Social Security Works

Social Security stands for a simple proposition: no matter how life works out, whether prosperity or ruin, no one will be left penniless in old age or because of disability or being orphaned.  Read more at location 161

With only tweaks to adjust for demographic and economic changes, Social Security can remain financially sound so long as the United States of America endures. In this, Social Security is no different than our Constitution, which we amended twenty-seven times in the 203 years from when the Bill of Rights was adopted through 1992, when the rules on congressional pay raises were clarified.  Read more at location 173

Today more than 44 million retirees, spouses, and their survivors collect a monthly benefit. For another 9 million workers disabled by injury, illness, or violent crime, the same protection is provided. Then there are children whose father is killed in an accident, whose mother is felled by sickness, whose parents are murdered. Because of Social Security’s orphan benefits, the heartless gods of chance do not ruin their future prospects.  Read more at location 180

In hard times Social Security’s steady, reliable flow of funds to those who earned their benefits, and to their dependents, cushions a general economic collapse. The monthly checks that more than 58 million Americans collected in 2014 kept the beneficiaries clothed, fed, and sheltered. And spending that money also kept others working. But for these leveling effects as Social Security payments are spent, many millions more would have lost their jobs and their homes, adding to the burdens taxpayers endured during the Great Recession and the much too slow recovery from it. Many more small businesses would have failed but for sales to people who received Social Security checks every month.  Read more at location 190

Social Security also prevents America’s child poverty rate, by far the worst among modern industrialized countries, from worsening. Among America’s 74 million children under age eighteen, more than one in ten live in a household where they or someone else collects Social Security benefits. Social Security lifts more than a million children out of poverty, recent annual reports by the Social Security trustees show.  Read more at location 200

Among older Americans poverty was endemic from the founding of the country through the Great Depression. Starvation and ill health from not having enough to stay safe and warm in old age worked together as advance agents for the Grim Reaper, bringing millions to premature and often ugly deaths. No more, thanks to Social Security.  Read more at location 203

In our time, thanks to Social Security and the increases in benefits adopted by Congresses under both parties over the past seven decades, only one in eleven older Americans remains mired in poverty. Take Social Security benefits away, though, and every other older American would be in poverty. Among black Americans the poverty rate would triple.  Read more at location 206

Before the Social Security Act of 1935, life in the United States was perilous. Economic self-sufficiency depended on being healthy and young enough to work. The prospect of a disabling injury or sickness hung over all but the rich like a modern sword of Damocles. One industrial or automobile accident, one fire, one errant bullet from a bank robber or a drunk could ruin a whole family. Such events were the equivalent of clipping the single horsehair that kept a sword from falling point first into the head of the citizen who an ancient Syrian king let sit on his throne to enjoy the experience while also appreciating the dangers and risks.  Read more at location 250

This institution undergirds the economic security of virtually every American. And it gives expression to the American people’s best instincts—caring for our parents, children, and neighbors; working hard and contributing; engaging in self-help and mutual aid; respecting the dignity of each person; managing resources conservatively and prudently; and understanding that together we stand stronger. Old-fashioned ideas, perhaps, but still valuable, and fundamental to advancing strong families, communities, and our nation.  Read more at location 314

Note: Great articulation of Social Security

The fight for Social Security has been part of a larger struggle over worker security. It is also part of the ongoing struggle between those who view poor Americans, even those who have worked for their entire adult lives, as undeserving, versus those who understand that each of us deserves to be treated with dignity, especially when unemployment, health problems, old age, or other circumstances undermine our ability to support ourselves and our families. At base, it is a struggle over the role of government in improving our lives. And it is a struggle about our responsibilities to our families, neighbors, and selves.  Read more at location 323

Older workers were particularly vulnerable. When older workers lost employment, they could seldom find new work. Indeed, want ads often plainly stated that the old need not apply. Older people, no matter how frugal, generally had insufficient savings to last until death. Those unable to work routinely moved in with their children. Those who had no children, or whose children were unable or unwilling to support them, often wound up in the poorhouse. The poorhouse was not some Dickensian invention; it was an all-too-real last resort for the desperate and destitute old. The vast majority of the residents were elderly. Most of the “inmates,” as they were often called, entered the poorhouse late in life, having been independent wage earners until that point. Fear of the poorhouse was always lurking in the background, haunting people as they aged.  Read more at location 332

The Social Security Amendments of 1939 addressed the economic insecurity that the death of a working parent could leave children and spouses without a steady income. Before Social Security, it was not unusual for widows and widowers to give up their children simply because they no longer could support them financially. For example, in 1914, an estimated 2,716 children lived in New York State’s orphanages, mainly because their widowed mothers could not support them.11 But, thanks to Social Security, beginning in 1940, surviving wives of deceased workers with young children became eligible to receive benefits, protections that were extended to widowers in 1950.12 Parents struggling to maintain their children after the death of a working spouse now have income they can count on.  Read more at location 403

In 1973, Egypt and Syria attacked Israel. The Organization of Petroleum Exporting Countries (OPEC) announced that its members would ship no oil to the United States or any other country supporting Israel in the war, and would quadruple the price of oil worldwide. Lines at gas stations around the country grew long, sometimes snaking for miles, and prices of everyday goods skyrocketed. The price of food jumped 20 percent.17 Inflation overall climbed steadily and rapidly, to 11 percent in 1974.18 Mean-while, unemployment rates soared. By 1975, unemployment reached 8.5 percent,19 the highest since before World War II.  Read more at location 451

Note: Just have this ready in case they want to pin it on politics or Carter or something. They blame Carter for the inflation but it started in b 73.

Never before had the nation experienced simultaneously double-digit inflation, sluggish wage growth, and high unemployment brought on by the shock of the OPEC oil embargo.  Read more at location 460

Note: Useful for Keynesianism.

