FacebookTwitterGoogle+RedditEmail

Whoops! What Crisis?

by

The wind has suddenly been knocked out of sails of those critics of Social Security and Medicare in Washington — Republican and Democrat — who have for years been warning direly that the two programs were going bust. Suddenly their favored “rescue” plans for these crucial programs — turning to a stingier way of calculating the annual inflation adjustment, raising the retirement age, and even reducing benefits for Social Security, and cutting benefits for Medicare — don’t make sense to anyone.

Thanks to an improved jobs picture, a marked slowdown in health care cost inflation and other factors, the latest annual Trustees Report from the Social Security Administration paints a picture of a much improved situation. As things stand now, this report says the Trust Fund that was built up, starting back in the early 1980s, to cover the anticipated increase in benefit payments to the wave of Baby Boomer retirees, will not be exhausted until 2033, which happens to be about the time that the last Baby Boomers born in 1964 will be retiring, and when the wave of 78 million Boomer retirees will be starting to shrink as early boomers born in the late 1940s and 1950s begin to die off (the oldest Boomers, born in 1946, will be 87 in 2033).

The Medicare Trust Fund, too, is looking much better. As recently as last year, it was being projected to run out in 2026, but now it looks like it will still have a positive balance in 2030.

What this means is that actually shoring up these two programs so that they will be fully funded and able to pay full retirement benefits to retirees and health benefits to all those on Medicare, should be much easier than and less painful to all concerned than the voices of doom in Washington have been threatening.

For example, just eliminating the cap on income subject to the Social Security payroll tax, currently set at 6.2% for employers and 6.2% for employees, but only on the first $113,400 of income, so that all income becomes subject to the tax, including the income of millionaires and billionaires, would fully fund the program way out past 2075, when the last Baby Boomer have long moved on to that great Woodstock in the sky.

That’s not such a bad idea really. The cap on income subject to the 1.45% Medicare tax on employers and employees was eliminated some time ago and the American economy as we know it didn’t come crashing down as critics warned.

Fact is, in the Scandinavian countries and Finland, the national pension tax is a heck of a lot higher than it is in the US, and their economies are doing quite well, thank you. Their companies compete well on world markets too, and without moving their operations and jobs abroad to low-wage countries. In Germany, for example, the largest export economy in the world after China, employers and employees pay a 19.6% combined payroll tax, split 50/50, for a much more generous retirement pension. The combined US payroll tax rate is, by comparison, a paltry 12.4%.

Interestingly, polls show that 68% of US citizens favor eliminating the cap on income subject to Social Security payroll taxes. That’s more than 2/3 of Americans, and if you think about it, it’s hard to get two-thirds of American’s to agree on anything.

So why hasn’t this been done, you might well ask.

Well, it gets to the question of whether the US is really a functioning democracy or just the shell of one. If it were really a government of, by and for the people, clearly that income cap would be long gone, if it were ever even established in the first place. But the capitalists basically own our politicians, thanks to the unlimited campaign funding they can provide, so instead of talk about ending the income cap, we still hear calls for replacing the Consumer Price Index with something called the Chained-CPI as a way of calculating the annual Social Security benefit inflation adjustment. Chained-CPI is really just a form of leaglized theft from the elderly and disabled. It is based on the fraudulent “theory” that when people can no longer afford one item in the CPI “marketbasket” of goods and services, they will switch to a cheaper substitute. Beef too expensive? Switch to chicken. Chicken too expensive? Switch to beans. Rent too high? Move to a cheaper neighborhood or a smaller apartment. LED lightbulbs too costly? Switch to candles.

Of course, that’s not what people really do. Old people particularly cannot easily move. Instead, if rents go up, they cut back on calories in their meals and go hungry. If food gets to expensive, they cut back on needed medical care.

With this new report from the Social Security Administration in hand, it’s time for Americans to go on the offensive to demand not cuts in Social Security and Medicare, but expanded benefits and lower costs for both programs. Tax the rich! Control drug costs and hospital costs! Make it illegal for doctors to refuse to accept Medicare patients!

Of course, the real answer to the Medicare funding problem is to toss out the whole mess that is Obamacare, and to make everyone eligible for Medicare, which is how they do it in Canada and most of Europe, at roughly half the cost both per person and as a portion of Gross Domestic Product as we spend in the US on medical care.

I have long argued that Social Security and Medicare, the two most popular government programs in this country, supported even by the right-wingers in the Tea Party (your remember them right?: those people carrying the signs saying “Keep your government hands off of my Social Security and Medicare!”), should become the cornerstone of a new progressive movement — one working outside of the corrupted two-party system and outside of simply electoral politics.

Most Americans these days are desperate about paying for their health care in old age, and about simply having enough money to live on after they are no longer able to work. Already, we’re seeing people working into their 70s and 80s because they simply cannot afford to retire.

This is an outrage! And it’s an outrage not just to the old and near-old, but to the children and grandchildren of those older Americans, who don’t want their grandparents and other older relatives living in poverty, and don’t want to be put in the position of having to pay for their food, lodging and health care.

