Mirage For Sale

May 19, 2005 

Every time the mainstream media poses partisan propaganda as idiotic pseudo-intellectualism, all that comes to mind is Dan Ackroyd’s line from the movie Spies Like Us..."We mock what we don't understand."  Or in the case of Katherine Stone’s recent piece of intellectual lint published in this past Sunday’s Washington Post, “Let’s mock the mocker”. 

Stone’s article, The Retirement You Weren't Banking On, is mundane liberal pabulum.  You guessed it, “the President is no good, the Republicans hate you, corporations are evil and, uh, well...I have no ideas myself”.  In the guise of an “expert”, Stone starts out as if she wanted to discuss the merits of a ruling by Judge Eugene R. Wedoff in the UAL Corporation BANKRUPTCY CASE # 02 B 48191.  But it didn’t take this law professor long to turn into a Social Security “expert” as well as a writer of fiction. 

One piece of UAL’s (United Airlines) plan to emerge from bankruptcy was to ask “the bankruptcy court for permission to hand over responsibility for its pension plans to the Pension Benefit Guarantee Corp. (PBGC), a quasi-public entity created by Congress in 1974.”  Judge Wedoff allowed UAL to do this.  And Stone was correct when she noted that “In sanctioning the pension termination, the court has left United's 134,000 active and retired employees with only a fraction of the retirement income they had expected.”   

But, any sense that Stone could have made in her article was quickly unraveled by her (and I say this mercifully) naïve contrasting of corporate pension plan insecurity to her perception that Social Security is...secure.  More to the point, under its present existence, Social Security is a greater Ponzi scheme (and less regulated from tampering) than any corporate pension plan.   

Stone believes that UAL’s pension plan went bad because “United, like many large corporations with surpluses in their pension plans, diverted some of the money earmarked for pension contributions to dividends, executive mega-salaries and general operations.”   

The last time I looked, the Federal government (a.k.a. legislative and executive branches of both Parties) had misappropriated ALL of your Social Security contributions for off-budget pork!  Adding to this insult, those same thieves had returned the favor of stealing your Social Security retirement savings by charging you interest to borrow your money for their political gain.  They will also cut your promised benefits and/or raise your taxes to pay you back YOUR money that they spent.  If you want a good primer on this theft, take a quick hop to Uncle-Scam.com

Stone notes that “Now, after five years of stock market decline, the pension fund has assets that fall short of its obligations by $9.8 billion.”  She must have missed the most dramatic recovery in stock market history from the Clinton recession achieved under the Bush administration. 

And speaking of “risky schemes”... the annual report from Social Security's Board of Trustees finds that “Social Security's net cash shortfall over the next 75 years totals $25.33 trillion in 2003 dollars.”  This, of course, is based on the assumption that Washington quits stealing your money and starts to save current Social Security surpluses today. If surpluses are not saved, you can add a couple of trillion to that estimate. 

In one of those great liberal cadences worthy of a “Bush lied, kids died” award, Stone reminds us that “Retirement should be about security, not risk”.  And then drives home her agenda with “Yet uncertainty has become the essence of our discussions about retirement, including the debate over Social Security”.  What keen insight. 

In a “one-eye-blind” sequence of panic-mongering paragraphs, Stone asks, “How can the PBGC take on all these expensive obligations?”  I guess her point is that since “it can’t”, the “security” of Social Security is even more important because corporate pensions just can’t be relied upon.  In fact, “According to Forbes, the PBGC currently faces a $23.3 billion gap between its assets and its liabilities.” 

Ergo...the illiquidity of PBGC means that “Eventually U.S. taxpayers are going to have to pay for the shortfall...the winners will be the corporations that created the crisis. They will be able to continue paying hefty executive compensation packages -- including handsome pension benefits -- while taxpayers and workers share the bill”.   

Consequently, Stone concludes that “without reliable pension plans, Social Security will become the only dependable firewall between dignity and destitution in our old age”.  In fact, she further states that “Maybe we could afford to ‘own’ our Social Security if we had our pensions guaranteed. But after rulings like the one last week, the ‘ownership society’ is one that most of us can't afford.” 

It’s a very convincing argument that this attorney who formerly worked for a law firm that represented the Socialist Workers Party makes...but it is a deceitful mirage. 

The “employer-funded” money that PBGC uses to insure corporate pensions is placed in a (you guessed it)...government trust fund just like the supposed Social Security Trust Fund.  And (guessed right again)...the PBGC Trust Fund is another source of off-budget dollars for spend-happy politicians.  Just like Social Security, the PBGC money goes directly into the Treasury and the supposedly insured workers get back useless “special obligation” Treasury bonds...plus a bill for interest.  The money is diverted to political shopping sprees. 

Until and unless taxpayers actually OWN their retirement dollars, politicians will keep spending them.  This is the same for the Social Security, the PBGC and nearly 150 other government controlled “trust funds”.  The taxpayer gets the bill today and the same bill tomorrow...plus interest.   

Under the present system of non-ownership, the winners are the politicians that continue to buy votes with your tax dollars “while taxpayers and workers share the bill”.  Social Security is as insecure as most corporate pension plans and more insecure than some.  The fact that Stone pretends not to understand this and the Washington Post prints political propaganda like her’s should, in Stone’s own words, “send shivers up your spine”.

 

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