Lenin and the boys at Cato agree with Friedman: “Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”
We know what ideas our “leaders” have lying around. They’ve been drumming them into our heads for years. What shape might the coming crisis take?
Crisis needn’t be a hurricane or tsunami; it can be a financial disaster as well — even a phony one. As long as people are scared and confused and will do what you want them to — that’s all that matters.
Crisis might look like the perfect storm of mortgage meltdown, recession, declining industries and wages, rising deficits, all coming to a head as the boomers retire — and that unfortunate file cabinet full of IOUs, with — so sorry — “no money” to redeem them.
Combine that with a full-court press of pundits, preachers and politicians, all well-manicured and well-fed, none in any danger of going without in their old age, though they insist you must. All of them nattering away at you, on the TV, in the papers, on the radio, relentless as the zombies in The Night of the Living Dead:
“There’s no-o-o-o money! No-o-o-o money! If you don’t do what we say the country’s going to go broke and you’re all going to die!”
It might be that the 1983 debut of both Greenspan’s “reform” and the Cato paper wasn’t coincidental. It might be, indeed, that Greenspan created the debt to the Trust Fund with an inkling that it could eventually be hyped as a “crisis” to take down Social Security for good.
That’s how the IMF did it, Klein says. Get the rubes in debt, then pressure them to take your “shock treatment,” your austerity program. As in Chile, as in Russia, where poverty rates doubled and tripled after the treatment1; so here. We too must take our medicine.
Bugger that.
There’s no Social Security crisis. There never has been. If you’re not convinced yet, how about this: the projection used to hype the phony crisis assumes a growth rate of 1.8% over the next 75 years.2 That’s lower than the 1.9% average growth rate of the Great Depression, 1929-1940.3
But there are actually three projections; an optimistic one, an intermediate one, and a pessimistic one. In the “optimistic” scenario, long-term growth averages 2.6%, the Trust Fund never runs out, and there’s a 17-trillion dollar surplus in 2080.4 So far, reality has always turned out closer to the optimistic projection than the other two. Since 1980, growth has averaged 3.1%.5 Whee! Feel better?
Not that a projection 75 years into the future has any bankable accuracy anyway.
The projection, like “crisis” it predicts, is a fraud, a cynical Big Lie, a con. They want your money. That’s all they’ve ever wanted, and they’ll keep pushing until they get it, unless they know you understand the con.
The Republicans won’t save you, and the Democrats won’t save you either. They’re the ones up on the tube, debating oh-so-seriously about the “crisis” when they know it’s phony, pretending to disagree, all the better to con you. They’re the good cop and the bad cop, the inside and the outside man in the three-card game.6
They know that some of you’ll want to identify with the nice, caring Democrats, who’ll save Social Security by raising taxes — just a hair, just a smidge. And others will want to identify with the tough, fiscally responsible Republicans, who’ll institute sensible private accounts.
And while you’re watching the game, taking one side or the other, getting all riled up about the stupidity of the other side — they’re moving in, like the partners in crime they really are, for the coup de grace.
Here’s the straight story.
“The economy” isn’t the casino, isn’t the game, isn’t even the chits of paper we use to trade and keep score with. The economy is the real world of producing real goods and services. So long as American workers are producing real goods and real knowledge for decent wages, there will be enough surplus for their elders’ Social Security.
If, on the other hand, our “leaders” follow the road they’ve been on the last 30 years: off-shoring production, outsourcing democratic government to unaccountable private power, stripping resources faster than they’re renewed, allowing infrastructure and human skills to decay, and substituting a casino economy for a real one, we’ll all go broke, and private accounts won’t change that likelihood one bit.
Social Security’s not in crisis. Our leadership is. Our democracy is.
No tax hikes, no benefit cuts, no private accounts. Hands off, ya lying crooks.
Read Part 1, Part 2, Part 3, and Part 4.
- See discussion of the effect of “shock therapy” and privatization on Chile and Russia in Melanie Klein, The Shock Doctrine, 2007. [↩]
- Social Security Administration, 2004 Trustees Report, Table V.B.2, intermediate projection 2015-2080 = 1.8% GDP growth [↩]
- Growth % calculated from “Real GDP 1929-1940,” Louis D. Johnston and Samuel H. Williamson, “The Annual Real and Nominal GDP for the United States, 1790 – Present.” Economic History Services, 10/05. [↩]
- Social Security Administration, 2005 Trustees Report, Table VI.F7. [↩]
- Growth % calculated from “Real GDP 1941-2006,” Louis D. Johnston and Samuel H. Williamson, “The Annual Real and Nominal GDP for the United States, 1790-Present.” Economic History Services, 10/05. [↩]
- Three-card monte is a confidence game where the “mark” is tricked into betting he can find the money card among three face-down playing cards, a classic short con in which the outside man pretends to conspire with the mark to cheat the inside man, while in fact conspiring with the inside man to cheat the mark. (*definition from wikipedia) [↩]