FacebookTwitterGoogle+RedditEmail

Looting Social Security

by PAUL CRAIG ROBERTS

Hank Paulson, the Gold Sacks bankster/US Treasury Secretary, who deregulated the financial system, caused a world crisis that wrecked the prospects of foreign banks and governments, caused millions of Americans to lose retirement savings, homes, and jobs, and left taxpayers burdened with multi-trillions of dollars of new US debt, is still not in jail. He is writing in the New York Times urging that the mess he caused be fixed by taking away from working Americans the Social Security and Medicare for which they have paid in earmarked taxes all their working lives.

Wall Street’s approach to the poor has always been to drive them deeper into the ground.

As there is no money to be made from the poor, Wall Street fleeces them by yanking away their entitlements. It has always been thus. During the Reagan administration, Wall Street decided to boost the values of its bond and stock portfolios by using Social Security revenues to lower budget deficits. Wall Street figured that lower deficits would mean lower interest rates and higher bond and stock prices.

Two Wall Street henchmen, Alan Greenspan and David Stockman, set up the Social Security raid in this way: The Carter administration had put Social Security in the black for the foreseeable future by establishing a schedule for future Social Security payroll tax increases. Greenspan and Stockman conspired to phase in the payroll tax increases earlier than was needed in order to gain surplus Social Security revenues that could be used to finance other government spending, thus reducing the budget deficit. They sold it to President Reagan as “putting Social Security on a sound basis.”

Along the way Americans were told that the surplus revenues were going into a special Social Security trust fund at the U.S. Treasury. But what is in the fund is Treasury IOUs for the spent revenues. When the “trust funds” are needed to pay Social Security benefits, the Treasury will have to sell more debt in order to redeem the IOUs.

Social Security was mugged again during the Clinton administration when the Boskin Commission jimmied the Consumer Price Index in order to reduce the inflation adjustments that Social Security recipients receive, thus diverting money from Social Security retirees to other uses.

We constantly hear from Wall Street gangsters and from Republicans and an occasional Democrat that Social Security and Medicare are a form of welfare that we can’t afford, an “unfunded liability.” This is a lie. Social Security is funded with an earmarked tax. People pay for Social Security and Medicare all their working lives. It is a pay-as-you-go system in which the taxes paid by those working fund those who are retired.

Currently these systems are not in deficit. The problem is that government is using earmarked revenues for other purposes. Indeed, since the 1980s Social Security revenues have been used to fund general government. Today Social Security revenues are being used to fund trillion dollar bailouts for Wall Street and to fund the Bush/Obama wars of aggression against Muslims.

Having diverted Social Security revenues to war and Wall Street, Paulson says there is no alternative but to take the promised benefits away from those who have paid for them.

Republicans have extraordinary animosity toward the poor. In an effort to talk retirees out of their support systems, Republicans frequently describe Social Security as a Ponzi scheme and “unsustainable.” They ought to know. The phony trust fund, which they set up to hide the fact that Wall Street and the Pentagon are running off with Social Security revenues, is a Ponzi scheme. Social Security itself has been with us since the 1930s and has yet to wreck our lives and budget. But it only took Hank Paulson’s derivative Ponzi scheme and its bailout a few years to inflict irreparable damage on our lives and budget.

Years ago with stagflation defeated and a rising stock market, I favored privatizing Social Security as a way of creating a funded retirement system and producing greater savings and larger incomes for retirees. At that time Wall Street was interested, not for my reasons, but in order to collect the fees from managing the funds.

Had Social Security been privatized, I doubt that Wall Street would have been permitted to deregulate the financial system. Too much would have been at stake.

After the latest crisis brought on by Wall Street’s dishonesty and greed, trusting Wall Street to manage anyone’s old age pension requires a leap of faith that no intelligent person can make.

Wall Street has got away with its raid on the public treasury. Now, pockets full, it wants to pay for the heist by curtailing Social Security and Medicare. Having deprived the working population of homes, jobs, and health care, Wall Street is now after the elderly’s old age security.