Today, eight decades after its enactment, Social Security is so fundamental to the well-being of the nation’s families that it is almost impossible to imagine its absence. It is the nation’s largest children’s program, providing support directly or indirectly to nearly 11 percent of the nation’s children,25 as well as insuring almost all of the nation’s children against lost income in the event of disability, death, or old age of a working parent.26 It is the nation’s largest disability program, providing support to nearly 11 million permanently and seriously disabled workers and their families, while insuring the wages of nearly all workers and their families in the event of their loss as the result of serious and permanent disability.  Read more at location 490

And as half or more of the income of almost two out of three senior beneficiary households,28 and more than seven out of ten disabled beneficiaries,29 Social Security provides the nation’s foundation for what should be a secure and dignified retirement after a lifetime of work.  Read more at location 497

The word, which started as a neutral budget term and as a description of programs where the right to a benefit is established under the law, has a subtle pejorative undertone to it as well. Sounding like a government handout to those who consider themselves entitled, and insinuating that Social Security and Medicare benefits are not earned compensation, the word serves to undermine the dignity of people receiving benefits from these programs.  Read more at location 534

Note: “Entitlement “

If a 30-year-old worker who is married with two young children and who earns around $30,000 a year were to die, Social Security would provide the surviving family the equivalent of roughly $550,000 in life insurance. If that same 30-year-old did not die but became so seriously and permanently disabled that he or she could never work again, Social Security would provide benefits equivalent to disability insurance with a face value of about $580,000.  Read more at location 602

Reflect on some of the people you know, on family members who live in dignity in old age because they can count on a monthly Social Security check that they or another family member earned. Older persons—maybe you, your mother, father, grandmother, grandfather, aunt, or uncle—who outlived modest savings, or possibly never had much to begin with, continue to live independently thanks to Social Security. Think of friends whose family relied on Social Security to pay the bills when a working parent died or was seriously disabled.  Read more at location 608

Consider that by providing an orderly way for individuals to contribute during working years, in exchange for financial protections against premature death, disability, and old age, Social Security takes some of the tension out of family life and reinforces the independence and dignity of many. Knowing that one’s parents have Social Security often frees up the generation in the middle to direct more family resources toward their own children.  Read more at location 612

Retirement savings are, at best, poor substitutes for wage insurance. Most workers in this country find that they have insufficient savings for even short-term needs. But even if a worker was willing and able to sacrifice current consumption in order to maintain his or her standard of living in retirement, he or she would confront unanswerable questions: How much savings is enough? How much is too little? How much is more than necessary? If too little is saved, one risks destitution if wages are lost. Even if complete destitution is avoided, saving too little may force people to sell their homes, move from their neighborhoods, and cut all expenses drastically. If too much is saved, one needlessly reduces one’s standard of living decades in advance of the contingent event, which may never occur.  Read more at location 640

Note: Fundamental rebuttle to the most common objection.

Workers who, over their working lives, want to save the amount needed to replace their pre-retirement wages each and every year until their deaths would have the impossible task of trying to predict all sorts of eventualities that actuaries know for groups, but that no one can know for an individual. Those worker-savers would have to know in their late teens or 20s, at the start of their working lives, what their wages will be at the time of their retirement, at what age they will retire and whether they will have worked and saved every year until that retirement date, or whether they will have had periods of no wages or even periods of dissaving for more immediate expenses, such as child care, medical costs, and other necessities. They would also have to know their rate of spending in retirement. Extensive medical costs or the need for long-term care can result in the rapid drawdown of savings.  Read more at location 646

Such uncertainties—easily estimated for groups, but impossible to determine for individuals—require an insurance solution, not savings. Wage insurance such as Social Security, where the benefit is explicitly designed to replace wages, is precisely geared to this goal and, in the case of Social Security, provides protection in the event of death or disability before reaching retirement. Wage insurance, not savings, is the most effective way to protect workers and their families when wages are lost as a result of disability, death, or old age. Savings are fine as a supplement—for those who are able to save—but not as a substitute.  Read more at location 656

Where welfare programs seek to relieve extreme financial problems and require that participants be poor, Social Security, in addition to helping to maintain the standard of living of its beneficiaries, prevents extreme financial distress in the first place. Built on the principle of universal coverage, it provides a social means of pooling risks. In exchange for making relatively modest work-related contributions over many years, this wage insurance provides individuals and their families with a floor of protection against predictable risks.  Read more at location 662

Social Security’s wage insurance includes a number of valuable features that are not found in the private sector. For example, private sector annuities and defined benefit pensions reduce the monthly annuity amount of the primary insured or worker if a spouse is added. In contrast, Social Security’s annuities provide add-on benefits for spouses, without reducing by a penny the worker’s own benefit.  Read more at location 711

Unlike private insurance companies or employers, the federal government will never go out of business. Moreover, it has the power to tax. Legislative oversight, annual reports by program officials, and reviews by actuaries and independent panels of experts provide an early warning system for financing imbalances that will arise from time to time. The authority and taxing power of government, as well as the self-interest of political leaders and the public to protect promised benefits, guarantee the continuity and financial integrity of Social Security.  Read more at location 724

Only the federal government can mandate coverage of all workers, and require participation as soon as they enter the workforce and begin to earn wages. Because the federal government is not competing for market share, there are no advertising costs, broker fees, or other marketing costs. Overhead is lower because it is administered by civil servants, not highly paid CEOs, and there is no money taken out for profits. Not surprisingly, Social Security’s administrative costs are far lower than private sector insurance and pensions. Less than a penny of every Social Security dollar collected and spent is used for administration.  Read more at location 735

Note: One of the great advantages of civil services is they do not need to charge for profit, they need no advertising department, and there is no incentive to deny.

Social Security is a trust based on broadly shared civic and religiously based principles: concern for our parents, for our neighbors, for our children and for the legacy we will leave those who follow. The program combines individual responsibility—benefits are based on individual work effort—with a deep understanding that our nation is strongest when we share both our prosperity and our risks.  Read more at location 751

The president’s secretary of labor, Frances Perkins, also understood this. She spoke of how America “evolved the ethical principle that it was not right or just that an honest and industrious [person] should live and die in misery.” “[T]he people are what matter to government,” she explained, and “a government should aim to give all the people under its jurisdiction the best possible life.”  Read more at location 758

Douglas Brown, an architect of the Social Security Act, put it another way. He spoke eloquently of an “implied covenant,” arising from a deeply embedded sense of mutual responsibility that “rests on the fundamental obligation of the government and citizens of one time and the government and citizens of another time to maintain a contributory social insurance system.”  Read more at location 768

Note: Taxes are a way not only for citizens to work together, but for generations to work together.

