Another letter the Star would not print

The following is a submission that addresses commonly held misconceptions concerning Social Security.  There are a million of them and the Republicans have been trying to spread them since the program was first enacted over 75 years ago.

Max Skidmore listed some of the ones that are routinely published in letters to the editor of the Kansas City Star and that go unchallenged because the paper refuses rebuttals to them:

Corrections to recent allegations regarding Social Security:

Every Treasury security is as much a “government IOU” as are bonds in the trust funds. FICA taxes are invested—in bonds that pay interest, and represent “real value.”

Ponzi schemes promise huge returns quickly, and collapse quickly. They require new investors at a geometrically increasing rate.

Social Security is not an investment, promises no wealth, is strong after 70+ years, requires no geometric increase of participants, and benefits no promoter. It is no Ponzi scheme.

Shorter life spans for Blacks and Hispanics do not mean that they collect “few, or no, retirement benefits.” Furthermore, groups with shorter life spans receive more benefits for children, widows, widowers, and the disabled. 

As for demographics, what is important is the percentage of people in the work force. Projections for 2030 are more favorable (44% in the workforce) than was the situation in 1965 (only 37%). 

Social Security is not only for retirement. It is far more efficient than any private system, operating at less than 1% of income for administration, and also protects against inflation.

Would privatization be better? Just ask former Enron employees about their 401Ks. THOSE were the worthless promises.

Op Ed the Kansas City Star would not print

The Star blocks commentary that goes against its biases.  The paper has long misrepresented and campaigned against the Social Security system.  They will print things sent by those who oppose Social Security and those who would profit from privatizing the program.

Professor Skidmore is an expert on the topic and has written two excellent books on the subject of Social Security.  His first was entitled, "Social Security and its Enemies."   His follow-up book is entitled "Securing America's Future"  Both are well worth reading for anyone who truly wants to understand the history of the program and how it works.  Social Security is a very successful "Insurance program" that over fifty million people rely upon for their retirement and for beneficiaries.

The following was written as an Op Ed. piece to the Star.  The Star routinely prints editorials submitted by such right-wing think tanks as the Cato Institute and the Heritage Foundation, both founded by wealthy men with right-wing agendas.  Originally, the Heritage Foundation was funded by Joseph Coors of the Coors brewing company.  Others such as Richard Mellon Scaife, the billionaire newspaper publisher, has joined the organization. Edward Crane, a libertarian and Charles Koch of Koch industries founded the Cato Institute in 1977.  The Koch brothers, worth around 40 billion dollars own the second largest privately held corporation in the United States.  These very wealthy men and their so-called think tanks are dead set on destroying every worthwhile program, including Social Security, that helps working class Americans.

The Op Ed piece below was written in response to a banker who wrote an editorial claiming the Social Security is a Ponzi scheme and should be privatized:

On September 2, the Star published an article, “Time to Create Some Real Security,” by Chuck Mikkelsen, identified as “a bank vice president.”  Mikkelsen recycles the common arguments against Social Security. It is surprising that there has not been an answer, because each of his arguments is wrong.

He says the “trust fund” is “nothing more than government IOUs,” but so is every dollar that circulates, and so is every Treasury security. He says that Social Security taxes are not invested, when, in fact, they are invested in government bonds. These bonds regularly pay interest back into the trust funds.

He denies that Treasury securities represent “real value” to Social Security. If Treasuries had no “value,” though, banks and pension funds would not invest in them.

He recklessly throws around the political talking point that Social Security is a “Ponzi scheme.” If it were, it could not have paid benefits regularly for more than 70 years. A Ponzi scheme is a fraudulent investment arrangement that promises huge returns in a brief period. It is unsustainable, because to fulfill its promises of wealth, it requires new investors at a geometrically increasing rate, an obvious impossibility.

Social Security, in contrast, is not an investment scheme, and does not promise quick wealth or extravagant gains. It does not require a geometric increase in the number of new participants. There is no promoter using the system for personal enrichment. It is simply a generation taking care of its dependents.

Our wealthy society is certainly able to take care of its own.  The issue is one of political will, not of economics. As the most affluent society in history, the United States of America can do nearly anything economically that it chooses to do.  Any changes that Social Security may require in future years will be well within the capacity of our economy to handle. Moreover, it is impossible for the U.S. Government literally to “run out of money.” We do not function in the Euro zone. So long as we control our own currency and pay our bills and debts in dollars, we literally cannot “run out.”

