Jump the Shark
Do you remember when your favorite television show took a fatal turn for the worst, when your beloved half hour of escapism tanked?
When did your favorite show jump the shark?
They all go south at some point, like when Hotlips and Hackeye Pierce of MASH 4077th had a love thing, or the bizarre Miami Vice aliens episode. Both ideas wrecked each show.
The term Jump the Shark? The saying comes from the Happy Days episode where Arthur Fonzerelli (The Fonz) jumped a tank of sharks on his motorcycle. What may have seemed like a good way to generate ratings became a pathetic display of creative idiocy. That moment for most, me included, is when the show, which was mostly about teenage angst and growing up in the 1950’s, flew the coup. The death of Happy Days is when the Fonz jumped the shark. It changed the direction and scope of the show and Happy Days lost it's audience forever.
Now the phrase, “Jump the Shark” illustrates the point where something that was once very successful goes very, very bad. I’m a little now older than the day that the Fonz jumped the shark. In fact, I don’t watch much television nor do I have a favorite television show anymore.
I’m more interested in politics now than in citcoms. And recently I ‘ve seen many politicians jump the shark too. So I thought that I’d ask the question, what is your favorite jump the shark moment in the political realm? For me, the most considerable jump the shark moment of late was just after President Bush won the 2004 election. He pushed for Social Security reform, and lost big. In my opinion that’s when President Bush lost his audience. He stepped on the third rail of politics and went down in flames. Here was a President who just won one of the closest elections in American history, a wartime President with a previous 90% approval rating. He had plenty of political capital. What does he do first? He tries to fix a made up problem based on his person ideology rather than constituent need and capsizes his administration.
He’s been sinking slowly ever since.
So what’s your jump the shark moment? Television or politics, it's your choice.
Do you remember when your favorite television show took a fatal turn for the worst, when your beloved half hour of escapism tanked?When did your favorite show jump the shark?
They all go south at some point, like when Hotlips and Hackeye Pierce of MASH 4077th had a love thing, or the bizarre Miami Vice aliens episode. Both ideas wrecked each show.
The term Jump the Shark? The saying comes from the Happy Days episode where Arthur Fonzerelli (The Fonz) jumped a tank of sharks on his motorcycle. What may have seemed like a good way to generate ratings became a pathetic display of creative idiocy. That moment for most, me included, is when the show, which was mostly about teenage angst and growing up in the 1950’s, flew the coup. The death of Happy Days is when the Fonz jumped the shark. It changed the direction and scope of the show and Happy Days lost it's audience forever.
Now the phrase, “Jump the Shark” illustrates the point where something that was once very successful goes very, very bad. I’m a little now older than the day that the Fonz jumped the shark. In fact, I don’t watch much television nor do I have a favorite television show anymore.
I’m more interested in politics now than in citcoms. And recently I ‘ve seen many politicians jump the shark too. So I thought that I’d ask the question, what is your favorite jump the shark moment in the political realm? For me, the most considerable jump the shark moment of late was just after President Bush won the 2004 election. He pushed for Social Security reform, and lost big. In my opinion that’s when President Bush lost his audience. He stepped on the third rail of politics and went down in flames. Here was a President who just won one of the closest elections in American history, a wartime President with a previous 90% approval rating. He had plenty of political capital. What does he do first? He tries to fix a made up problem based on his person ideology rather than constituent need and capsizes his administration.
He’s been sinking slowly ever since.
So what’s your jump the shark moment? Television or politics, it's your choice.
posted by Van at 7:17 AM
7 Comments:
Hmmmmm.
I don't think Bush's attempt at real, meaningful Social Security reform (America will NEVER accept the alternative of higher FICA taxes to bail it out in the future) was politically harmful at all.
Democrats cynically note that most working Americans believe Social Security won't be there for them when they retire and rightly feel that the government can gut that program (reduce payouts, raise the retirment age, etc) with impunity.
As a Conservative, I was initially distressed that the Bush administration took SS reform on as its primary battle, when our tax code is in such obvious need of real reform - ONLY a consumption based system can save us.
I'm one of the majority of working Americans who don't believe SS will be there for me and like most, I don't really care....I just don't want to throw "good money after bad," at this point.
Sure, raise the retirement ages to keep up with acturaial tables (when the retirment age was first somputed 62/65) the average life expectancy of an American male was 66 years of age.
Why not raise the retirement age to to 75/78?
Why not freeze benefits and slowly eliminate SSI, which has become an anchor on the sytem and a huge boondoggle?
Personally, I don't like anything that guarantees an "income" to "the people."