Social Security works for children. Social Security is the nation’s largest and, despite its modest benefits, most generous children’s program. Its protections are by far the most important life and disability safeguard available to virtually all of the nation’s 74 million children under age 18.  Read more at location 788

Because their average income tends to be lower, people of color benefit more from the way Social Security’s benefit formula provides a disproportionately  Read more at location 801

Note: It’s exactly the opposite of what Friedman said, the lower classes benifits more from SS.

Even more dramatic, Neil Friedman’s story, as reported in the Wall Street Journal, shows that Social Security is important for everyone, even the wealthiest Americans. Ponder how life can change in an instant. Neil Friedman saw virtually all of his life’s savings vanish on the morning of December 11, 2008, when investment adviser Bernie Madoff’s Ponzi scheme was revealed. Friedman had invested $4 million with Madoff, including his pension. He never had an inkling that Madoff’s investments were fraudulent until the day he learned that the money was gone. Now 79 and widowed, he relies completely on Social Security to get by, supplemented only by the meager income he earns selling notecards each Sunday at a flea market in Palm City, Florida.  Read more at location 875

Note: The rebuttle to Mitch Daniels argument the rich don’t need Social Security. Social Security is the one guaranteed investment waiting for you in retirement. The others, even the seemingly solid ones, are never guranteed. Sure, the Sociopaths will say you should have known madoff was going belly up or likely they will say you should have diversified. But all private accounts are subject to the same risks. The recession sank countless diversified portfolios.

The economic well-being of older Americans can be measured in a number of ways. One measure involves subsistence: whether or not people have enough income to purchase the bare necessities of life. Widely used for fifty years and adjusted annually for inflation, the Census Bureau’s official U.S. poverty index establishes poverty thresholds for households, adjusted for such factors as number of people, presence of children, rural/urban location, and age. Ironically, it sets a higher poverty line for adults under age 65 than for those over 65—$11,945 for individuals under age 65 compared to $11,011 for those over age 65 in 2012; $15,374 for couples under age 65; $13,878 for couples over 65.  Read more at location 885

Note: There you go Joe. There is your “poverty” you and your ilk don’t believe is real.

Responding to criticisms of the official poverty measure, the Census Bureau and the Bureau of Labor Statistics worked with other federal agencies to develop a new measure, the Supplemental Poverty Measure, first used in Bureau reports in 2011.10 The new index, which is not used for official purposes, but is instructive, is a much more refined measure, incorporating items left out of the official measure—including out-of-pocket health expenses, work expenses, child care, the value of noncash benefits such as housing assistance, taxes paid, tax crs, housing type, and geographic differences in the cost of housing. Under this more refined measure, the poverty rates of the old jump from 9 percent to 15 percent in 2011.  Read more at location 896

Note: This is a rebuttle to those who say more people are in poverty under Obama than Bush or previous to Obama, the definition of poverty has been changed to include more people. Millions more went to sleep not in poverty and woke up impoverished without losing a cent, as a result only of definition or moving the goalposts. But it’s instructive in that it tells us more people need help than even previously thought.

In other words, nearly half are either already unable to meet some basic needs such as food, clothing, and shelter, or are one serious economic setback away from not being able to do so.  Read more at location 904

Note: Basic definition of poverty or being poor.

Another measure is not whether people can remain out of poverty—quite a low bar—but whether they can maintain their standards of living when wages are lost. Even if not in dire poverty, most people do not want to be forced to alter the way they have been living (e.g., put off necessary repairs or sell their homes). Consequently, financial planners and economists often measure income adequacy of the old based on the idea that the goal of retirement income planning for individuals should be to maintain their standard of living no matter how long they live.  Read more at location 919

Investments in the economy and social programs, along with hard work, have yielded greater economic security for today’s older adults. The poverty rates of persons age 65 and over dropped from 35.1 percent in 1959 to 9.1 percent in 2012, according to the official poverty measure.  Read more at location 939

And that is most seniors. Figure 3.4 underlines the importance of Social Security to the finances of older people. More than 75 percent of the income going to the bottom 60 percent of senior households—those with less than $35,493 in income in 2012—comes from Social Security.  Read more at location 954

Women comprise 56 percent of Social Security beneficiaries age 62 and over, and almost 67 percent of beneficiaries age 85 and older. Single women age 65 and older received 50.4 percent of their income from Social Security, compared to 35.9 percent for elderly single men and 32 percent for elderly couples.22 Without Social Security, the poverty rate among older women, according to the official poverty measure, would increase from the current 11 percent to 48 percent.  Read more at location 984

Note: So of your idea of freedom is plunging 48% of elderly women into poverty from 11% overnight, cut social security. How much more free would they tell you they were?

People of color: Similarly, Social Security is extremely important to African Americans, Hispanics, and other people of color. Disadvantaged minority populations are more likely to have lower lifetime earnings, due to a variety of factors, including lower educational attainment, employment discrimination, physically challenging employment, and higher rates of unemployment. They are also more likely to suffer disabilities. Social Security is designed to provide economic protection against these disadvantages. It especially benefits those who have lower lifetime earnings and longer periods of unemployment. Moreover, Social Security protects workers and their families economically against the risks of disability and premature death.27 Social Security is also particularly important to minority workers and their dependents because they have far lower rates of employer-provided retirement, life, and disability insurance coverage.  Read more at location 1004

In 2012, among beneficiary households with at least one person age 65 or over, Social Security provides at least 90 percent of the income for 46 percent of African Americans, 53 percent of Latinos, and 44 percent of Asians.29 Without Social Security, the poverty rate among African American seniors would triple, from 17 to 50 percent, and the poverty rate among Hispanic American seniors would rise from 19 to 50 percent.30 Because of their poorer health and more physically demanding jobs, these groups tend to rely more heavily on Social Security’s disability and survivor protections as well.  Read more at location 1012

Note: Truly be interesting to see how the Libertarian would frame cutting this as “freedom.”

