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Tuesday, December 28, 2004

Social Security Is NOT An Investment

Anybody else sick of hearing the, well, lies, and whining about Social Security from Bush and the other maxicons?

Here are the major, and as usual, misleading, parroting points, followed by some actual truths about Social Security:

“Too many people get out more than they pay into it.”

“People should save for their own retirement.”

“Social Security is broken and unsustainable. It will collapse if we don’t fix it.”

“Do you trust your government to invest your money more than you trust yourself?”

This is all another “partial-birth abortion,” folks. It’s another “marriage penalty.” It’s another “WMD.” It’s a lie.

FOR THE RECORD: SOCIAL SECURITY IS NOT AN INVESTMENT. IT IS AN INSURANCE POLICY.

Social Security is NOT an investment.

Social Security is NOT a retirement fund.

Social Security is NOT a handout.

Social Security is NOT inefficient.

Social Security is NOT going bust.

Yes, SSI is an insurance policy. That’s what the “I” is for in SSI. And insurance works on the principal--or it’s supposed to, until it gets into the greediest hands--that individuals are more secure when they pool their risk. I pay $200 a month for health insurance (up 70% since Bush took office: I paid $130 in 2000), and I use about $100 a month worth. But I know that God forbid, if something catastrophic happened, I’d have it to fall back on, so I’m not outraged at the people who are paying $300 a month and using $600 a month worth of medical care. It’s the nature of insurance. Some use it more if they need it. That’s why it’s called “insurance.”

Insurance, as I understand it, started with shippers who wanted to pool their risk. Most of the cargo arrived safely, but some of it was hijacked, or just disappeared into the ocean in a storm or the like. Carriers realized that if they pooled their risk, each paying into a fund, that there was financial safety in numbers. It was a financial community of sorts. If one shipper lost his shorts, he wouldn’t wind up in the poor house. And it was in all their interests to participate because no matter how careful you are, you can never avoid all the pitfalls of the sea, whether storms, pirates, or Moby Dick.

But the point of a business, even more so a corporation, is to maximize return and minimize risk and loss. And insurers got greedy.

So companies started to try to exclude people who need insurance (the elderly, the sick, the injured), either by outright excluding them or by making their rates prohibitively expensive. Just look to your own life and what you’ve seen for proof. Some insurers also try to maximize profit by being as difficult as possible about paying. (Many companies don’t).

It’s easier to make money if you limit the pool of insured to those who won’t actually use the insurance. Or make it outrageously expensive for those who have the unmitigated gall to have an accident. Or a robbery. Or a health crisis. It’s downright irresponsible of them to actually NEED insurance, don’t you think?

The ideal customer is, of course, someone who pays every month (a little late so they can get charged the late fee) but never uses the insurance.

For the record: Men pay less for health insurance when they are younger because men tend to avoid going to the doctor. But men pay more for it when they’re older because their health is usually worse—because they didn’t use their health benefits when they were younger.

Certainly, insurers need good actuaries who will crunch out appropriate premiums for the risk. But insurers (and apparently the general public) has forgotten that the point of insurance is to pool the risk so that no one goes under. That means as part of the insurance business, you have to pay out, and some will get paid more than others. Period. Get over it.

Seeing that we are all insured against poverty in our injury, tragedy, or old age is crucial. That we all participate in it is equally crucial to the nature of insurance.

Maybe the cons are right. It is an investment.

But as usual, they’re totally wrong. Because (and I’ll spell this out for anyone who’s heart is ten sizes too small, which keeps the blood flowing to the brain) it’s not an investment in your retirement.

It’s an investment in society.

Keeping people, possibly me, possibly people I know, and definitely living, breathing people from the desperation of utter poverty? That’s something I can get behind. (As could Jesus).

That’s the major misrepresentation. Now that we understand what Social Security IS, let’s take a look at what else it’s not.

Social Security is NOT inefficient.

Social Security has a 1% operating cost. That’s more efficient than ANY private insurance company. (Medicare has a 2.5% operating cost. Compare that with 7-15% or more for any private health care company.)

Sure, it’s in part because Social Security doesn’t need to pay rent, taxes, or sky-high CEO salaries. It doesn’t need to show a profit. And that’s exactly why it’s necessary. It’s Social SECURITY, not, say, the fantastic name for privatization I heard on Air America the other day: RISK-BASED RETIREMENT.

Social Security is an insurance policy we all pay into so that we and everyone else in the country has a floor to fall on.

Social Security is NOT a retirement fund.

