Tuesday, February 8, 2011

Fear Mongering and Scare Tactics Connect Social Security, China and the National Debt

Two articles in the current Monitor have me thinking about a connection between our current obsessions with China and the need to cut social security to reduce the national debt and deficit that I hadn’t seen before.

“China’s power shouldn’t be exaggerated. If you pick a global superpower, its still America. Measured in dollar value of output, the US economy is still more than twice the size of China’s. And since the US population is about one-quarter that of China, the typical person in China has a living standard far below US norms.” No doubt, China, India and Brazil are catching up, but we are in no danger of being overtaken soon.

We still have to do the right things, tho, and can’t rest on our laurels. We need to invest more in the future: better education and retraining of less-skilled workers, find energy alternatives to reduce our dependence on foreign oil, improve infrastructure, health care and support basic research. If we do these things, all of which the President proposed in his State of the Union Speech, we will maintain our place in the world.

So, we’re not as bad off as some leaders and politicians would have us believe. Why do they want us to be worried and afraid? What has this got to do with Social Security? Some facts about Social Security first.

It “remains the nation’s most effective antipoverty program. Without it, official poverty rates would rise from an already embarrassing [embarrassing for liberals and compassionate conservatives but a criminal shame for coddling the lazy for tea party and extreme right Republicans] 14.3%, to a horrendous 23.7%. Social Security administrative costs are about a tenth that of private insurance companies.

Benefits are low compared with other advanced countries with the US ranking 26th out of 30 among advanced countries. An average worker earning $43,000 in 2010 dollars will find that Social Security will replace only 37% of her income when she retires.” Yes there could be a shortfall in 2037, but “the best remedy, economists agree, would be a thriving economy that would automatically boost payroll taxes and, if needed, Social Security taxes could be boosted a bit.”

So who benefits from using China to scare us into cutting and even eliminating Social Security?

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