| Number 123 | August 31, 2001 |
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This Week:
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Greetings, More Social Security stuff this week, then I'm done for a while. The piece on Social Security disability is a condensation of a more substantial piece that will appear in the upcoming issue of Access Press newspaper. Pick up a copy if you know where to find one; far-away readers can e-mail or call the paper (access@mninter.net, or 651-644-2133) and ask to have a free copy sent to them. Welcome to all the new readers! You "old" readers seem to be sending along copies of the Notes to your friends and families, and some of them get inspired and sign up for their own subscriptions. Thanks. I hope Nygaard Notes is everything it's cracked up to be. Whatever that is. ‘Til next week, Nygaard |
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Behold the following, from a front-page article in the New York Times ("All the News That's Fit to Print") of August 18th, entitled "Iran Shifts War Against Drugs, Admitting It Has Huge Problem."
Can you believe that there is a country so backwards that it still puts addicts in jail? Oh, those wacky foreigners! |
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Last week I talked about something that I called "social forces" that shape the speech of our public figures. I mentioned in passing that these social forces "act upon us all." What did I mean? This week I send along a copy of an email the main point of which is that our elected officials are ripping us off shamelessly with a "something-for-nothing" pension scheme. Many readers seem to believe it when they receive it, or at least suspect that it might be true. Lots of Nygaard Notes readers have received it (I know because they have asked me about it). The question is, why does such unmitigated garbage find any audience at all? One reason, I think, is that it is difficult for good-hearted people to believe that someone (and someone who has their address, at that!) would so consciously and blatantly lie about such an important subject. Good-hearted people are like that, and I wouldn't have them any other way. But the more important point to consider is that the "social forces" I keep talking about (sometimes also called the "political climate," "dominant ideology," or "prevailing wisdom") makes some things easy for people to believe and some things difficult to believe. Perhaps this is what Bob Marley was referring to in his "Redemption Song" when he said, "Emancipate yourselves from mental slavery; none but ourselves can free our minds." Those same social forces have an effect on our ability to recognize blatant propaganda when we see it, as the case of the Social Security email illustrates. As another example, take Henry Kissinger. If you were to say in the United States that he is a major war criminal, you would likely be met with great skepticism by almost everyone. However, if you said the same thing in Chile, or in Cambodia, or in any number of other countries around the world, I'm guessing the response would be quite different. This is true, I suggest, because the social forces at work in those countries have conditioned people to hear the same information with different ears. Forces beyond our control—indeed, often outside of our awareness—are telling us constantly to believe some things that are false and not to believe other things that are true. We're not helpless victims, since we do have the capacity to "free our minds," but many of us are "victimized" in the sense that we are unaware of these forces, and thus don't even attempt to "free" ourselves from them. This is one of those points that seems almost self-evident to me, and yet when I actually say this sort of thing to people I know, it turns out to be quite controversial. That's why I am writing about it this week. |
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The contents of the following six paragraphs is the entire text of an email that started last year (as far as I can tell) and continues to make the rounds. It has been sent to me, in various versions, by quite a number of readers. Read it yourself, and then check out my response, which appears afterwards. The Bogus E-Mail "This is worth the read. It's short and to the point! "Perhaps we are asking the wrong questions in this election year. Our Senators/Congressmen do not pay into Social Security, and, therefore they do not collect from it. Social Security benefits were not suitable for them. They felt they should have a special plan. Many years ago they voted in their benefit plan. In more recent years, no congressperson has felt the need to change it. After all, it is a great plan. "For all practical purposes their plan works like this: When they retire no matter how long they have been in office, they continue to draw their same pay until they die, except it may be increased from time to time by the cost of living adjustments. For example, former Senator Bradley and his wife may be expected to draw $7,900,000.00 over an average life span, with Mrs. Bradley drawing $275,000.00 during the last year of her life. Their cost for this excellent plan is "0," nada, zilch. "This little perk they voted in for themselves is free to them. You and I pick up the tab for this plan. Retirement plan funds come directly from the General Funds. Our tax dollars at work! Social Security, which you and I pay into every payday for our own retirement, with an equal amount matched by our employer, we can expect to get an average of $1,000.00 per month. Or, we would have to collect our benefits for 68 years and 1 month to equal the Bradley's benefits. Imagine for a moment that you could structure a retirement plan so desirable, a retirement plan that worked so well, that Railroad Employees, Postal Workers, and others who were not in the plan would clamor to be included. "This is how good Social Security could be, if only one small change was made. That change would be to jerk the Golden Fleece Retirement Plan out from under the Senators/Congressmen. Put them into the Social Security plan with the rest of us. Watch how fast they fix it!!! If enough people receive this, maybe a seed will be planted, and maybe good changes will evolve. "How many people can YOU send this to?" Nygaard's Response