July 22, 2008

IMPEACH BUSH

IMPEACH CHENEY

HEALTH CARE COSTS ARE PROBLEM, NOT SOCIAL SECURITY

A few months ago I had an "interview" with a guy representing the World Financial Group. They sell investment plans that are supposed to give you a good retirement fund. Somewhere along the way, of course, there was an attack on Social Security. According to the propaganda, we of the Baby Boom generation will bankrupt Social Security, or put an insufferable burden on younger workers who pay into the system. When you examine all the data you see that the claims are nonsense. Social Security is one of the best programs ever devised by the federal government and the only source of survival for many people. This article by economist Dean Baker looks at a right-wing ideologue named Peter Peterson who would like to destroy Social Security. The article is at www.commondreams.org:

Peterson has not been shy about using slippery logic to advance his agenda. For example, back in the 90’s he argued for cutting the annual cost-of-living adjustment for Social Security, which is tied to the consumer price index (CPI), based on the claim that the CPI substantially overstates the true rate of inflation. If Peterson’s claim about a CPI overstatement were true, then it would imply that incomes are rising far more rapidly than our projections show. Peterson’s CPI adjustment would mean that our children and grandchildren will be far richer than we could possibly imagine, because incomes are rising so rapidly. Similarly, the retirees for whom he wanted to cut benefits actually spent much of their lives in poverty. If incomes have been rising more rapidly than the official data show, then we must have been far poorer in the past than the data show.

In the same vein, Peterson supported the partial privatization of Social Security, based on assumptions on stock returns that were inconsistent with the profit growth projections of the Social Security trustees, and the price-to-earnings ratios that existed in the stock market at the time. In the push to cut Social Security and Medicare, Peterson does not feel the need to be bound by the truths of logic and arithmetic.

There is a fundamental point on which Peterson is correct. The long-term budget projections do show a horror story of enormous deficits. But these projections are not driven by aging and overly generous retirement programs. They are driven by projections that our private health care system, which already costs twice as much per person as the average for other rich countries, will get ever more inefficient through time. If we never fix our health care system, then we will face an economic disaster, which will include serious budget problems, since half of our health care is paid for through government programs such as Medicare and Medicaid.

This reality would suggest the importance of reforming the health care system. Health care reform would mean confronting the insurance and pharmaceutical industries, as well as the doctors’ lobbies. These groups have serious power. That’s why Mr. Peterson prefers to stick with granny bashing.