WHY?
Because I was in a business that relied on hard, grinding labor, the kind only people who really needed money would take (deck building)...and any program that seeks to "value people for merely being who they are" (an inane way of rationalizing a guaranteed basic income) eliminates the desperation needed to fill those jobs.
No, sans welfare, millions of able-bodied Americans would throw themselves gladly into such work, making the country far more productive and folks like me, a lot happier and more prosperous to boot. Plus I'd get to feel good about creating jobs for people who needed them.
I got out of that business about ten years ago, as most of my competitors began switching to hiring illegal aliens to do the "grunt work."
I refused to work with people who didn't speak English and also always feared (and still HOPE) the government would be forced to crack down on the hiring of such workers.
I remember the days when you could get the average American to work hard (really hard) for $100/day...now, even most "poorer Americans" don't want to do that, and you can get illegals to work pretty hard for half that ($50 to $60 a day).
Me, I'm for closing our borders and cutting back on our social spending so that Americans are given a renewed incentive to work.
Of course, a switch to a NRST or "Fair Tax" would give America a huge boost in productivity and prosperity as well.
At any rate, I can't define the exact date, it was probably not long after the JFK assassination, when the Democratic Party veered hard-Left and abandoned its traditional working class base of Southerners and northern white ethnics, for an agenda that only further alienated that base - soft on crime ("violent criminals are victims of society"), higher taxes for more social spending, a decidedly anti-Military stance and an equally anti-worker stance (it was the Democrat's "Green agenda" that had them supporting the export of America's manufacturing base).
That absurd and defeatist agenda created the wave of "Reagan Democrats" that broke loose in 1980.
Hell, Reagan himself was a "JFK Liberal" back in the early 1960s and switched Parties after JFK's assassination and LBJ's subsequent ratcheting up oif Vietnam and his concurrent and misguided "war on poverty" at home.
Reagan stayed true to JFK's vehemently anti-Communist, Supply-Side (JFK was as big a tax cutter as Reagan was) 1960 agenda.
That period (the mid-1960s) was the genesis of what we now clearly see as the end of the viable two Party system in America.
Since 1968, there've been seven U.S. Presidents. Only two of them have been Democrats, over that near four decade span (Carter and Clinton).
Only ONE Liberal (Carter) has occupied the WH.
Clinton ran to the Right of both Bush 41 & Dole, two "Moderate" (Liberal) Republicans. During that period, Nixon ran Left (still, just to the Right of Humphrey in '68 and McGovern in '72), now a Democrat has to run Right to win (see Clinton).
Over that period the Dems have gone from having a huge majority in the House and a lock (over 60 Senate seats) in the Senate, through a steady erosion to the loss of the Senate in 1988, all the way to 1994 when they lost BOTH houses of Congress.
To date, the GOP hasn't lost any ground and has actually picked up mid-term seats, a virtually unprecedented occurrance.
A Liberal Democrat occupying the WH for only four of the past 38 YEARS!?
Now THAT'S "jumping the shark."
By the way, I'm not at all happy about that.
How can I be happy about one of America's two major Parties marginalizing themselves?
How can I be happy about the Democrats abandoning their traditional base?
JMK-
Are we talking about the same Social Security Program?
The Social Security program that I a refering to is solvent, according to conservative estiments, for better than 40 years.
And after that it will continue to pay 70% to 80% of it's current payout level.
Bush, like Grover Norquist, wants to starve our government to where it's small enough to
"drown in a bath tub".
He steped on a third rail here becasue there are millions who depened on Social Security to survive, people who are old, suffering from illness and infirmed.
While you were in business how many people on SSI did you actually hire?
I'm assuming that the answer is none, in fact most on SSI cannot work.
I can't speak for the cost of living in NYC, but I'm certain that if you were paying $100 a day in Florida to build decks, you'd find labor. Hell, I'd work on the weekends with you if I could.
I'm saddened to hear about the trend to hire illegals, I wish that the government would put an end to that as well, sadly I don't think that our government is ready to do the right thing here, yet.
You Wrote:
"Reagan stayed true to JFK's vehemently anti-Communist, Supply-Side (JFK was as big a tax cutter as Reagan was) 1960 agenda"
Well, that's not exactly true. Reagan cut the high marginal rate to as low as 28%, JFK droped it to 70% and reformed the tax code - cut loop holes.
According to Paul Craig Roberts
(Secretary of Treasury under Reagan) a factor in the late 1980's recession was the tax burden on the middle class and the tax breaks for the wealthy.