Maybe you've received this email or something similar. There are 3 main points in it: 1) Senators do not pay into Social Security; 2) They have a "special plan;" and 3) They pay nothing for this plan. All of these claims are false. Here are some facts on the matter: First of all, all members of Congress actually are required to participate in Social Security, and have been since January 1st, 1984. They pay the same percentage in Social Security payroll taxes as everyone else. Prior to 1984, members of Congress and other federal employees were covered by a separate pension plan called the Civil Service Retirement System (CSRS). As with many workers in the private sector, members of Congress now have the option of getting, in addition to Social Security, a pension from CSRS. Since 1986, there is also a second optional plan available to any federal employee, including members of Congress, called the Federal Employees' Retirement System, or FERS. Like other pension plans (including Social Security) these two programs are funded by taxes on both the worker and the employer. As to the huge pensions members of Congress supposedly get for free, let me quote Patrick Purcell, Specialist in Social Legislation, Domestic Social Policy Division, at the Congressional Research Service:
To put these numbers in perspective, members of Congress earn salaries of $141,300 per year (as of the year 2000), so their annual pensions currently amount to 33 to 35 percent of the current salary. The average worker in the United States receives Social Security retirement benefits at a rate of 44 percent of their annual wage, and high-income workers (those who earn more than $48,751.70 per year, according to the Social Security Administration) receive SS benefits at a rate of 25 percent of their annual wages. So, members of Congress are doing better in terms of pensions than the average high-income retiree, but not as well as the average American worker receiving Social Security benefits, on a proportional basis. If you receive, or have received, an email like this one, you may want to ask the person who sent it to you where they got it. (If you find out, let Nygaard Notes know; I'd love to track this down.) And if you believed it when you got it, you may want to ask yourself why you lack the information to protect yourself from such a bunch of %#&**#. |
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Despite many people's perception that Social Security is simply a government-run retirement program, it is far more than that. Almost 15 percent of all Social Security recipients—some 6.7 million people—are collecting the program's disability benefits because they are themselves disabled or are the children of disabled workers. Social Security's disability coverage is the equivalent of a $203,000 policy in the private market. Such policies "are either unavailable in the private market or very expensive," according to a recent report published by The Century Foundation and the Economic Policy Institute. If we factor in survivors benefits, which are paid to dependents of a worker who dies or becomes disabled, we see that Social Security is both a large disability and a large life insurance program—about a third of total program expenditures pay for survivorship and disability benefits. The basic problem with the concept of individual accounts in regard to disability and survivors benefits was stated clearly in a 1999 report from the Leadership Council of Aging Organizations, which said, "Today, workers who become disabled or die can rely on Social Security for a basic income for themselves and/or their families. This is true even for younger workers who have not had many years to pay into the system. But if Social Security were replaced with a private accounts plan, workers who face death or disability would be forced to rely primarily on their own investments for income. If they are young and have not had sufficient time to accumulate funds in their personal accounts, they could be putting their families in serious jeopardy." (The Leadership Council points out that this problem "is a critical issue which has been largely ignored by proponents of privatization.") This obvious point is well understood by all who care, including the General Accounting Office (GAO), which released a report in January entitled "Social Security Reform: Potential Effects on SSA's Disability Programs and Beneficiaries." That report looked at five different proposals to "reform" Social Security, including four proposals that would include significant aspects of the "individual accounts" approach favored by President Bush. As the GAO researchers stated, "In our estimates, the income from the individual accounts [would not be] sufficient to compensate for the decline in the insurance benefits that disabled beneficiaries would receive." These were their findings despite the fact that, throughout their investigation, the GAO assumed an "optimal set of conditions for disabled beneficiaries." The risk of individual accounts lowering the value of disability benefits would fall hardest on those with low incomes, for two reasons. First of all, the current system redistributes income from the richer to the poorer by use of a formula which replaces a higher percentage of lost wages for low-income workers than for high income workers. This redistributive effect would be completely lost with individual accounts. Secondly, low-income workers would have less money in each paycheck than high-income workers so, logically, they would have less money to take out and put into their private accounts. This would affect disabled workers disproportionately since, as the Social Security Administration (SSA) points out, "The overall poverty rate for disabled workers is much higher than that for others aged 18-64." The cutting of disability and survivors benefits is a logical and inevitable result of "privatizing" Social Security. By setting up a system that produces "winners" and "losers," for reasons that have nothing to do with need, the President's Commission to Strengthen Social Security has accepted a charge to begin to replace "Social Security" with a new system that is neither social nor secure. And the first to be sacrificed at the altar of Free Markets will be women, children, racial minorities, and people with disabilities. |