What we need now is a Social Welfare Movement modelled after the Civil Rights Movement — a militant movement across region, race and class to demand real change. We need millions of people marching regularly on, and camping out in Washington, DC to demand a real national pension like they have in most of the countries of Europe, and a national health program like they have in Canada, Germany, France and the UK.

The interesting thing is, if we do this, all the other progressive demands we share — taking back government from the corporations and the rich, revitalizing our schools, rebuilding our highways and parks, defending our environment, and ending the nation’s obsession with wars and imperial conquest, will flow from this.

As the political scientists Bo Rothstein, of Sweden’s Göteburg University, and Eric Uslaner of the University of Maryland, have written, have written in a study of various national social security systems, “We argue that university social programs that cater to the whole (or very broad sections) of society, such as we find in the Scandinavian countries especially, promote a more equitable distribution of wealthy, (and) more equality leads to a greater sense of social solidarity — which spurs generalized trust. Generalized trust, in turn, leads to more equality.”

Sounds like a good idea to me, and a terrific antidote to the growing anti-social and divisive attitudes so typical in these so-called United States of America.

Dave Lindorff is a founding member of ThisCantBeHappening!, an online newspaper collective, and is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).

Dave Lindorff is a founding member of ThisCantBeHappening!, an online newspaper collective, and is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

Weekend Edition
December 09, 2016
Friday - Sunday
Jeffrey St. Clair
Roaming Charges: Nasty As They Wanna Be
Henry Giroux
Trump’s Second Gilded Age: Overcoming the Rule of Billionaires and Militarists
Andrew Levine
Trump’s Chumps: Victims of the Old Bait and Switch
Chris Welzenbach
The Forgotten Sneak Attack
Lewis Lapham
Hostile Takeover
Joshua Frank
This Week at CounterPunch: More Hollow Smears and Baseless Accusations
Paul Street
The Democrats Do Their Job, Again
Vijay Prashad
The Cuban Revolution: Defying Imperialism From Its Backyard
Michael Hudson - Sharmini Peries
Orwellian Economics
Erin McCarley
American Nazis and the Fight for US History
Mark Ames
The Anonymous Blacklist Promoted by the Washington Post Has Apparent Ties to Ukrainian Fascism and CIA Spying
Yoav Litvin
Resist or Conform: Lessons in Fortitude and Weakness From the Israeli Left
Conn Hallinan
India & Pakistan: the Unthinkable
Andrew Smolski
Third Coast Pillory: Nativism on the Left – A Realer Smith
Joshua Sperber
Trump in the Age of Identity Politics
Brandy Baker
Jill Stein Sees Russia From Her House
Katheryne Schulz
Report from Santiago de Cuba: Celebrating Fidel’s Rebellious Life
Nelson Valdes
Fidel and the Good People
Norman Solomon
McCarthy’s Smiling Ghost: Democrats Point the Finger at Russia
Renee Parsons
The Snowflake Nation and Trump on Immigration
Margaret Kimberley
Black Fear of Trump
Michael J. Sainato
A Pruitt Running Through It: Trump Kills Nearly Useless EPA With Nomination of Oil Industry Hack
Ron Jacobs
Surviving Hate and Death—The AIDS Crisis in 1980s USA
David Swanson
Virginia’s Constitution Needs Improving
Louis Proyect
Narcos and the Story of Colombia’s Unhappiness
Paul Atwood
War Has Been, is, and Will be the American Way of Life…Unless?
John Wight
Syria and the Bodyguard of Lies
Richard Hardigan
Anti-Semitism Awareness Act: Senate Bill Criminalizes Criticism of Israel
Kathy Kelly
See How We Live
David Macaray
Trump Picks his Secretary of Labor. Ho-Hum.
Howard Lisnoff
Interview with a Political Organizer
Yves Engler
BDS and Anti-Semitism
Adam Parsons
Home Truths About the Climate Emergency
Brian Cloughley
The Decline and Fall of Britain
Eamonn Fingleton
U.S. China Policy: Is Obama Schizoid?
Graham Peebles
Worldwide Air Pollution is Making us Ill
Joseph Natoli
Fake News is Subjective?
Andre Vltchek
Tough-Talking Philippine President Duterte
Binoy Kampmark
Total Surveillance: Snooping in the United Kingdom
Guillermo R. Gil
Vivirse la película: Willful Opposition to the Fiscal Control Board in Puerto Rico
Patrick Bond
South Africa’s Junk Credit Rating was Avoided, But at the Cost of Junk Analysis
Clancy Sigal
Investigate the Protesters! A Trial Balloon Filled With Poison Gas
Pierre Labossiere – Margaret Prescod
Human Rights and Alternative Media Delegation Report on Haiti’s Elections
Charles R. Larson
Review:  Helon Habila’s The Chibok Girls: the Boko Haram Kidnappings and Islamist Militancy in Nigeria
David Yearsley
Brahms and the Tears of Britain’s Oppressed
FacebookTwitterGoogle+RedditEmail