About LBJ: Johnson took a huge gamble by creating the Welfare system and another gamble by coming down hard on the Jim Crow south.
He knew that he was going to lose the south, but he did it anyway. He legislated on principle in this case, and he was right to do it.
If he hadn't alienated the south in such a way, where would we be as a nation?
Racism was an institution, now it's on the margins.
The Liberals have not recovered from this victory over racism yet, and according to Kevin Philips (Nixon policy maker and architict for Republican strategy in the South), we have a long way to go still.
But the liberal ideal that we as a people are in this together has a much broader appeal than the conservative ideal that we must rely only on ourselves.
That said, I think that the Republicans have done a tremendous job at framing the issues and a better job at fighting for their values than the liberals.
The Democrats are unorganized and far too independent, and liberals, at least untill recently, have been living in a vacuum.
We have missed the boat on how people learn and how people apply facts to their values.
We largely believe in the post rationalist postition that if you present the people with the facts, they will make the right choice.
Well according to modern cognitive science, people do not learn that way.
We learn in small bits, or frames, and we apply the facts of an issue to our values, not our values to the facts.
The conservatives, since the day that Lewis Powell was commisioned by the American Chamber of Commerse to start the modern day conservative think tank movement, have championed framing. Through think tanks, training centers, professorships, and talk radio conservatives have made huge gains in the battle of public opinion.
The Republicans, under the gun to win the hearts and minds of Americans, organized.
The Democrats did very little, until recently that is.
The fall of the liberal is not as simple as you suggested. Liberals fell because a liberal President made a moral dicision to include millions of alienated people into the American way of life.
That's not such a bad legacy, at least not from my perspective.
Liberals continue to lose becasue of disorganization, but that's changing too.
Like all movements of it's kind it is a slow process.
Sorry about the type-o's. I was under a time crunch when responding today.
SSI is already insolvent Van, so is Medicaid and I believe both are paid for from FICA funds.
Social Security itself is already in huge trouble. The program, which was designed for the days when 16 workers paid into the program for every one retiree, now has only three workers paying in for every one retiree and Democrats have long wrung their hands over "the coming Social Security crisis."
GOOD!
I've always believed that that was merely a ruse to raise FICA taxes...an outrage to every working American.
The income tax is designed, and rightly so, to keep working people from amassing any appreciable wealth. Those "fat cats" sure know what they're doing.
Now the next time Democrats come hat in hand to raise FICA taxes, Conservatives can honestly say, "We tried everything, there's no way that raising the FICA tax is gonna fly. These poor working folks are taxed enough already."
I don't believe I EVER hired anyone on SSI.
In fact, most of the guys that worked for me had other jobs. They worked for me for $100/day no benefits for the straight cash.
I got out because I wasn't going to go the route of hiring illegals - too much training, too many headaches and too many problems.
You're right about the government not wanting to do "the right thing" vis-a-vis hiring illegals. Believe me, I know, I ratted out a number of former competitors (Hey! It's business after all), but to no avail.
I kind of understand the Republican, especially the "Country Club Republican" support for winking and nodding at illegal immigration, cause they're in it for the cheap labor.
What confounds me is the suicidal Democrats who inanely think that a group of devoutly religious people (Mexicans and Phillipinos are two of the msot devoutly Catholic groups in the world) will identify and continue to vote Democratic.
Check out Texas where Mexican Americans are some of the more Conservative voters and very susceptible to the GOP's painting the Democrats as the Party of "religious intolerance."
Both Parties are insane to ignore this problem, but the Democrats are flat out delusional and their "pro-diversity," pro-immigrant stance only further alienates their once major base (working people) because rampant immigration puts a persistant downward pressure on real wage rates.
NYC's cost of living is something else. $100/day was decent money, especially back then, but the cost of living here is HIGH.
And yes, I found labor, most of the time and I'd developped crews I'd worked with for a awhile, but I couldn't compete when others were able to undercut my labor costs by almost half, so I got out.
Your view that "But the liberal ideal that we as a people are in this together has a much broader appeal than the conservative ideal that we must rely only on ourselves," is hopefully eroneous. America's Founders stresed INDIVIDUALISM and INDIVIDUAL RIGHTS.
Communalism of any kind is anathema to Americanism and is actually incompatible with democracy as well.
The last best hopes for communalism where Joe Stalin and Adolph Hitler respectively. Both knew that to equalize people, you first had to eradicate individuality. Conformity was essential in both those regimes. The productive class, the innovators and entrepreneurs ("the rich," the "upper classes") had to be eradicated, for they are not inclined to share their accumulated wealth - THEY cling to individualism.
