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The DSM Register Independence Day Weekend “Progressive Trifecta” (3rd of 3) “Keep Social Security Safe”

[1]The Des Moines Register’s Opinion Section on Sunday, July 3, 2011 featured a “Progressives Trifecta” of half-truths and sophistry:

Richard Doak – What if the founders were around today?

Donald Kaul – My favorite 4th of July speech

Dean Baker – Keep Social Security safe from politicians who want to save it

This week I will focus my comments on Dean Baker’s article sub-titled “Real patriotism requires coming to terms with the grimmer side of American history”. Mr. Baker is co-director for the Center for Economic Policy Research (CEPR). The CEPR home page lists 10 funders, mostly far left organizations including the Open Society Foundations, which was founded by and led by George Soros.

Dean Baker-He advises the reader that two thirds of people age 65 rely on Social Security for more than half their income. He notes that “with traditional pensions disappearing and many near retirees losing much or all of the equity in their home, and also seeing 401(k) assets plummet”, hence “the next generation is likely to be even more dependent on Social Security”. He then proceeds to explain “Fortunately the program (Social Security) is fundamentally solid”. He goes on to summarize various facts about the trust fund and speculates about various ways to further improve the long term health of the program. He says “Many opponents of Social Security insist that its $2.6 trillion trust fund does not exist or that it is “just sheets of paper”. He acknowledges that “the trust fund is held in the form of U.S. government bonds, which are indeed sheets of paper. However, investors everywhere eagerly seek out these ‘sheets of paper’ as the safest asset in the world”.

  • Planning to Retire by Emily Brandon[2] [3].
  • 401K Balances Moving Back to Pre-recession levels by David Pitt[3] [5]
    • Americans who were afraid to open their 401(k) statements during the recession are finding good news inside the envelope now: For the most part, their accounts have come all the way back and then some.
    • Nine in 10 of the popular retirement plans are at least back to where they were in October 2007, the peak of the stock market. Since the bull market began in March 2009, stocks have almost doubled.
    • And many investors who kept their nerve and continued putting some of their paycheck into a 401(k) during the market’s worst months are now ahead.
  • My main issue with Mr. Baker is his insistence that the Social Security Trust Fund is secure. The current crisis over the debt ceiling now exposes that lie completely. President Obama has admitted that checks may not be issued if the U.S. Treasury cannot continue to borrow next month. If the Social Security Trust Fund held real assets, rather than government paper, they could sell those assets and pay benefits independently from the General Fund. As noted above, long term investments in real estate, stocks, bonds, commodities (gold), etc. have real value. Unfortunately all we have is paper made worthless by closet socialists like Tom Harkin and Barack Obama. I wish this were not true. I have paid into these programs at maximum levels for most of my working career. Privatize Social Security? Absolutely. Young people should demand it. The Ponzi scheme is over!

    I refer you to the following article, The Fraud of the Social Security ‘Trust Fund’ Exposed by a Most Unlikely Source by Don Boudreaux on July 16, 2011[4] [6]

    If Americans choose to accept the misinformation of socialists like Mr. Baker as fact, then they deserve the government and fate that they choose. The Republicans have proposed a plan and until President Obama does likewise, they should be applauded for at least recognizing the problems. Mr. Baker knows better. He is simply a socialist who hopes to use the budget crisis to tax the private sector out of business, redistribute an ever shrinking American economic pie, and secure power for global elites like George Soros.


    [1] [7] http://www.census.gov/const/uspriceann.pdf [8]

    [2] [9] U.S. News and World Report, January 12, 2010

    [3] [10] The Huffington Post, March 21, 2011

    [4] [11] http://cafehayek.com/2011/07/the-fraud-of-the-social-security-trust-fund-exposed-by-a-most-unlikely-source.html

    Photo: Gino Santa Maria [12] – Fotolia.com