No one who has worked hard throughout life and played by the rules should face poverty or fear of financial calamity in old age.  Read more at location 1057

Testifying before the United States Senate Special Committee on Aging, Joanne Femino Jacobsen, age 63, talked about why she cannot ever see herself retiring, even though she has worked her entire life—eighteen years with AT&T while earning a college degree at night, twelve years with Verizon until being laid off at age 52, and then learning a new trade leading to positions in real estate appraisal, sales, and training, and as a town tax assessor.4  Read more at location 1081

Note: Look at these examples, the next three or so. Is it all “their own fault” Chris? Are they all stupid. Bums? Worthless? User Tha as examples of people who worked as hard as they could, and the system wasn’t enough.

The fifty years following the enactment of the Social Security Act of 1935 ushered in what some, a bit too effusively, called the golden age of retirement in America. Rising wages, improving standards of living, Social Security, Medicare, Medicaid, home ownership, senior housing, congregate meals, Meals on Wheels, other federally funded social services, and employer-sponsored pensions meant that most Americans could count on at least a modicum of economic security in old age, leaving them free to choose to continue or discontinue work, pursue new interests, recreate, give to family and community, and live with their children or by themselves. Not that aging in America was without problems. Yet from 1935 until near the end of the century, things appeared to be moving in the right direction.  Read more at location 1107

Note: All thanks to government

Because the use of the phrase “full retirement age” lends to confusion, please, as you read, keep in mind that the important thing to understand about retirement age increases is that for every year that Social Security’s “full retirement age” is raised, benefits are cut by 6 to 7 percent.15 It does not matter when someone first claims benefits—at 62 or 70, or somewhere in between. The 1983 enactment, which gradually phases in a two-year increase in the full retirement age from age 65 to age 67, has already lowered benefits by around 6.5 percent. When fully phased in, the change will cut the benefits of those born in 1960 or later by around 13 percent.  Read more at location 1153

Traditional private-sector pensions, also called defined benefit plans, have been disappearing at a rapid rate.  Read more at location 1175

Even at their height, employer-sponsored defined benefit plans had serious shortcomings. Because they are voluntary arrangements, they have never covered more than about half the workforce. Because, even when available, they vary from employer to employer, they have never been portable—able to be carried from job to job. That has a number of disadvantages. Primary among them is their inadequacy for mobile workers, who might be entitled to benefits based only on the low pay earned at the start of their careers. In addition, private sector defined pension plans, which promise annuities not payable for decades, are inherently insecure. The plan may have insufficient funds when the time for payment arrives, and the employer sponsoring the plan may no longer be around.  Read more at location 1182

Rather than face up to real problems, it’s easier to scapegoat public employees—the first responders, teachers, sanitation and public health workers, community and state college employees, prison personnel, social and mental health service providers, and other civil servants.  Read more at location 1212

Note: Government doesn’t create jobs huh? What are these. And government is always waste huh? What about these?

But unlike defined benefit pensions, 401(k) plans are savings and not insurance. Consequently, employees bear the risk of sometimes volatile declines in the value of their savings, before and during retirement.  Read more at location 1223

Note: It’s not the same thing. They are less stable, more easily raided, susceptible to recessions, and not guranteed.

These arrangements have been spectacularly successful for the wealthiest few, but dismal failures for the vast majority of workers.  Read more at location 1231

This sounds fairly good; some would even say we have repaired the damage done to households. But this is not so. Most of the recovery came from the rebound of stocks, much more beneficial to the very well-off than to middle- and low-income households, and this measure does not account for inflation and population growth.32 When these are counted, the average American household lost 55 percent of its net worth between 2007 and the end of 2012.33 Younger households, more modest-income households, and people of color suffered the largest losses, especially as housing prices tumbled, unemployment increased, and homes were lost to foreclosure. The retirement prospects of working Americans are further diminished by rising student debt; loans taken by parents to help their children through college; continuing high levels of unemployment; little wage growth, except at the top; and cr card debt.  Read more at location 1259

Note: Really, how long can you keep this “it’s your own fault” shit up? When everyone is doing badly, when only the wealthiest see any gains, when college, the key to the door of competitiveness nearly insures bankruptcy, when everyone is struggling, how long is it “your own fault?” If someone in Somalia can’t buy a BMW is it “their own fault?” Or is there a point when the economy a person lives in simply doesn’t allow for all, if even many poeple to succeed? We are being offered less “choices” and a shrinking menu of good options.

With Social Security retirement benefits declining, with retirement savings schemes falling short for the vast majority of Americans, some are suggesting that working longer, much longer, is the solution to the retirement income crisis. If everyone could work until age 70, the Center for Retirement Research projects that roughly 85 percent of today’s workers would be adequately prepared for retirement.45 While there’s nothing wrong with working to 70, 80, 90, or even 100 if you want and are able, beware of political, corporate, and opinion leaders who are selling “brave new world” visions of longer work lives and retirement age benefit cuts as a solution to the retirement crisis. Often unwilling to step outside their privileged social and economic position, they are blissfully unaware, or just do not care, that their “solution” would do great harm to many of those whose life experiences are very different from theirs. They may live in the same city as Joanne Femino Jacobsen, age 63, but they either do not see her or do not care how different her story is from theirs: Location 1318

Note: Sociopaths don’t care

The Social Security Administration estimates that more than one in four 20-year-olds will be disabled before age 67.50 • Twenty to 30 percent of workers in their 60s have work-limiting health conditions. • One in five older Americans provides care to a family member, care that often compromises their ability to work or that would be compromised if they remained at work. • Forty-five percent of today’s older workers, ages 62 to 69, experience physically demanding or otherwise difficult work conditions. • Two out of five of today’s older workers end up retiring earlier than planned because of poor health, unemployment, caregiving, and the like.51 And this says nothing about employment discrimination, which though illegal, still occurs. Since the Great Recession, older workers have generally spent longer periods unemployed, and those lucky ones who found new jobs were on average employed at only 85 percent of what they made prior to losing their jobs. Location 1340

Note: So how is all of this their own fault? What is to be done?