Bottom line, I'm a terrorist within any communal nation, no matter how peaceful, caring and nurturing that nation would be. Perhaps especially within such a nation run by a Mother Theresa type person, because I'd believe I'd "get away with it more easilly" under such a naive and compassionate person.
To me "unfairness" is a complaint echoed by every loser, everyone unable to compete.
I know full well that Liberty (as personal responsibility) and individualism are grossly "unfair" to those less entreprenurial, those less motivated and those born to poorer conditions, and to flawed educational environs.
SWhat do I say to that?
"Life's unfair!"
My advice to those folks would be the same advice I'm sure Jefferson, Franklin, Adams, et al would give, "Grab a helmet."
That probably sounds a little flip, maybe even cruel, but it's neither. My point is, "Who cares if Liberty, as America's Founder's designed, is not fair to a huge number (probably a majority) of America's citizens today?...(It's not fair at all)...What matters is which system advances the economy more? Whcih system produces more prosperity and more and quicker advancement?
Without a doubt, the answer is economic liberty.
The desegregation of the South was begun by JFK.
LBJ's massive redistribution of the wealth via the mammoth welfare bureaucracy FAILED.
Why?
Because it did not significantly reduce the amount of poverty in America. In fact, by the mid-1970s, there were more poor people in America than there were in the mid-1960s!
If we really want to help working people, what should we do?
Well, we should start by relieving them of government's oppressive tax burden. Gut the myriad of social programs that never benefit any working people and serve only to trap the poor in an endless cycle of dependance.
Liberalism failed and it took down the Democratic Party because it alienated the traditional Democratic base - southern whites and northern working-class ethnics (Irish, Italians, Jews, etc).
It did this in a number of ways, first by espousing a bone-headed vision of the violent thug as "a victim of an unjust society." It compounded that dislocation by espousing "group rights," but primarily for "protected minorities," doling out preferences and set-asides based solely on race. It went even further by inanely viewing every problem as a governmental policy problem, which led to an inevitable support for ever higher tax rates for ever higher "useless social spending."
This coupled with the hard Left's natural antipathy for religion and its innate suspicion of the Military eroded the traditional Democratic base.
The only way for the Dems to ever get a part of that traditional base back would be to jettison the extreme Left, which they appear loathe to do.
I firmly believe at this point, that the only hope for some future viable two Party system to emerge is for the Democrats to fade into Third Party status, and for a Party like the Libertarian Party to emerge as a viable alternative to the GOP.
There are few (single digits) people in America who'd vote for or even accept a more Socialistic or even Sweden-like public policy...and too many Americans who'd react violently to it.
The "Liberals," until very recently (10 years?) have had a virtual lock on the MSM. They still hold sway on too many College campuses...of course, fuzzy-headed professors who've never worked "out in the real world." What would you expect?
Thankfully that's changed and still changing, Van. Those "old school" professors have poisoned an awful lot of minds, filling them full of utopian ideals that'd never work.
The MSM (ABC, CBS, NBC, NY Times, LATimes, Wa Po, etc) have had a virtual lock on the American media for over a generation and still never were able to convert America from its Conservative/tradional roots.
There's no hope at all for "a resurgent or revitalized Left."
The only hope for the Democrats would be to jettison that failed ideology.
I don't believe they will and I believe they'll become even more marginalized and that's why some other Party will eventually have to become a viable alternative to the GOP, in my view.
I don't know friend, according to Republican Thomas R. Saving and Democrat John L. Palmer -- independent trustees overseeing Social Security and Medicare, SSI is solvent until 2041.
According to the same trustees, Medicare is in serious trouble…now.
In fact, since 2004 Medicare spending has outpaced SSI.
I think that I might take issue with your thoughts on the income tax as well. The income tax was designed to progressively tax the wealthy. As I recall, the original tax was for those who made over 10,000 per year. Durring the Lincoln administration, that was alot of money.
The income tax was designed to fund the Civil War. Later it was adopted as an ammendment to the Constitution - 16th or 13th Ammendment. This was in 1913 (I think).
Later, Roosevelt used it to finance his social programs, and to this day it's a progressive tax.
The idea was to raise money from those who have it because they, by default, us more of the commons than the yeomanry.
You wrote:
"What confounds me is the suicidal Democrats who inanely think that a group of devoutly religious people (Mexicans and Phillipinos are two of the msot devoutly Catholic groups in the world) will identify and continue to vote Democratic."
I couldn't agree more with you on this. The Democratic Party may get more than it bargained for.
I agree that economic liberty is the answer to what we may perceive as a sort of economic injustice.
