Social Security, Simplified

Dick Armey, former Representative from Texas, chairman of Tea Party Express bankroller FreedomWorks, and dedicated corporate lobbyist, has said it. Rand Paul, who appears poised to replace Jim Bunning as a Senator from Kentucky, has said it (video, from Talking Points Memo, below). Ron Johnson, who has been reported to be leading incumbent Senator Russ Feingold in Wisconsin, now says it (video way below).

They've all characterized arguably the most popular government program in American history, Social Security, as a "Ponzi scheme." The eagerness to spread disinformation infects even the mainstream media. Matt Bai in The New York Times on August 26 claimed the only way the federal government can redeem the Treasury bills in the (dedicated) Social Security trust fund is "to issue mountains of new debt or to take the money from elsewhere in the federal budget, or perhaps impose significant tax increases." Appropriately exorcised with Bai, who ignorantly compared the system with the lottery, the Daily Howler's Bob Somerby explains

It’s true: The federal government has borrowed money from the Social Security trustees over the past 27 years. More specifically, it has borrowed the annual over-payment of taxes written into the system in the 1983 reforms authored by President Reagan. How were those (perfectly sensible) over-payments designed to work? Preparing for their future retirement, workers would pay more into the system each year than was required to pay the benefits of that year’s recipients. These over-payments would be borrowed by the federal government, thus reducing the amount of money the government had to borrow from other sources. These over-payments would be repaid to the trustees in future years, when retiring baby boomers began to place a stress on the system.

Boomers would pay extra money each year, then get paid back when they started retiring....

It’s true! To pay back the money it borrowed from the trustees, the federal government will have to “issue new debt, take the money from elsewhere in the federal budget, or perhaps impose tax increases.” That said, the government will basically “issue new debt”—it will simply borrow more money from somewhere else to pay the trustees back. But this is what the government always does when it pays back its many loans, whether to the Social Security trustees or to those big Chinese banks. Duh! The federal government runs big annual deficits; where do you think it gets the money to pay back the money it previously borrowed when such loans come due? The president doesn’t hike through the woods, hoping to find big sacks of lost money. To pay back its debts as they come due, the federal government borrows again! You may not like the fact that your government borrows money each year to fund its large deficits. But this is the way it repays its debts—all of them, to all its debtors.

Johnson, Paul, Joe Miller (Alaska), Sharron Angle (Nevada), Pat Toomey (Pennsylvania); these are only a few of the Republicans running for the U.S. Senate this year who have their eyes on Social Security funds, aiming to pleasure their Wall Street benefactors by privatizing the system or otherwise undermining it. It is a major reason there is no limit to how much a Congress dominated by hard-right ideologues may decimate the nation's socio-economic consensus.

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The Armey At CPAC

Understandably, this year's Conservative Political Action Conference produced some truly outrageous statements.

Young America's Foundation spokesman Jason Mattera compared the gathering to Woodstock, quipping "except that unlike the last gathering, our women are beautiful, we speak in complete sentences and our notion of freedom doesn’t consist of snorting cocaine, which is certainly one thing that separates us from Barack Obama.”

Speaking of Tiger Woods' wife, Tim Pawlenty joked "I've had enough. We should take a page out of her playbook and take a 9-iron and smash the window out of big government."

Introducing fanatically pro-corporate and anti-income tax crusader Grover Norquist, Human Events editor Jed Babbit stated "I'm just really, really glad it wasn't him identified as flying that plane into the I.R.S. building."

Dick Armey did not disappoint the attendees, declaring (first video below) of President Obama "You're intellectually shallow. You're a romantic. You're self-indulgent. You have no ability.... There's nothing so arrogant as a self-righteous income-redistributor."

It was the most offensive remark made by the former Texas congressman and current chairman of Freedom Works, of whom Chris Matthews said (remark at end of video, the second below) on Thursday "I like Dick Armey a lot." It rivaled in bad taste Armey's comment when he appeared (third video below) with Salon's Joan Walsh on Hardball, twice condescendingly telling her "give it a rest" and then blurting "I am so damned glad that you could never be my wife because I surely wouldn't have to listen to that prattle from you- every day."

But neither of those was as ridiculous as another comment (fourth video below) made by Armey at CPAC, wherein he referred to the U.S.A. as having "the greatest health care in the world," with, among other things, the "greatest accessibility.... and that which is in fact copied by the rest of the world."

No need, here, to go into the statistics demonstrating that our nation on health care spends more than twice as much per capita as any other developed nation with outcomes no better than most. Or that over 30 million individuals residing here legally lack health insurance. Or that no other nation is rushing around to mimic our heath care system. It has been explained and described by so many others.

The New York Times noted in an editorial printed yesterday that a Blue Cross Blue Shield plan in Michigan "settled" with regulators for a 22% rate increase after seeking a 56% increase. In California, Anthem Blue Cross, a subsidiary of Well point, has announced an average increase of 25% for persons in the individual market. Paul Krugman noted in his New York Times column yesterday

what WellPoint claims is that it has been forced to raise premiums because of “challenging economic times”: cash-strapped Californians have been dropping their policies or shifting into less-comprehensive plans. Those retaining coverage tend to be people with high current medical expenses. And the result, says the company, is a drastically worsening risk pool: in effect, a death spiral.

Krugman points out that "California's individual insurance market is already notable for its lack of regulation, certainly as compared with states like New York — yet the market is collapsing anyway." This makes a farce out of Armey's claim "the solution is not more government control, the solution is less government control."

Few Republicans these days are so bold, and absurd, as to claim there is not a serious health care problem in this nation. Still, no Republican, and few members of the mainstream media, will stand up to denounce Armey's ridicule of a "crisis in health care" as "a notion you're (Obama) getting away with peddling."

Democrats should be assigned some responsibility, after a year of health care debate, for not having so demolished the self-interested complacency of individuals who spread such myths. Nonetheless, the primary blame needs to be assigned to Dick Armey and others acting out of self-interest who refuse to address, and only obsure, our health care crisis.