Providing greater opportunity for Americans to work longer is desirable, as long as the possibility of such work is not used to justify cuts in Social Security’s modest benefits, and not used to impose a difficult and unfair set of expectations on older workers. Enforcement of age discrimination laws, flexible retirement, part-time work, retraining opportunities, second and third careers, small-business entrepreneurship, community service, and the like all have a place in our aging society. But the broad experiences of the American people need to be respected. While working longer may be a viable option for some, it is not for all. And even if many Americans worked longer, the crisis would not disappear. Expanding Social Security remains the single most effective, and the only widespread, solution to the retirement income crisis. Location 1364

Most likely, everything works out. But there is no guarantee. Your child could be among the one in thirty-three that the Centers for Disease Control and Prevention tells us will be born with a birth defect.1 Or among the one in five—11.2 million—children under age 18 with special health care needs.2 A severely disabling accident or illness could strike. No matter what, you’ll do what you must because you could not do otherwise. You are just made that way. But the time, angst, and financial costs will be great, possibly so much so that there is little left over for more normal activities of life. Location 1378

Note: So if poeple struggle paying their bills as a result of this “is it their own fault and they are worthless?” Chris? Is this a circumstance you should just have “planned ahead for and had enough money for?” Conservative thinking applies universal one dimensional solutions to complex and variable problems.

Another thought experiment: Your children are grown and doing well, but your mother, your father, your spouse, partner, or maybe a sibling just had a stroke and lost the ability to function without expensive in-home help. Again, as the 36 percent of adults who provide unpaid care to adults do, you’ll do what you must, perhaps providing demanding personal care for many years. Location 1383

Note: The examples of financial struggles outside or merely being lazy are countless.

Care—normal and extraordinary—given by family and friends is the stuff of everyday life in America. It’s what well-functioning, and even not-so-well-functioning, families do best. In its absence, children fail to thrive, community bonds fray, and generations—within families and society—cannot progress. Location 1387

Too many parents of young children are in a proverbial pressure cooker as they juggle work in the home, paid employment, child care, children’s schedules, and the rest of life. • Parents caring for children with serious disabilities are often overwhelmed providing special physical care, supporting their child, accessing special services, and caring for their other children. • Persons providing significant, ongoing care for family and friends experiencing major illness (e.g., HIV/AIDS, cancer) or whose disabilities severely limit their activities lose income, current and deferred, in the absence of paid leave. • The health of very old caregivers is put at risk because of the absence of respite and other supports as they care for their spouses, siblings, and others. • Older parents who have been caring many years for their developmentally disabled children, now middle-aged, often fear what will happen to their children once they themselves have died, because today it is not uncommon for such children to live into their 60s and 70s, or even longer. Location 1395

Note: Simply saying “it’s your own fault and you deserve it” is not just simplistic and shortsighted, it’s ignorant and frankly, reduces the person to basically a piece of shit.

Estimates of how many people give extraordinary care vary, but are always large. The Pew Research Center reports that 36 percent of all adults provide unpaid care to an adult needing assistance with normal activities of life. Eight percent provide care to children with significant health problems or disabilities.5 The National Alliance for Caregiving estimates that 65.7 million people provided unpaid care to functionally disabled children or adults in the course of 2009.6 In any given week of 2009, AARP’s Public Policy Institute reports that 42.1 million people age 18 or older provided an average of 18.4 hours of care to functionally disabled adults and that 61.6 million family caregivers provided such care at some point in 2009. Location 1414

Note: Same results as before, life is a struggle for various reasons outside of sloth and if you care about family values you care about helping.

Giving care has its rewards, but financial security is not one of them, for women or men. A MetLife study based on a sample representative of 10 million daughters and sons over age 50 caring for parents in 2008 presents stunning information about the aggregate loss in wage and retirement benefits: Total wage, Social Security, and private pension losses due to caregiving could range from $283,716 for men to $324,044 for women, or $303,880 on average for a typical caregiver. When this $303,880 amount is multiplied by the 9.7 million people age 50+ caring for their parents, the amount lost is $2,947,636,000,000, or nearly $3 trillion. Location 1554

But unlike almost every other industrial democracy, the United States federal government does not provide any protections against loss of income for those who must take leave. Among the thirty-four industrial democracies making up the Organisation for Economic Co-operation and Development, paid maternity leave averages about nineteen weeks; our federal government stands alone, providing none.37 Responding to the value of family leave, to both the economy and to society, we advocate in chapter 7 a modest and affordable way of expanding Social Security to provide insurance against wages lost by such leave, and we also propose a small benefit at the birth or adoption of a child. Location 1576

Note: If conservatives are right, we should be leading in all categories as a result of this. We are not. Rankings in all human health, happiness, growth, and indicators of success are a smattering of industrialized countries with various policies.

Additionally, most caregivers are employed and so represent a significant financial risk for employers. With caregivers of seniors reporting more health problems, a 2010 MetLife study estimates that the employer health insurance costs for such people is 8 percent higher than for other employees, translating into $13.4 billion in additional employer health care costs in the private sector.41 Caregiving by employees to adults ages 18 and over has been estimated to result in significant costs to employers from lost productivity—an estimated $33.6 billion in 2006. Location 1591

Note: This should be compelling evidence for republicans, since all they are about is business and employers making money. So hey guys here you go.

And there are many other aspects of life in the twenty-first century that condition the potential size of the caregiver pool— Location 1607

Note: A good way to articulate there are many variables in a metric

No matter who the leaders are, it will be all of us working together to strengthen our families and the institutions that support caring across generations. The time is right for caregiving to burst forth as a policy issue requiring serious attention. And, as it does, we believe Social Security will play an important part in addressing the nation’s emerging caregiving crisis, by adding financial supports for working families in ways that other nations do and by recognizing, supporting, and rewarding those who provide care—family, friends, domestic workers, and professionals—to the young, the old, and those in between. Location 1627

Governments—federal, state, and local—build public roads that assist in getting goods to market, establish courts that adjudicate contract disputes, fund police and fire services to protect property, and play countless other roles. Location 1685

Note: Quick and dirty

“cooperation between individuals has accounted for as much civilization as any personal struggle. Most of us have tried to give a certain security to those who are dependent upon us from the more serious aspect of the struggle for existence. . . . That is the purpose of civilization.” Location 1717

These various enactments paved the way for sustained prosperity and a strong belief in the value of government. The large industrial expansion during the World War II, together with these New Deal innovations and, later, the G.I. Bill of Rights and the growing size and influence of unions, sparked the twenty-five-year post-war economic expansion. Economic growth resulted in more opportunities for leisure (vacation, retirement, and education), higher standards of living, and strengthened health and employee pension protections, especially for unionized workers in both the private and public sectors. Location 1725

Writing to one of his brothers in 1956, president Dwight D. Eisenhower, a moderately conservative Republican, remarked on the strength of these understandings: “Should any political party attempt to abolish social security, unemployment insurance and eliminate labor laws and farm programs you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. . . . Their number is negligible and they are stupid.” Location 1743

Note: I don’t know if this is Level 10, but it is worth having on hand for any of the Libertarian ilk. Republicans do sometimes say good things and this is one of them. We also have the added value of pointing out that this is not biased, we agree with a Republican across party lines for this one.