I also agree that “grabbing a helmet” is the best solution.
But one of our founding fathers, Thomas Jefferson, pushed for free public education long before Horace Mann modeled our public education system after the Germans.
He not only believed in free primary education, he believed in free college education.
You see, the emphasis is still on the individual, but the opportunity is available to us all.
That's what I mean by, "we are all in this together"
We are one nation, and as Ben Franklin said after signing the Declaration of Independence, "We stand together, or we hang alone"
I don't like hand outs, I advocate for opportunity.
I think that it's funny to hear Conservatives speak about how the Democrats should move more to the right.
I'm reminded of something that Harry Truman said (and I'm paraphrasing wildly)
"If given the choice between a conservative Democrat and a conservative Republican, voters will choose the Republican every time"
I think that Harry was right about this, mainly because a conservative Democrat appears to have violated his own principles.
One only needs to look at Joe Lieberman to see my point. Conservatives love his politics, liberals and progressives would rather see him out of office -- that may just happen too. Joe Lieberman may loose the Democratic Primary.
I think that your assumptions about why Liberalism failed are too narrow.
LBJ lost the South, yes. But it was a good cause. His goal, and it largely worked, was to eradicate racism.
His Welfare programs were ineffectual, but as I've mentioned, they were not progressive (flexible) enough.
Clinton helped, but there is more work to be done.
No one is interested in rewarding someone for failures or laziness. Progressives want more opportunity for people who are less fortunate.
LBJ's Great Society didn't go far enough in regards to opportunity. The Great Society created an underclass of Democratic voters. But I seriously doubt that this was the intended goal, it was an unfortunate outcome.
But back to the Dems and why Liberalism is not working.
As I mentioned, we lost the south. LBJ knew this would happen, but he did it anyway.
Around the same time Liberalism became fragmented and difficult to define, the New Left and the Counter Culture Movement may have been the root.
At the same time the Conservatives were organizing.
There are two elements which illustrate this point.
1. The Lewis Powell Memorandium
2. Paul Weyrich polarization of American Christianity.
Lewis Powell was a trial lawyer commissioned by the American Chamber of Commerce to investigate why so few young American students wanted to become conservative businessmen.
He investigated then wrote what is now the Powell Memorandum.
In it he suggested that American businesses pool their money to develop think tanks, training institutions for conservative pundits, purchase radio stations, and train politicians. Powell knew that in order to win, the Conservatives needed the best PR.
The Powell Memorandum is the beginning of the massive right wing media machine that we all know today.
This was about 1970, just as the counter culture movement and the new left descended into America's psyche. People were scared of the new left, which did not help the Liberal movement in the long run either.
In essence, a huge portion of our population was open to new ideas about politics and culture. The Conservatives moved, in lock step, to fill this gap. It’s pretty amazing really.
Paul Weyrich rallied the church going people. What was once a fairly disconnected group of religious fundamentalists became what we now know as the Right Wing Christian Movement.
Republicans have also mastered the art of framing the issues. Framing is the process of learning from small bits of information, such as metaphors.
Frames are very effective because they appeal to our values, the facts of an issue are important, but what appeals to our values has more internal credibility. Frames reaffirm our world views.
So, in the shortest possible sense, this is how the Republicans won the hearts and minds of so many.
They saw an opportunity and they took it.
Progressives are finally beginning to realize this, and yes, we are organizing.
It's gonna take a long time though, and our future is uncertain, but the Liberalism is by no means dead.
We are where the conservatives were in 1964. Badly beaten, but not dead.
As to Social Security:
Economist Says Social Security in Trouble by 2018
Monday, Jan. 24, 2005
http://www.newsmax.com/archives/articles/2005/1/23/194653.shtml
Economist and author Allen W. Smith, Ph.D. has released his comments about the Washington Post Op-ed Piece About Social Security Trust Fund Assets:
An op-ed piece entitled, "What Crisis?" written by Mark Weisbrot and Dean Baker, appears in today's Washington Post. Although I support their opposition to the Bush Social Security proposal, Weisbrot and Baker are totally wrong when they suggest that Social Security does not face a problem until after 2042.
Social Security faces a major problem beginning in 2018, but it is not the problem that Bush, Greenspan and their supporters would have you believe.
The problem is that every penny of the $1.5 trillion in Social Security surplus, generated by the 1983 payroll tax hike, has been "borrowed" and spent (embezzled) by the federal government. This misuse of Social Security funds, that has been going on under both Democrats and Republicans ever since the surpluses began to show up in the 1980s, is in my opinion the greatest fraud ever perpetrated against the American people by their government.