Mikkelsen resorts to an old slander when he claims Social Security is racist.  He says Blacks and Hispanics have shorter life spans, and then draws the ridiculous conclusion that they collect “few, or no, retirement benefits.”

Even if there were not huge numbers of Blacks and Hispanics retiring on Social Security, this argument overlooks the enormous benefits that the system pays to non-retirees. Groups with shorter life spans will receive more benefits for children and for widows or widowers. These groups may also have higher rates of disability payments.  Mikkelsen may not know that nearly one-third of all Social Security checks go to younger people, rather than to retirees.

The argument that the number of retirees is overwhelming the number of workers has been completely discredited. A more meaningful measure is the “dependency ratio”—the percentage of people in the work force as opposed to those not in the work force. That ratio is projected actually to be more favorable in 2030 than it was in 1965 (44% in the workforce in 2030 vs. 37% in 1965).  

Yes, the population is aging, but we must remember that Social Security is not only a retirement plan. It also provides benefits for the disabled, for children of deceased wage earners, and for the caregivers of those children. We must also remember that Social Security is far more efficient than any private system. It operates with tiny administrative costs (less than 1%) that no private system can match. An often overlooked fact is that it provides protection against inflation, as private arrangements do not.

So, in response to the implication that 401Ks—or privatization in any form—might be better, just ask any former employee of Enron whether he or she will receive more from Social Security, or from the 401K plans that turned out to be worthless promises.

Max J. Skidmore

Curators’ Professor of Political Science

UMKC

My State Senator, a neo-CON

My state Senator, Will Kraus, has a 0.0% voting record as judged by Missouri pro-vote.  He opposed a bill to save the Ford Motor Plant in Missouri.  He supported franchise tax cuts for less than 1/2 percent of all companies in Missouri.  That bill will cost the state $85 million dollars a year once it is fully implemented.  He has done many things to hurt the working class and poor in our state.

When I wrote the following letter to the Kansas City Star, I was told that it would be printed.  When it was not, I asked "Why not?"  I was told to ask the Editorial page editorial page editor why it was not printed.  I could not get her on the phone.  This woman has demonstrated her right-wing bias since she was promoted to that job from her previous position as Readers' Representative.  While the Editorials in the Star are generally spot-on, the letters column demonstrates a pro-conservative bias. 

When the federal economic stimulus money was offered to Missouri, my state Senator opposed accepting money that would keep school teachers on the payroll.  That money would have extended unemployment insurance for the long term unemployed.  Money from that stimulus money would have kept police and firefighters on the job.  Even though, my Senator opposed accepting the money. He was only one of two Republicans who received a "0" grade on their legislative votes.  The following is my letter that the Star refused to print:

Editor

State Senator, Will Kraus opposed taking federal dollars for education and extended unemployment for Missouri.  Would he refuse them if there was a national highway funding program?   Missouri has a fuel tax of 17.3 cents and no toll roads.  That tax has been the same for 18 years.  Only five states have a lower fuel tax, but Missouri has the 7^Th most miles of roads to maintain.  Now in the midst of a recession and high unemployment, the Missouri Department of Transportation will cut 1200 jobs across the state in 2012.  This is what happens when tax revenues do not cover necessities.  Missouri and other states benefited by the “Obama” stimulus plan.  Work was accomplished and people were employed.  What the state and the entire country needs are jobs; hundreds of thousands of jobs could be created by funding improvement and construction of highways and bridges, and schools, but maybe Missouri does not deserve federal assistance.  After all, when Missouri voters had a chance in 2002 to vote for a small increase in fuel and sales taxes to support our roads, they overwhelmingly voted “no”, and now we will live with the consequences. 

Our state Senator opposed accepting federal stimulus dollars that would have put thousands of Missourians back to work and would have kept others on the job.  He is typical of the Tea Party Republicans although he denies that he one of them.

This letter writer apparently has bought into the myth

The Star letters column often repeats myths that have circulated for years.  On or about October 4, 2011 a writer has repeated one of those claims and accused former President George W. Bush as being responsible for "pillaging" the trust funds and making them "insolvent".  The following is my response to that letter.  Of course, the Star would not publish my rebuttal.