A favorite target for cuts was means-tested welfare. Often drawing on pernicious gender and racial stereotypes, such as the so-called Welfare Queen, Reagan routinely vilified those who were dependent on those programs, implying that they were undeserving and lazy or, worse, outright crooks. Location 1802

The privatization of government functions enriches some corporations often while costing taxpayers.38 It has resulted in the upward redistribution of wealth indirectly as well by trading good-paying public sector jobs, protected by strong unions, for generally nonunionized jobs with fewer protections and less security.39 Cutting or, more radically, privatizing Social Security, would, like other efforts to shift functions from the public sector to the private, benefit powerful interests while drastically reducing the economic security of America’s families and intensifying the dangerously skewed distribution of income and wealth. Location 1832

Note: Rich off poor. A good example.

The economic lessons of the past were largely ignored: that active and large federal government investments are needed to jump-start a depressed economy, not laissez-faire economics and budget balancing. To help citizens help themselves when so many workers and families are negotiating the shoals of job loss and home foreclosures, large-scale government action is needed, not callous disregard and domestic budget cuts. Location 1867

Note: Saying “it’s your own fault” may feel good to the Sociopath but it is going to be of little help when the economy collapses around you

Moreover, despite the stereotype of Europe as a rigid, class-based, “old world,” today we have less upward mobility than much of Europe. Location 1880

Note: One way in which Europe is ahead of us, despite the mocking voices of the right that they are doing so poorly.

And these conditions have a serious and corrosive impact on our society at large. Rising inequality and declining upward mobility harm our economy. They have been linked to more frequent recessions.51 They also harm our stability and cohesion as a nation. And, perhaps most seriously, those twin conditions harm our very democracy. Location 1882

Note: Quick and dirty on inequality

Because Social Security and those earning its benefits have been hurt by income inequality, an expanded Social Security is a solution, helping to lessen that very inequality. Social Security does more to offset lost wages, income inequalities, and poverty than any other institution, public or private. Location 1904

Note: Which is why Republicans hate it so much. They hate people.

Increasing Social Security’s benefits can be done simply and quickly, with no start-up costs, no additional regulation, and virtually no additional administrative costs. It is very important to recognize that benefit improvements will, over time, be conveyed to all generations in the family and those to come. In fact, younger generations will reap greater benefits from an across-the-board increase than today’s old. That’s because, in raising the benefits of current beneficiaries, we also raise the benefits of those who will receive them in the future, and because today’s old will receive this benefit improvement for fewer years than tomorrow’s old. It will also lessen the squeeze on those who feel responsible to supplement the incomes of their aging parents while also assisting their own children and grandchildren. Moreover, increasing Social Security benefits will increase the benefits not just of retired workers but also of disabled workers, their families, and the families of deceased workers. This increase would occur automatically, without reference to specific groups, because Social Security’s benefits are primarily generated from the same formula. Location 1960

Note: To answer “why?”

Without accurate and timely inflation adjustments, retirees, people with serious and permanent disabilities and other beneficiaries would see their Social Security lose value as they age. The current inflation index under-measures how inflation eats away at the purchasing power of benefits. That’s because it is calculated for workers and the general public. But seniors and people with disabilities spend more on health care—where prices rise faster—and less on clothing, recreation, and other items—where prices tend to rise more slowly—than younger, healthier Americans. Location 1984

Note: Inflation is different for older Americans because they need things that are more expensive and rise in cost faster, Healthcare.

One of the values underlying Social Security is that workers who retire after a lifetime of work should not retire into poverty. Moreover, the architects of Social Security believed that workers who contributed to Social Security should receive benefits larger than they could receive simply by applying for means-tested welfare. Social Security provides benefits that, as chapter 2 explains, are disproportionately larger for those who have experienced lower wages over their careers. As a consequence, even an across-the-board percentage increase, as the All Generations Plan provides, helps these workers disproportionately. Location 2026

Note: Friedman tries to tell you SS is a raw deal for low wage earners especially, but this shows it not to be true.

Perhaps most importantly, taking away benefits from the wealthiest, who have nonetheless earned those benefits, would subtly but fundamentally undermine a widely popular program that has done more to eradicate poverty in this country than any other program. Our Social Security system is the nation’s most effective anti-poverty program. It lifts 22 million people—including more than 1 million children—out of poverty each year.10 But that is a byproduct of its central mission, which is to provide universal insurance against the loss of wages. Location 2066

Opponents of Social Security often express its long-range cost in trillions of dollars, because those numbers sound scarily large and unaffordable. But talking about trillions of dollars over decades is largely meaningless, because there is no perspective or frame of reference. In contrast, talking in terms of percent of GDP is much more understandable and meaningful. Percent of GDP provides not only a frame of reference, but human-scale numbers. Location 2224

So what will Social Security cost in the future? As figure 8.1 shows, the cost of Social Security as a percentage of GDP is close to a flat line for the next three-quarters of a century and beyond. Social Security currently accounts for a bit less than 5 percent of GDP. That percentage is projected to peak at 6.16 percent in 2035, when the youngest baby boomers, those born in 1964, reach their 71st birthdays, and then drop slightly, remaining below that peak of 6.16 percent for the the next fifty years and beyond. Location 2234

To put those percentages into perspective, in 2009, as figure 8.2 highlights, a number of other industrialized countries spent considerably higher percentages of their GDP on the part of their social security systems that provides old-age, disability, and survivor benefits.9 Moreover, they spend more today, as a percentage of GDP, than we will spend in 2035, when the entire baby boom will be over age 70. Indeed, we will even spend less at the end of the century than those nations spend today! Location 2239