The baby boomers are not the cause of the Social Security problem. Alan Greenspan and company saw to it that the baby boomers would pay enough taxes to pay the retirement cost of the preceding generation, plus enough additional taxes to prepay the cost of their own retirement. If the government had not looted the money, there would be enough assets in the trust fund to pay full benefits until at least 2042.
In a speech on the Senate floor on October 9, 1990, Senator Harry Reid referred to the misuse of Social Security money as "embezzlement" and "thievery." The late Senator Heinz, a Republican from Pennsylvania, also used the word "embezzlement" to describe what was taking place. Senators Heinz, Reid, Hollings, and Moynihan were among those honest members of Congress who tried to stop the looting when it first started under President George H.W. Bush. Senator Moynihan even introduced legislation that would have repealed the 1983 payroll tax increase to keep the surplus out of Bush's hands.
The Social Security trust fund is empty! Contrary to popular belief, it does not hold any marketable Treasury bonds. The government has been issuing a different kind of IOU to the trust fund since shortly before the surpluses by the 1983 tax increase began to flow in. They are called "special issues," and they are held only by the government trust funds. They are not marketable, they have no cash value, and they are not real assets.
Senator Hollings has referred to these special issue IOUs as "a 21st century version of Confederate banknotes."
Since my book, "The Looting Of Social Security," was published in January 2004, I have done everything in my power to alert the public to these facts. However, Weisbrot and Baker, authors of the book, "Social Security: The Phony Crisis," have continued to insist that the trust fund holds enough real assets to keep Social Security going indefinitely, despite the fact that it holds no real assets.
They have a much higher profile than I have, and, thus, they have been quoted often and widely in the media. Now they have an op-ed article in the Washington Post. Although I have written many letters to various editors and writers at the Washington Post in an effort to instill interest in my views, I have yet to get a single reply.
"Social Security: The Phony Crisis" and "The Looting of Social Security" cannot both be right. Either there are, or there are not, real assets in the trust fund. Since the Washington Post has given Weisbrot and Baker the opportunity to present their view, which is just the opposite of mine, I respectfully request that the editors of the Post give me an opportunity to respond. This is too important of an issue for the American people to be denied any point of view.
Having researched Social Security funding for the past five years, and having published two books on the subject, I know that the American people are being deceived and misled by their government with regard to Social Security. Yet, I have been denied access to some media outlets because the message I am delivering does not fit neatly into either of the two main points of view in the national debate.
I firmly believe that both sides of the debate that is currently going on are wrong, but my views have not even been introduced into the national public debate. I request that the media in general not silence the messenger just because they do not like the message.
Perhaps a good person to settle the argument is David Walker, the Comptroller General of the Governmental Accountability Office (GAO). Mr. Walker spoke on this very issue just two days ago, on January 21, 2005. In a San Francisco Chronicle story yesterday, Carolyn Lochhead, quoted Mr. Walker as saying the following:
"The left hand owes the right hand, and that has legal, political and moral significance. But it doesn't have any economic significance whatsoever. There are no stocks or bonds or real estate in the trust fund. It has nothing of real value to draw down ... The trust fund gives a very false sense of security about where we are and how much time we have."
Allen W. Smith, who holds a Ph.D. degree in economics from Indiana University, is Professor of Economics Emeritus, Eastern Illinois University.
The author of several books, including "The Looting of Social Security: How the Government is Draining America's Retirement Account," (Carroll & Graf, 2004) and "The Alleged Budget Surplus, Social Security, and Voodoo Economics," Dr. Smith has appeared on CNBC, CNNfn, and more than 100 radio talk shows to discuss Social Security.
The Trust Fund Contains No Real Assets
Allen W. Smith
http://www.allenwsmith.com/id9.html
There seems to be a major misunderstanding as to what was supposed to happen as a result of the 1983 Social Security tax increases, and what actually happened. Below are comparisons of “what was supposed to happen” and “what actually happened.”
Investment: The funds were supposed to be invested in already existing government securities in order to pay down the publicly-held debt dollar for dollar with Social Security surpluses. Since current law required that the money be invested in government securities, the closest thing to putting it in the bank was to use the money to pay down the public debt during the surplus years and then borrow the money back when it was needed beginning in 2018.
Long-term Effect: If this practice had been followed, the public debt would now be lower by $1.5 trillion, ($5.6 trillion instead of the current $7.1 trillion) and interest earned on the investment would have been reinvested in additional securities held by the public. The federal government would have spent $1.5 trillion less unless they had raised taxes to fund additional spending.
