Fallbrook seniors not deceived by Social Security hype

At a recent club meeting in Fallbrook, a show of hands of who has a family member drawing Social Security produced a startling response: almost every hand went up. I’ve discovered, also, that Fallbrook seniors are remarkably informed on the facts. We know there is no crisis in Social Security. There is a fiscal crisis in government at all levels, however, but this is a different problem and a frightening one at that.

The Bush administration, realizing that the notion of privatized investment accounts has fallen with a thud, is now touting a new, obtuse scheme called “price indexing.” It is not readily understood by the public. This is probably why such a plan is so attractive to Bush lobbyists.

The bottom line is, using the price index would greatly reduce SS benefits, generating more poverty for the elderly. The cuts would be drastic: “An individual who works at average wages throughout his career and retires in 2075 would receive monthly SS benefits 46 percent lower than under the current structure,” calculates the Center on Budget and Policy Priorities. If SS benefits had been indexed to prices starting in 1951, today’s average benefit would be about $7,950 instead of $14,700. How many of our Fallbrook seniors would be thrown into the “poor house” if they had to take a cut of $6,750 a year?

Of course, such drastic cuts would solve the “money problem” for all time. It just does not solve the poverty problem, the very reason Social Security was created. Our purpose here is to create a healthy society, not a second-world society in America. Is the cornucopia of great Republican ideas now depleted?

Currently benefits are based on the wage index, which generates higher benefits than the price index because the wage index rises a little faster. But why should benefits be based on prices rather than wages, when the employee’s deductions all his working life were based on wages?

The wage index is based on concrete figures. The price index, on the other hand, is subject to tinkering, massaging and adjustments. Readers may not be aware of adjustments like the “Boskin scam,” invented to adjust the prices index up or down for “quality” or “equivalence.” This is the theory that if ordinary fresh food is up 100 percent but canned cabbage is cheap, the price index can be lowered by substituting cabbage (or dog food). (Michael Boskin was chairman of the Presidents Council of Economic Advisers for Bush Sr.)

The top one percent of the US population now owns about a third of the wealth. The top five percent is capturing an increasingly larger portion of the pie. The middle class is disappearing. Economic journalist David Cay Johnston maintains this is a result of legislation carefully crafted by lobbyists for corporations and the super-rich over the last 25 years. Increasingly more of our nation’s wealth is being sucked into the top five percent bracket, where it is protected from taxes. This is the real source of the Social Security and budgetary problems.