Note: But the right aphid only have you believe those countries are failures and dystopian nightmares

Regardless of whether the stock market went up or down, Social Security benefits would remain guaranteed. Retirement income would continue to be based on earnings records, not stock market fluctuations. Unlike investments by individuals, investment by Social Security spreads the risk across the entire population over an unlimited time horizon. Diversifying Social Security’s portfolio would permit the benefit of higher market returns without individual risk. Location 2381

Having the wealthiest bear a greater burden of expenses for the common good is as American as apple pie, and for good reason. All of us benefit from public expenditures, but the wealthy benefit the most. Since they have the most property, they are arguably disproportionately advantaged by having police, military, court systems, fire departments, and other public services designed to protect us and our property. The accumulation of large estates is dependent, in part, on the general productivity of the American economy and its infrastructure—including, for example, roads, police, and education. Also, the very well-off benefited far more than others from large tax cuts, initiated during Ronald Reagan’s and George W. Bush’s presidencies. Location 2404

Note: Fantastic, and a great way to articulate am argument we have already piloted in the past but not said this well.

An estate tax implicitly recognizes that it is impossible to build a sizable estate solely on one’s own efforts, without roads, bridges, the protection of police and the military, and other goods and services provided by government. Requiring the very wealthiest Americans to contribute a portion of their fortune—on a one-time basis, only after death—to the common good, while still transferring more than half of their assets to heirs, seems a reasonable minimum to ask of those who have benefited so greatly from living in the United States.47 And dedicating those funds to Social Security makes perfect sense. Location 2429

Another progressive tax, also with a good policy impact, is a financial speculation tax, again dedicated to Social Security. Speculation in stocks, derivatives, and other financial instruments has no economic benefit. Indeed, irresponsible speculation and defaults on exotic financial instruments are what nearly brought our economy to its knees in 2008. Location 2434

If the United States increased the amount of the tax to equal what the United Kingdom assesses—just 0.5 percent on stock transfers—and imposed it on the sale and purchase of stocks, cr swaps, and other exotic financial instruments, it would fall mainly on large banks that engage in proprietary, speculative trading, and serve the public goal of reducing stock market speculation by large Wall Street banks. If the proceeds of the tax were dedicated to Social Security, the program would be so flush that not only would it be in surplus for the next seventy-five years and beyond, but benefits could be raised by about 5 percent across the board. Location 2445

Note: There are countless ways to increase funding for social security.

SUMMARY OF THE SOCIAL SECURITY WORKS ALL GENERATIONS PLAN To strengthen retirement security and address the retirement income crisis, the All Generations Plan would:

• Increase benefits for all current and future beneficiaries by 10 percent, up to a maximum increase of $150 a month.
• Ensure that benefits do not erode over time by enacting the more accurate Consumer Price Index for the Elderly (CPI-E).
• Provide a minimum benefit of 125 percent of poverty at full retirement age with thirty years of work. To strengthen family protections for all generations and to reinforce the caregiving functions of the family, the plan would:
• Provide up to twelve weeks of paid family leave upon the birth or adoption of a child or illness of a covered worker or family member. • Provide up to five years of Social Security benefit crs for caring for one or more children under age 6.
• Facilitate higher education by restoring student benefits for children up to age 22 in case of the death or disability of covered parents. • Provide a new child benefit of $1,000 upon the birth or adoption of a child.
• Enhance protections for the category of beneficiaries known as disabled adult children and for disabled widow(er)s. To secure Social Security’s financing for generations to come, the plan would:
• Gradually eliminate the maximum taxable wage base, giving cr for these contributions.
• Introduce a dedicated 10 percent marginal income tax on income more than $1 million.
• Gradually, over twenty years, increase the Social Security contribution rate by 1 percent on employees, matched by their employers.
• Diversify Social Security’s portfolio by investing 40 percent of its reserve in broad-based equity funds (phased in over fifteen years).
• Treat all salary reduction plans the same as 401(k) plans with respect to the definition of wages under Social Security.
• Combine the OASI Trust Fund with the DI Trust Fund. Location 2452

The revenue sources described in this chapter are just some of the dozens of revenue sources and variations that exist. With the exception of increasing the Social Security premium rate, which would cause virtually all workers to pay a modest amount more, these revenue sources would have no impact on the vast majority of American workers. None of them would impose an undue burden on anyone. Moreover, the existing refundable Earned Income Tax Cr, enacted in 1975, in part to offset the cost of Social Security contributions to low-income workers, could be expanded to soften or even eliminate the impact of those increased contributions on lower income workers. Location 2489

Note: Anyone calling for the elimination of social security on the grounds that it is too expensive or we can’t afford it is doing so on intransigen, dogmatic idealistic grounds and not pragmatic evidence bases grounds.

Pity the poor word “entitlement.” In less than a year, this eleven-letter term migrated from being perfectly respectable budget jargon—though boring, wonky, and technical—into the proverbial four-letter word, used to suggest that the benefits Americans had and were earning were less than deserved, and to obfuscate the goals of those who sought to radically diminish social protections. Location 2636

Note: Framing

The hypocrisy of Fix the Debt is remarkable. Fix the Debt claims to want to reduce the federal deficit, but nearly half of its board and steering committee members have ties to companies that lobby hard to preserve corporate tax breaks.62 Among its leadership are seventy-one CEOs heading publicly held companies. Fifty-four of them, according to a 2012 report, had personal savings in their firms’ retirement plans totaling $649 million, or an average of $12 million each—enough, if annuitized at age 65, to provide each of these CEOs with an average of $66,000 a month in retirement benefits.63 With $78 million in retirement savings, David Cote, the CEO of Honeywell and a member of the Bowles-Simpson fiscal commission, heads the list, as figure 9.1 reveals. (His little Honeywell “nest egg” has been reported more recently to be $134.5 million.)64 Cote is on the front lines of those calling for fiscal austerity and cuts to Social Security, Medicare, and Medicaid. Yet Honeywell’s own employee pension plan, the funding of which is presumably part of Cote’s responsibility, was running a $2.8 billion unfunded liability in 2012 while Cote was busy railing against the federal deficit. Location 2720