Asset Value: If the money had been invested in marketable government securities, the securities could have been cashed in whenever needed without any additional government action. The fund would be truly capable of paying full benefits until 2042.
Interest Received on Investment: Actual interest payments would have been made which would have been invested in additional marketable government securities.
What Actually Happened to the Revenue Generated by the 1983 Social Security Tax Increase
The funds were not invested in any existing marketable securities. Instead, the government treated the revenue from the tax increase as if it were new spending authority. The government used every dollar to fund other spending programs and tax cuts, and not a dollar was paid down on the public debt.
The government spent $1.5 trillion more than it could have spent without the existence of the Social Security surplus. The public debt is now $1.5 trillion higher than it would have been if the government had not had access to the Social Security money. Instead of having received real interest payments, the trust fund has only non-marketable special issue securities which are nothing more than bookkeeping entries telling how much interest the government owes (but has not paid) to Social Security.
The $1.5 trillion of government special-issue securities which the trust fund holds are non-marketable and thus are worthless until and unless the government at some point in the future decides to repay the money it has “borrowed.” They cannot be sold at any price. Beginning in 2018 when the Social Security trust fund will start running annual deficits, full benefits cannot be paid unless the government chooses to begin paying back the money it owes.
The Social Security trust fund has not received a dime in interest payments. All it has is the bookkeeping entries that tell how much the government was supposed to have paid in interest.
In the truest sense, the money is not really invested. It has just been taken by the governments and replaced with non-marketable government securities that are the equivalent of a note that a bank robber might leave in the vault telling how much money he has taken.
We, the American people, have been played for fools and suckers by our government over the past two decades. Every president, and most members of Congress from both political parties, have knowingly and willingly participated in major fraud against the American public for partisan political reasons. The large Social Security surpluses generated by the 1983 tax increase allowed politicians to spend massive amounts of additional money without having to suffer the consequences of raising taxes. The true size of the federal budget deficit has been masked in an effort to fool the public. For example, the true size of the 2004 on-budget deficit (excluding Social Security) is reported by the OMB as $639 billion. The Social Security surplus for 2004 is $164 billion. By subtracting the Social Security surplus from the on-budget deficit (a practice that is prohibited by the 1990 Budget Enforcement Act) they arrive at a deficit number of $475 billion. This is the number that is reported to the public which is $164 billion less than the real deficit.
The points that I am making are not newly recognized facts. The government has known what it was doing from the very beginning. We know this because the Congressional Record records the efforts of a few honest members of Congress who repeatedly battled against the fraudulent practices of their colleagues. Below are excerpts from a speech made on the Senate floor by South Carolina Senator Ernest “Fritz” Hollings on October 13, 1989:
“We arrive at that fanciful...projection only by indulging in enough fraud and larceny and malfeasance to land an ordinary citizen in the penitentiary. Of course, the most reprehensible fraud in this great jambalaya of frauds is the systematic and total ransacking of the Social Security trust fund in order to mask the true size of the deficit. As we all know, the Social Security payroll tax has become a money machine for the U.S. Treasury, generating fantastic revenue surpluses in excess of the costs of the Social Security program. Excess Social Security tax revenues will be $65 billion in 1990 alone—boosted by yet another rise in the Social Security tax rate, slated to kick in January 1. By 1993, the annual Social Security surplus will soar to $99 billion.
The public fully supported enactment of hefty new Social Security taxes in 1983 to ensure the retirement program’s long-term solvency and credibility. The promise was that today’s huge surpluses would be set safely aside in a trust fund to provide for baby-boomer retirees in the next century.
Well, look again. The Treasury is siphoning off every dollar of the Social Security surplus to meet current operating expenses of the Government. By thus reducing the deficit, we mask the true enormity of the Federal budget crisis while creating the illusion that Congress and the administration are actually doing something about deficits.
Mr. President, our proposed amendment, which we intend to attach to the debt-ceiling bill, would put Social Security surpluses off budget for purposes of calculating the Federal budget deficit beginning October 1, the first day of fiscal 1990. Those IOU’s are a charming bookkeeping nicety, but the sheriff who tries to collect on them is truly going to have his work cut out for him.
The hard fact is that, in the next century, the Social Security system will find itself paying out vastly more in benefits than it is taking in through payroll taxes. And the American people will wake up to the reality that those IOU’s in the trust fund vault are a 21st century version of Confederate banknotes.
Of course, the Treasury would have the option of raising taxes to repay the astronomical sums we have borrowed from the trust fund. But that would be a brazen ripoff of working Americans, many of whom will be retirees obliged to pay a second time for the benefits they have already earned.