Social Security, formerly an untouchable “third rail of politics,” is now “unsustainable,” while the real unsustainables–a pre-1929 unregulated financial system and open-ended multi-trillion dollar Global War Against Terror–are the new untouchables. This transformation signals the complete capture of American democracy by an oligarchy of special interests.

PAUL CRAIG ROBERTS was an editor of the Wall Street Journal and an Assistant Secretary of the U.S. Treasury.  His latest book, HOW THE ECONOMY WAS LOST, has just been published by CounterPunch/AK Press. He can be reached at: PaulCraigRoberts@yahoo.com

 

Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal. Roberts’ How the Economy Was Lost is now available from CounterPunch in electronic format. His latest book is The Neoconservative Threat to World Order.

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
February 17, 2017
Friday - Sunday
David Price
Rogue Elephant Rising: The CIA as Kingslayer
Matthew Stevenson
Is Trump the Worst President Ever?
Jeffrey St. Clair
Roaming Charges: Tinker, Tailor, Soldier, Flynn?
John Wight
Brexit and Trump: Why Right is Not the New Left
Diana Johnstone
France: Another Ghastly Presidential Election Campaign; the Deep State Rises to the Surface
Neve Gordon
Trump’s One-State Option
Roger Harris
Emperor Trump Has No Clothes: Time to Organize!
Joan Roelofs
What Else is Wrong with Globalization
Andrew Levine
Why Trump’s Muslim Travel Ban?
Mike Whitney
Blood in the Water: the Trump Revolution Ends in a Whimper
Vijay Prashad
Trump, Turmoil and Resistance
Ron Jacobs
U.S. Imperial War Personified
David Swanson
Can the Climate Survive Adherence to War and Partisanship?
Andre Vltchek
Governor of Jakarta: Get Re-elected or Die!
Patrick Cockburn
The Coming Destruction of Mosul
Norman Pollack
Self-Devouring Reaction: Governmental Impasse
Steve Horn
What Do a Louisiana Pipeline Explosion and Dakota Access Pipeline Have in Common? Phillips 66
Brian Saady
Why Corporations are Too Big to Jail in the Drug War
Graham Peebles
Ethiopia: Peaceful Protest to Armed Uprising
Luke Meyer
The Case of Tony: Inside a Lifer Hearing
Binoy Kampmark
Adolf, The Donald and History
Robert Koehler
The Great American Awakening
Murray Dobbin
Canadians at Odds With Their Government on Israel
Fariborz Saremi
A Whole New World?
Joyce Nelson
Japan’s Abe, Trump & Illegal Leaks
Christopher Brauchli
Trump 1, Tillerson 0
Yves Engler
Is This Hate Speech?
Dan Bacher
Trump Administration Exempts Three CA Oil Fields From Water Protection Rule at Jerry Brown’s Request
Richard Klin
Solid Gold
Melissa Garriga
Anti-Abortion and Anti-Fascist Movements: More in Common Than Meets the Eye
Thomas Knapp
The Absurd Consequences of a “Right to Privacy”
W. T. Whitney
The Fate of Prisoner Simón Trinidad, as Seen by His U. S. Lawyer
Brian Platt
Don’t Just Oppose ICE Raids, Tear Down the Whole Racist Immigration Enforcement Regime
Paul Cantor
Refugee: the Compassionate Mind of Egon Schwartz
Norman Richmond
The Black Radical Tradition in Canada
Barton Kunstler
Rallying Against the Totalitarian Specter
Judith Deutsch
Militarism:  Revolutionary Mothering and Rosie the Riveter
Nyla Ali Khan
Kashmir Evoked a Lot More International Attention in the 1950s Than It Does Now
Adam Phillips
There Isn’t Any There There
Louis Proyect
Steinbeck’s Red Devils
Randy Shields
Left Coast Date: the Dating Site for the ORWACA Tribe
Charles R. Larson
Review: Bill Hayes’ “Insomniac City”
David Yearsley
White Supremacy and Music Theory
February 16, 2017
Peter Gaffney
The Rage of Caliban: Identity Politics, the Travel Ban, and the Shifting Ideological Framework of the Resistance
Ramzy Baroud
Farewell to Doublespeak: Israel’s Terrifying Vision for the Future
FacebookTwitterGoogle+RedditEmail