"I have never defended George W. Bush; he was a horrible President who left our country with two wars, job losses and a huge national debt, but  a letter writer wrote in today's Kansas City Star to make the claim that "…. during the Bush administration, those popular programs" (Social Security and Medicare) had their reserves pillaged and became insolvent."  I'm sorry, but that is just not true.  Neither program is insolvent and not a dime was stolen, "pillaged" from either program.  Social Security can pay full benefits for the next 26 years.  Medicare is not in good shape, but it is far from insolvent.  Bush did push for a flawed Medicare Rx plan that is very expensive but he did not demand more revenues to support the program.  It galls me to have to protect Bush; he started two wars, one unnecessary, and cut taxes that led to huge budget deficits.  He did many things very badly, but he does not deserve the criticism leveled at him by the letter writer." 

Letters that the Kansas City Star did publish

Several writers had inane letters published all on the same day.  My letter to criticize them went unpublished.  One fellow wonders why discount coupons aren’t taxed as income.  While Republicans think that the rich should not pay more in taxes, they would love to tax the middle and low income individuals.  Another fellow wrote to ask why construction workers and their supervisors wear hard hats on the job.   I wonder what that writer does with his spare time.  A third writer, while meaning well, attacked the President for participating with NATO to oust Gaddafi in Libya.  Gaddafi has sponsored terrorism, has threatened to attack European countries and intended to slaughter thousands of his own people.  The U.S. provided minimal participation to oust Gaddafi but that fellow did not want President Obama to be involved in removing the murderous dictator.  A fourth fellow wanted the U.S. to do more drilling in this country.  He wants lower gasoline prices.  The U.S.  hit peak oil production decades ago.  Since Obama has been President, the U.S. has produced more oil each year than during any of the last four years of the Bush administration.  What was that fellow thinking?  Our dollar is cheap because of low interest rates; we are in stiff competition for what is left of the rest of the world’s supply of the scarce goo.  If we want lower fuel prices, we need to invest in renewable energy.  What were these four writers thinking?  And why is it that the Star would not publish my letter?

Through the years the Kansas City Star has published many letters

For many years, I wrote letters to the Kansas City Star letters column.  Most were published, but for the last several years they have been blocked.  I also wrote columns for the wholly owned subsidiary of the Star, the Lee's Summit Journal, a paper that blackballed me after I wrote a column critical of George W. Bush for planning to take the United States to war in Iraq.  From there, my relations with the Star have deteriorated to the point that the paper will print nothing that I write.  So, I will publish many of those unpublished letters here on my blog site.  The first letter, that you will find below, was written in response to a letter to the Midwest Voices column by a local banker, Chuck Mikkelsen.

This is my letter to Midwest Voices

This banker must have been absent during his class on not-for-profit organizations.  They all, including the U.S. government use trust funds.  The Social Security trust fund holds treasury bonds that earn interest.  For the last two years, because of the recession and the payroll tax reduction for workers, money has been used from the trust fund that was supplemented from general revenues.  For that matter, the trust fund uses treasury notes all year long every year to pay benefits.  Surpluses, if there are any, are invested in long term Treasury bonds  in July.  This banker just wants to divert Social Security funds into private accounts which could be exhausted whereas Social Security benefits never run out.  Social Security should not be a big issue this year.  There are enough Treasury securities in the trust to last for at least another 25 years while paying full benefits. Raising the payroll cap could eliminate any chance that the trust fund would be exhausted. 

How many know that the federal government has 155 trust funds.  All hold U.S. Treasury bonds.  Why is it that Social Security is singled out for criticism?  In 2008, the Highway trust fund was exhausted.  The fuel tax has not been increased since 1993 and Bush was certainly not going to increase the tax.  So, money for the highway trust had to be transferred from the general fund; we all know that money was borrowed and added to the deficit.  Thank you, George W. Bush.

For those who do not understand, the trust fund uses actuaries to project the life of the trust fund.  Those actuaries take everything into account, including the number of workers who are paying into the fund. They make three estimates.  One estimate is optimistic, one is less so, and one is pessimistic.  The one that is reported to the public takes the middle ground and can be slightly   pessimistic.  So, in reality, Social Security will be solvent until 2037 or beyond.  Even if no changes are made to bring in more revenue, the trust fund can never go “bankrupt” because it has borrowed no funds to pay for its operations.  All revenues for Social Security are derived from payroll taxes.