Privatization Pep Rally

Max Sawicky sawicky at
Wed Jul 29 09:18:53 PDT 1998

A few remarks . . .

>I don't know whether it is a "done deal" or not, though I tend to agree
>with Chuck that it probably is. And a disorganized left probably can't
>have much immediately effective input. Any effective opposition, if it
>comes, will have to come from the organizations of the pseudo-"middle
>class" (i.e., organizations of proletarians who consider themselves
>"middle class" such as the National Association of Retired People).

You're referring to the American Association of Retired Persons, which is indeed (upper) middle class in orientation. But there is also the National Council of Senior Citizens, which is retired trade unionists, and the 2030 Center, which is a progressive youth group.

Much of the weight of reforms will be on those still working and not likely to retire for another 15 years, at least. It's mostly a matter for the Baby Boomers. The existing seniors, particularly those in the program now, will not be much affected, if at all. (An exception is if they monkey with the COLA adjustments.) This presents an obvious problem, in that the senior groups are looked to as an important viewpoint on the question and their present members are not so much in the line of fire.

>BUT, HAVING SAID THAT, Chuck's positive suggestion is positively
>vicious, because *any proposal whatever* for "solving" the Social
>Security System contains, as a concealed premise, a fundamental LIE:
>that a problem exists to be solved.

It's true that nothing really needs to be done for another 15 years or so. If the projections are accurate, however, there will be a funding shortfall, not too large, to fill with either higher taxes, lower benefits, or some combination thereof, in about 30 years.

>The WSJ perceived (in an editorial I mentioned some time ago) that even
>*opening* the question of Social Security (as Clinton had) in fact
>placed the system on a slippery slope to privatization. As that infamous

Clinton didn't open it. The Trustees did by issuing their actuarial report, which they are required to do by law periodically, and which report, while open to criticism, is not so biased as to entirely distort its findings. Given the biases of assorted elites, it would be impossible for any president not to acknowledge the issue.

The real slippery slope to privatization rests on two fallacious notions:

one is the savings paradigm, fully bought into by Clinton and most economists, that to ensure a prosperous future, we have to reduce consumption spending in the present;

the second is that the stock market and individual investment in general is a viable escape hatch for people to finance a secure retirement. Clinton is more waffly on this, though clearly not trustworthy (duh).

> . . .
>In so far as leftists can find any crack through which to express their
>own responses, they should demand "NO CHANGES TO SOCIAL SECURITY." And
>they should be aware as they make this claim that unless mass actions in
>the streets can be mobilized, their demand is utterly utopian -- but at
>least it would not actively carry on the program of Clinton-WSJ by
>admitting that there was a problem to be solved.

I'm afraid a 'no changes' demand would marginalize the demanders. Better to accept innocuous changes and have some concrete alternative to offer. If the pessimistic predictions fail to come to pass, there will be no problem reversing the 'fixes.' Congress has never been reluctant to increase SS benefits when the money was there.

All of the privatization schemes can be shown to entail higher taxes and lower benefits. If we can reframe the question as, what kind of tax hike/benefit cut is least undesirable, we will save the program.


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