What? That’s right, folks, Social Security is NOT a retirement fund. Social Security is there for, say, a child who loses his parents and has no other means of support. It’s there for the mentally ill. It’s there for the too-injured to work (and contrary to popular con opinion, it’s not abused anywhere near as much as they insist. Anyone trying to get on SSI has to be motivated enough to go through at least two, possibly three challenges, medical examinations, and wait months to years for a resolution—all for a maximum of perhaps 60% of your regular salary.)

Social Security is NOT a handout.

Again, it’s a common insurance policy we all pay into. If you have an accident, you damn well want your insurance company to pay up. Unless you own the insurance company.

The irony here is that when it comes to insurance policies, the cons are always looking to the government to bail them out and pay their way for irresponsible business decisions, or finding ways to avoid paying their fair share, but screaming about anyone else getting lifesaving help. Airline executives look to the government to both relieve them of and then pay their pensions after declaring bankruptcy. Neil Bush and friends plundered the Savings and Loans, knowing that the FSLIC (Federal Savings and Loan INSURANCE Corporation) would bail them out. Wal-Mart underpays employees and includes information about public assistance in its employee handbook. Numerous big companies demand huge tax and legal concessions to open a store in a community—the concessions are often more than the jobs and infrastructure the company provides to the community. The list goes on and on. Think about it and you can add a hundred of your own examples without even batting an eye.

Social Security is NOT going bust.

Unless the cons make it go bust, which they’re doing everything in their power to do.

Social Security, if left alone, would be solvent. But due in part to the huge payoffs (also known as tax cuts) it’s now more in danger than ever. Even conservative politicians admit Social Security is solvent. Bush himself has been quoting problems SEVENTY years out. How the hell can anyone know what’s going to happen seventy years from now. That’s not planning. That’s using whatever number you can find to try to make what you say sound like the truth.

Let’s remember who raided the Social Security coffers. And believe me, it wasn’t for the “trifecta” Bush is so self-congratulatorily clever about mentioning all the time. (More or less “I won’t touch the Social Security funds except in times of recession, war, or national emergency,” a talking point apparently stolen from Al Gore in the 2000 election.)

If the Bush tax cuts were repealed, Social Security would be solvent for many years. If the base income from which Social Security contributions are taken were raised from all income up to $80K to all income up to $120K, the problem would be solved for eternity. And ironically, the Bushies have been talking about doing that, too. (Ya see, this here’s not officily a tax inrcreas. It’s jus uppin the conribushun level). More BS from the BS experts at the Bush White House.

The fact is that Neocons don’t believe in Social Security. Or labor law. Or anything that gets in the way of making money for business owners, corporate board members, the investor class, and the rest. That’s the real point of these Social Security “reforms.” To get the money into the stock market so investors can make money off it. And the investors making money off it won’t be you and me. We’re at the bottom of this pyramid scheme. Don’t let them fool you.

Social Security is a needed social insurance policy for an advanced society that has dreams of liberty and justice for all. A country that wants all to have the right to life, liberty and the pursuit of happiness.

Insurance is a protection for your hopes, dreams, and family. Ask any insurance agent—or insurance company owner, for that matter.

4 Comments:

  • At December 31, 2004 at 10:05 AM, Anonymous Anonymous said…

    I agree with your points about social security, but I need to point out a couple of corrections. SSI stands for supplemental security income, and while it is administered by the social security dept., it is a program based strictly on financial need, no matter what the age. The amount given per month is, the last I heard, about $560. Not enough to live on, but usually people also get food stamps and if they wait around long enough, subsidized housing. People do not have to have paid in to social security to receive SSI, and there is not the long wait nor the hurdles to jump over to receive it. What you were talking about when you talked about people who are disabled, mentally ill, etc, is SSD, and people do have to go through many hurdles and a long wait to receive it. The amount received is based on what they have contributed over the years, or if disabled when a dependent, based on what the parent has contributed.

     
  • At December 31, 2004 at 3:15 PM, Anonymous Anonymous said…

    The comment from the other "Anonymous" is correct. SSI does not require any prior contribution by the recipient. It is NOT an insurance policy! It is, in fact, a federal welfare program. Of course, the Democrats are all in favor of any and all types of welfare programs because they support the "poor" for free. Well, I've seen many of these "poor" people and the majority of them are perfectly able to work. Yes, there are many people in this country who, due to mental or physical handicaps, are unable to sustain gainful employment--they need help. However, there are many more who are just plain lazy and know they can receive a monthly check from Uncle Sam if they play the system right. Personally, I am sick and tired of working hard every day to support these losers! I've seen them sitting outside their government subsidized housing, in the middle of the day, drinking their 40's and smoking their cigarettes, and whatever else they might be doing to waste a day. Social Security might not be broken, but the system DEFINITELY is!

     
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