Could a Strong Union Movement Save Social Security?

Pear, Robert. 2012. “Social Security’s Financial Health Worsens.” New York Times (24 April): p. A 13.
http://www.nytimes.com/2012/04/24/us/politics/financial-outlook-dims-for-social-security.html?hp

“The Obama administration reported a significant deterioration in the financial outlook for Social Security on Monday, while stating that the financial condition of Medicare was stable but still unsustainable.”

“The Social Security trust fund will be exhausted in 2033, three years sooner than projected last year, the administration said.”

“In explaining changes in their Social Security projections, the trustees cited slower growth in average earnings of workers and the persistence of unemployment in the slow recovery from the recession. They lowered their projection of average real earnings in the future, primarily because of a surge in energy prices and “slower assumed growth in average hours worked per week after the economy has recovered.”
Let’s see if we can get this straight. For 40 years wages have gotten hammered by the “job creators”. People become increasingly reliant on Social Security, but the system is in trouble because people do not earn enough to get enough taxes taken away to cover social security. The obvious answer is to destroy social security.

4 comments so far

  1. mark hansen on

    with the great increases in “productivity” read automation,
    the # of workers decreases and the amount they are paid is a smaller percentage of the cost of production.
    capital costs go up, labor costs go down.

    my own solution would be a gross receipts tax on all corporations doing business in the usa to cover the cost of social security and medicare
    we could then drop the regressive social security and medicare taxes.
    for both workers and capital..
    we could even make the tax in inverse proportion to the # of u.s. employees per $gross.
    that way the highly automated would pay a fairer share.

    workers would be expected to create their own retirement accounts if they wanted more than social security and medicare provided.

    everyone who reached retiement age would get the same amount of money from social security regardless of how much they earned or how much they worked.

    i think something like 5% over an agreed upon poverty line would be about right.

  2. Mick Serra on

    Fight Fight Fight for social security. Don’t give up the fight for the Employee
    Free Choice Act in the states and at the Federal level. Create new strategies
    to dismantle the immoral corrupt unjust power of the American Corporate State

  3. mark hansen on

    personally, i think repeal of the taft-hartely act would be a good place to start.

  4. Using current accounting methods for Social Security, there is a rather simple solution. Simply increase the yield on Trust Fund bonds (probably far less than a single percentage point), and the system is flush. Where to get the money from? Same place the current money comes from … It’s made from thin air. (It’s not like this money was ever actually invested, you know, so there’s no ROI from which that interest is being drawn.)

    HOWEVER … The reality is that current accounting methods are nonsense. From a purely Constitutional perspective, it doesn’t matter what is or isn’t in the fund, or for that matter, if the fund exists or not at all. All that matters is what Congress authorizes as payments. If the fund is flat broke and Congress says double the payments, the payments double. (Solvency is never an issue in a fiat currency.) On the other hand, if the fund has a gadzillion bucks in it and Congress says cut the paments in half, the payments are cut in half.

    In short, it’s not and has never been an issue of funding. It’s always been an issue of willpower. Does Congress have the willpower to make the payments? Which brings me to the topic at hand: Could a Strong Union Movement Save Social Security? In other words, could a strong union movement provide that willpower?

    Well, you’ll have to tell me where that movement is supposed to come from. If folks haven’t noticed, Richard Trumka just gave Obama the highest-profile union endorsement in the US, and did so without even extracting a single promise from the President for favorable actions toward unions during the second term. This, to a President who has ALREADY explicitly offered up Social Security to the chopping block. This, to a DNC that has yet to toss a single dime at the recall of the highest-profile union-busting governor in the US.

    Could a strong union movement provide that willpower? Sure, but it ain’t happening.


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