R i g h t a r d i a: Huffington Post: Rightard Alan Simpson rages on Social security

Tuesday, May 10, 2011

Huffington Post: Rightard Alan Simpson rages on Social security

WASHINGTON -- Alan Simpson’s cold relationship with AARP is no secret. The former Republican Senator from Wyoming took it to a new level . At an event hosted by the Investment Company Institute, Simpson delighted the finance industry audience members by aiming a rude gesture at the leading lobby for senior citizens.

Financial and investment interests have long been supportive of Simpson’s broad critique of Social Security, since privatizing the old-age and disability support program would be a tremendous boon for Wall Street’s financial managers. ICI representsmutual funds and other money managers who control more than $13 trillion in assets.

Simpson’s called Social Security a "Ponzi" scheme, "not a retirement program.”

Simpson argued that Social Security was originally intended primarily as a welfare program. Simpson said:

It was never intended as a retirement program. It was set up in ‘37 and ‘38 to take care of people who were in distress -- ditch diggers, wage earners -- it was to give them 43 percent of the replacement rate of their wages. The [life expectancy] was 63. That’s why they set retirement age at 65” for Social Security.

Simpson is taking around some of the real issues. The FICA tax is regressive because of the $106,800 cap on Social Security earnings.

If this cap was eliminated, the tax burden on the middle class would be lifted and more of the burden placed on the Americans who have been making out like bandits since the Reagan era.

The other problem is that only 20 per cent of Americans retire with pensions so the corporations are not really providing their workers with any option to Social Security.

Many corporations are touting IRAs are corporate pension plans, but the IRA program was designed by Congress to be a savings plan. Many laid off workers discovered that one third of their IRA had been taken in managment fees after they lost their jobs.

Phil of Phil's Gang says the IRA program was developed in Congress for wealthy investors, not the average American.

Both the UK and Chile expermented with privatizing thier versions of Social Secuyrty with poor results. The government programs were restored but many poeple entering retirment saw their pensions cut in two by this social experiment.

The Republicans don't talk about the real solution which is increases in the FICA payroll tax and eliminating the Social Securty cap.

Social Security disability accounts for about 4 per cent of the program. Many of the disabled are blind an parlyzed, but this programs also covers aged legal imagrants to the US and tax scofflaws.

The FICA tax scofflas are folks like those gulf coast fisherman who have lived in the US all of their lives but have never or rarely paid FICA or Income Tax. The IRS estimates about 4 to 5 per cent of Americans are tax scofflaws.

Most of these people are Red Staters who did not have the wherewithall to pay FICA tax for 40 quarters or 10 years. Therefore, they are not eligible for standard Socail Security benefits, just the welfare version.

Rush Limbaugh doesn't mention these Red state "welfare kings."

Rightardia wonders who would take an ideologue like Alan Simpson seriously.