On the other hand, if the Treasury wimps out and chooses not to raise taxes to reimburse the trust fund, then there will be no alternative but to slash Social Security benefits. The most likely scenario is that Social Security payments would be turned into just another means-tested welfare program for the very poor; if you make more than say, $15,000 per year, then forget about collecting any Social Security benefits.
Any way you slice it, it is a lousy public policy to borrow massively from the Social Security trust fund with no credible plan for reimbursement. Of course, the immediate damage from this approach is that it allows us to mask the true scale of the Federal budget deficit, thus making it easier for us politicians to sit on our hands.
This is a gross breach of faith with the American people. Social Security is perhaps the most successful social program ever enacted by the Federal Government. Without question, it is the most effective antipoverty program in history. Social Security is not charity or welfare. On the contrary, it is a supplementary retirement fund that workers pay for with their hard-earned money.
I say it is time to stop playing games with Social Security and the government’s finances. It is time to use honest budget numbers and to make honest budget choices. By all means, let us begin by putting Social Security truly in trust and totally off budget.”
These words were uttered by Senator Hollings more than 14 years ago during the early days of the looting. There is no doubt that government officials knew exactly what they were doing to the future of Social Security by looting those funds.
But they just thumbed their noses at the public and continued their illegal looting. This makes my blood boil, and I think it would anger most Americans if they only knew what was going on. But for some reason the AARP doesn’t seem bothered by this atrocity. In order to fix Social Security, it would be necessary to repeal George W. Bush’s unaffordable tax cuts. Is it possible that the leadership of the AARP would prefer to keep their tax cuts even if it meant letting Social Security go down the drain? I hope not, but they continue to refuse to take a stand on Social Security restitution. Perhaps they need to be pressured by their members. If you have not already done so, please visit www.restoresocialsecurity.org, the website of the Citizens Coalition for Social Security Restitution...
N.B. I vehemently disagree with those like Dr. Smith who seem to believe that tax increases should pay for an enhanced Social Security system.
No way!
Let people increasingly invest in their own 457s and 401Ks, Roth IRAs, etc, but the idea of tax the productive class to pay for a lavish retirement system is as gone as the old days where factory employed workers "for life" and paid for health insurance and pension funds.
Those days are as dead as Disco and they're not coming back...and I could easily argue that they weren't "the good old days," but terrible days for many working Americans.
I have to say Van, that I'm steadfastly AGAINST "government created opportunity," whatever that might be.
I can't even conceive of just what a "government created opportunity" might look like.
Opportunities are all around us. They germinate organically, when some people see problems around them and seek to solve them for profit.
Government CANNOT create opportunities, or even help those disadvantaged (by such things as poor education, a dysfunctional home-life, etc) SEE the opportunities before them.
Sure, it can provide low interest rate loans (with taxpayers paying the bulk of the interest rates) and small business loans (ditto), but it CANNOT create "opportunity."
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And of course the "Great Society" deliberately mired America's poor in dependancy programs! Otherwise it would've eschewed handouts and redistributive programs in favor of educational and small business loans.
No, those programs were deliberately designed, not only as redistributive programs that maintained the wealth of the truly wealthy, by redistributing the wealth primarily from the working/Middle Class to the poor, but as programs that kept the poor mired in government dependancy programs, that in turn created work for middle class College grads who were deficient in math and the hard sciences a/k/a Social Workers, etc.
As to "framing the issues," look to the GREAT Milton Friedman's 1980 series aired on PBS entitled Free to Choose. It's an awesome series and you still might be able to find it on Amazon and EBay. I have all ten episodes on old VHS.
Friedman literally destroyed all those who continued to make Keynesian ("Liberal") economic arguments, but NOT because he was able to "cleverly frame a series of issues," (check the tapes) he consistently showed why markets ALWAYS work and government managed economies NEVER work and CAN'T work.
Of course, von Mises (Human Action) and Hayek (The Road to Serfdom) had already done that long ago. In fact, Hayek had devastated Keynes in two head-to-head debates back in 1948.
The economic failures of the Democrats has been rooted in their insisting on trying to find "some alternative to the chaos of the market," an alternative that DOES not exist, except in the minds of people like John Maynard Keynes, who, ironically, was NOT a trained economist!
What Democrats SHOULD be doing is finding market-based solutions to current problems and looking to shrink government even more than Republicans.
Big government is ALWAYS predicated on two principles (1) plundering the working and middle class and (2) preserving the wealth of the independently wealthiest elites.
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