Burnt Orange Report

An honest debate

By Nathan Nance

Guest post by Nate Nance

I'm all for an honst debate on the merits of privatization. Andrew and I don't agree one bit, but we're able to have a serious discussion because we're both reasonable and we'll use facts to back up our arguments.

But I'm getting really sick of the crap the Republicans are trying to pull on this. As I was getting ready for work today, I managed to catch Sen. John Sununu on Lou Dobbs talking about the benefits of privatization. Sununu made several assertions, everyone one of them demonstrably false. Things like "The system will go bankrupt in 2042" which it won't. The trust fund will go bankrupt in 2042 (or 2053 if we have better than 2% economic growth over the next 40 years). But since the trust fund was a temporary fix to the fiscal hurdle of the baby boomers retirement after increasing benefits for retirees throughout the 60s and 70s. We all planned on the trust fund ending, which is why we are going to quit paying into it in 2018. Sununu knows this and is trying to mislead people with lies, or if he doesn't and he's just reading talking points, he doesn't deserve to hold an office higher than dog catcher.

I'm pissed about this kind of thing because they keep getting away with it and people like Lou Dobbs don't correct the record on their own damned shows. Dobbs has a responsibility to his audience to let them know the truth about the subject they are debating. If he isn't going to do his job, then I don't see why he has a job. It's unethical to allow people to lie on your show like that. Blatant lies that Dobbs, who I assume knows as much about how the Social Security sytem works as a 22-year-old sports clerk, should have been all over.

Sununu also talked about the lowered interest rates that come from a good ecoomy where people are saving more and investing in the market. He doesn't bother to tell us that has nothing to do with Social Security. We have a three-legged stool of retirement to stand on in this country. One leg is Social Security, which at the moment, is the sturdiest because the other two, private pensions and private investment accounts, are too risky because they rely on the market. That hasn't turned out too well so they want to do it to Social Security. He also doesn't mention that borrowing $2 trillion dollars is going to significantly raise interest rates.

And finally, Sununu peddles the $12 trillion shortfall in the system number. That number was reached because the Trustees were asked to calculate what the shortfall is to infinity. The final tally at the end of infinity (I know, end of infinity?) is $10.2 trillion dollars. I have a lot of problems with this, the least of which is that Dobbs didn't call him on rounding up $1.8 trillion, which is not an insignificant sum. It is literålly impossible to calculate the economic situation of the US infinity from now, making the number totally meaningless. We can make reasonable assumptions about the state of our economy 75 years from now, which the actuaries of Social Security and the Congressional Budget Office did. They found that the number is actually $2 trillion to $3.7 trillion, which over 75 years is pretty good. If we raise the cap on payroll taxes to $100,000 and don't make the Bush tax cuts permanent, we've literally covered our shortfall in the system. Problem solved.

Well not really. When the trust fund goes bankrupt there will be an abrupt drop in benefits to about 80% of what they would be. That's still going to be more than what people get in full benefits now, but we can lessen this shock by doing a few things. But privatization does nothing to address any real shortfalls in the system and it doesn't address the lack of savings in the other two legs of the retirement stool. All privatization does is destroy the solvency of Social Security and put dangerous pressure on our economy. It's time to have an honest debate, but we can't do that if the Republicans are going to keep lying.

This is a guest post from Nathan Nance. He is a sports/news clerk at the Waco Tribune-Herald and writer/editor of Common Sense a Texas-based Democratic Web log. He can be reached at nate_nance@yahoo.com.