoming increasingly difficult/ impossible for conventional domestic news organizations.

As satirist Stephen Colbert noted a while back, “getting both sides of the story” now means getting “the president’s side AND the vice president’s side.”

While some Democratic congressional leaders have lately dismissed the need for “saving” (i.e. cutting) Social Security, front-runner Obama has insisted on using Republican talking points, warning of a “funding shortfall” and a looming “crisis” for the program. He’s a smart guy. He knows better.

But he’s part of the bipartisan Washington consensus that favors more Pentagon spending and lower taxes on the wealthy. Somebody has to pay for the bigger military, Iraq occupation, increased terror bombing of Afghanistan mud-huts, Iran invasion, weapons in space, etc.

The money waits inside the twin citadels of Social Security and Medicare.

Each Trustee Report is a weapon of mass deception—another propaganda mortar shell in the relentless siege.

The walls, you see, must come down.

RICHARD RHAMES is a dirt-farmer in Biddeford, Maine whose place is just north of the Kennebunkport town line. Since 1990, Rhames has been the chair of the Biddeford Democratic City Committee, an organization charged with “promoting the ideals of the Party.” He can be reached at:





RICHARD RHAMES is a dirt-farmer in Biddeford, Maine (just north of the Kennebunkport town line). He can be reached at:

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