What figures 10.1 and 10.2 reveal is that the rising costs of Medicare and Medicaid are symptoms of our inefficient and overly expensive health care system, not causes. Indeed, Medicare’s per capita administrative costs are lower than those in the private sector—around 2 percent of program expenditures25 versus 11 to 17 percent in private plans26—despite covering seniors and people with disabilities, groups that, on average, need more medical care. Even more striking, Medicaid, which has the complicated administrative burden of means-testing those it covers, also has much lower administrative costs than private insurance—just 4.52 percent in 2012. Location 2939

If the United States had the same per capita health care cost as any other industrialized country, our nation would project long-term federal budget surpluses for the next seventy-five years and beyond. (The highly respected Center for Economic Policy Research has an online calculator that allows you to pick any of those other countries and see the effect on the U.S. budget.) Location 2947

Indeed, the emphasis on changing life expectancies by Social Security’s most vociferous opponents is simply their rationalization for cutting benefits. As chapter 4 explains, raising Social Security’s defined “retirement age” by a year is mathematically indistinguishable from about a 6 to 7 percent benefit cut in retirement benefits, whether one retires at age 62, 67, 70, or any age in between. It is easy to think that if the retirement age is increased and you work longer, you will catch up—and that sounds reasonable, but it is wrong. To really, deeply understand why, one must be thoroughly immersed in how benefits are calculated. Figure 10.4 presents a picture that is better, we hope, than the proverbial thousand words. As that figure shows, if the retirement age is increased, you always get less than you would have without the change. Cutting benefits when the nation confronts a retirement income crisis takes us in the wrong direction. We should be expanding benefits. Moreover, this manner of cutting benefits—by raising the statutory retirement age—is especially hard on low-wage workers—disproportionately, people of color—who are more likely to work in physically demanding jobs, as well as caregivers—disproportionately, women—who must retire early to care for aged parents or other family members, as we discuss in chapter 5. Finally, despite the existence of the Age Discrimination in Employment Act, older workers have a much harder time finding new work after being laid off. With no job prospects, they may find themselves with no choice but to claim permanently reduced early retirement benefits at age 62. Location 3042

We all look forward to the day when these disparities are behind us. We believe that the government should be investing aggressively to eliminate the causes of the disparities. But Social Security is neither the cause, nor is it unfair to African Americans. In addition to retirement benefits, the program also provides benefits in the event of disability or death. Because of their poorer health status, African Americans are more likely to become disabled or die prematurely than their white counterparts. While approximately 13 percent of the population is black, African American children constitute 23 percent of the children receiving Social Security survivor benefits,50 and African Americans represent 19 percent of those receiving disability insurance benefits.51 Moreover, Social Security’s benefits are progressively structured. Due to lower median earnings than the population as a whole, and higher rates of unemployment, on average, African Americans receive benefits that are proportionately higher, as a percentage of wages, than those with higher wages and fewer years of unemployment. Location 3104

Note: So much for Friedman’s argument

In magic acts, this is called misdirection—focusing attention on one thing over here in order to distract from the real action over there. Linking the fact that the federal government should do more for children and young adults to the fact that seniors are benefited by Social Security is classic misdirection. Location 3174

Note: Classic Red Herring, shift of point

No cut to Social Security should be viewed as trivial for the following reasons. Most seniors and people with disabilities live on fixed budgets, many with little or no discretionary income. What may appear to be just a tweak to those who are affluent is a serious blow to the standard of living for those who are not. Location 3213

Note: Just because it’s not a lot of money to you rich assholes doesn’t mean it’s not the difference between eating and starving to someone else.

Even worse, many of the stories use anecdotes, without national data, to give the impression that the rolls have been growing as a result of fraud. What fails to get reported is that all large insurance programs experience some level of fraud, and the levels of fraud under Social Security disability insurance are extremely low.27 Roughly 10 percent of the losses paid out by the property/casualty insurance industry are fraudulent, for example.28 In contrast, in 2012, less than 1 percent of all Social Security disability insurance payments were more than should have been paid, and fraudulent payments were only a fraction of that. Location 3377

Note: So go ahead and bitch about Social Security Fraud or welfare, but fraud is in everything, and is no more pervasive in the public sector programs than in private sector ones. They still serve their purpose.

Yet some have lost the sense that Social Security benefits are earned compensation, thanks to the use of words and phrases like “entitlement,” “makers versus takers,” and “safety net.” The language subtly implies that Social Security is a government handout, not insurance that we have earned and paid for. A safety net, after all, is something you fall into if you make a mistake on the high wire or trapeze. One is glad the safety net is there, but falling into it is to be avoided, if possible. Insurance, on the other hand, is what prudent people buy because they are aware of life’s risks and are planning ahead. People who are prudent do not need or want safety nets. It is why they purchase insurance (and accumulate savings). Location 3502

None of us deserves to be assaulted by language that diminishes our accomplishments and risks undermining our dignity. Location 3525

Note: Chris and Jared calling hard working poeple bums

Yet another value that underlies the fight over Social Security is compassion for our neighbors. After the tragic events of September 11, 2001, millions of Americans reached into their pockets to contribute to the Red Cross and other charitable organizations assisting the families of the 9/11 victims. What most Americans, to this day, do not know is that the most immediate, sustained, and generous support came from Social Security. Today, virtually all working Americans continue to contribute to those families every payday. The money withheld from every worker’s paycheck for Social Security goes into the program’s Old-Age and Survivors Insurance and Disability Insurance Trust Funds, out of which those victims’ families receive benefits. Virtually every child who lost a parent or whose parent was severely disabled as a result of the terrorist attack will receive a Social Security check every month until his or her late teens. Location 3527

It is time for the sleeping giant to awaken. Poll after poll shows that the overwhelming majority of Americans supports Social Security, opposes benefit cuts, and wants responsible benefit improvements. And we are, after all, a democracy, where the majority is supposed to rule. But we must make sure our voices are heard. We must get involved. Location 3599
Note: If you care about democracy, if you care about “freedom” and the ability for poeple to choose their conception of governance then you care to keep social security and other popular programs.

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