Quantcast
Connect with us

Dick Armey calls Social Security ‘corrupt’, a ‘pay-as-you-go Ponzi scheme’

Published

on

The social safety net that helps millions of retired and disabled Americans remain in their homes and continue purchasing food is really a corrupt “Ponzi scheme” that should be made “voluntary,” according to former Republican House Majority Leader Dick Armey.

Armey, who chairs FreedomWorks — one of the political organizations responsible for bringing a greater Republican identification to the original, Ron Paul-supporting tea party groups — made the comments during a roundtable at the Right Nation 2010 convention in Chicago.

ADVERTISEMENT

His attack on Social Security is unsurprising, as Armey and other Republican figures have for years led a charge to privatize or otherwise eliminate the generations-old safety net. Though Armey has long insisted that government programs be made voluntary, analysis from the Center for American Progress shows that if Americans were given the choice to opt out of Social Security, it would collapse the system.

“These programs need younger, working people to contribute to them, so letting millions of people opt-out would likely yank retirement benefits from older Americans who paid into the system on the promise that they would be taken care of upon retirement,” they noted.

“Moreover, wealthy people who can afford their own retirement plans would likely opt-out, slashing revenues and leaving less-affluent Americans stuck in underfunded or totally insolvent programs. And as former Vermont Governor Howard Dean […] pointed out, some people who opt-ed out on the expectation that they would make enough money to support themselves in their old age would inevitably be unable to do so, leaving the country with a ‘moral obligation’ to care for them, but with no means of doing so.”

“The government uses the concept of a trust fund to take your money under false pretenses,” Armey told a gathering of bloggers in Chicago. “For years, I wrote about and talked about and taught about what I call ‘corrupt government practices,’ because they’re always so quick to talk about corruption. One of the corrupt government practices is stealing your money under false pretenses.

“I’ll give you a to wit: Social Security. When they had the Alan Greenspan commission, they knowingly raised payroll taxes more than what was necessary to meet the flow of output. Social Security is a pay-as-you-go Ponzi scheme. They knew very well that the extra $250 billion would be spent on their social schemes.”

ADVERTISEMENT

Privatizing or fundamentally changing Social Security has been at the core of the Republicans’ agenda for years, since they tried and failed to roll the safety net into Wall Street-connected personal retirement savings accounts during the George W. Bush administration.

In the South American nation of Chile, when the US-backed miltiary dictator Augusto Pinochet removed his nation’s Social Security-like system at the prompting of labor minister Jose Piñera, the economy suffered greatly. Pinochet’s policies were largely influenced by famed US economist Milton Freedman, who advocated an extremist view of privatization of nearly all resources, and an elimination of government interference in private markets.

“The [World Bank] found that exorbitant fees and other costs charged by private pension fund managers eat up as much as 15 percent of the contributions made by average Chilean workers, and even more for poorer workers,” Mother Jones noted in 2005. “Investment returns have been far more modest than the hefty 11 percent return claimed by the private managers. The Chilean government’s pension superintendent says actual returns for someone earning Chile’s minimum wage were only 3.7 percent between 1994 and 2000.”

ADVERTISEMENT

Pinochet’s labor minister, who left Chile to work for the conservative-leaning CATO Institute, went on to be credited as the man who influenced President Bush to side with efforts to privatize America’s safety net.

Despite many Republicans claiming there are none among their ranks who wish to demolish the otherwise very popular program, Armey’s latest resurgence once again highlights the underlying support for a radical right-wing agenda.

ADVERTISEMENT

“One of the worst ideas is privatization,” Sen. Bernie Sanders (I-VT) opined in a recent op-ed. “After the greed and recklessness of Wall Street caused markets to collapse in 2008, does anyone still seriously believe it would be a good idea to turn the retirement security of millions of Americans over to Wall Street CEOs whose dishonesty and irresponsibility have no end?

“Their administrative fees alone would take a 15 percent bite out of workers’ retirement investments, not to mention the real threat of another stock market collapse. In sharp contrast, administrative costs for Social Security are less than 1 percent of the program’s budget.”

“Most importantly,” he emphasized, “despite economic conditions and the ups and downs of the stock market, Social Security has never failed to pay full benefits to every eligible beneficiary.”

ADVERTISEMENT

A recent Wall Street Journal poll [PDF link] found that two-thirds of US respondents were uncomfortable with candidates who supported privatization of Social Security.

Other Republicans who’ve spoken out for the demolition of Social Security include Sen. Jim DeMint (R-SC), Rep. Paul Ryan (R-WI) and Rep. Michele Bachmann (R-MN). GOP candidates who’ve supported similar plans include Senate hopefuls Joe Miller, Rand Paul, Ron Johnson, Sharron Angle and Pat Toomey.

By contrast, more than 50 Democrats in the House have added their names to a letter demanding President Obama resist calls to privatize or otherwise cut “the best social safety net program America ever created.”

After this year’s elections, an Obama-appointed “federal deficit commission,” led by Morgan Stanley board member Erskine Bowles, is widely expected to recommend the government cut or privatize Social Security. One of the commission’s members, former Sen. Alan Simpson (R-WY), attracted controversy in late August when he called Social Security “a milk cow with 310 million tits.”

ADVERTISEMENT

This video is from Think Progress, published Sept. 20, 2010.

Updated from an original version.


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Breaking Banner

Moon may be richer in water than thought — and it could help propel humans farther from earth

Published

on

There may be far more water on the Moon than previously thought, according to two studies published Monday raising the tantalising prospect that astronauts on future space missions could find refreshment -- and maybe even fuel -- on the lunar surface.

The Moon was believed to be bone dry until around a decade ago when a series of findings suggested that our nearest celestial neighbour has traces of water trapped in the surface.

Two new studies published in Nature Astronomy on Monday suggest there could be much more water than previously thought, including ice stored in permanently shadowed "cold traps" at lunar polar regions.

Continue Reading

Breaking Banner

Asymptomatic coronaagvirus sufferers lose antibodies sooner: study

Published

on

Asymptomatic coronavirus sufferers appear to lose detectable antibodies sooner than people who have exhibited Covid-19 symptoms, according to one of the biggest studies of its kind in Britain published on Tuesday.

The findings by Imperial College London and market research firm Ipsos Mori also suggest the loss of antibodies was slower in 18–24 year-olds compared to those aged 75 and over.

Overall, samples from hundreds of thousands of people across England between mid-June and late September showed the prevalence of virus antibodies fell by more than a quarter.

The research, commissioned by the British government and published Tuesday by Imperial, indicates people's immune response to Covid-19 reduces over time following infection.

Continue Reading
 

2020 Election

Early voting to be hit by heavy rain and flooding as Hurricane Zeta barrels towards the Gulf Coast

Published

on

Hurricane Zeta is expected to make landfall near Louisiana's border with Mississippi on Wednesday evening as campaigns work to get supporters to the polls and convince any undecided voters to back their candidate.

"Hurricane conditions and life-threatening storm surge are possible along portions of the northern Gulf Coast on Wednesday, and Storm Surge and Hurricane Watches are in effect," the National Hurricane Center warned.

"Between Tuesday night and Thursday, heavy rainfall is expected from portions of the central Gulf Coast into the southern Appalachians and Mid-Atlantic states near and in advance of Zeta. This rainfall will lead to flash, urban, small stream, and minor river flooding," the center explained.

Continue Reading
 
 
Democracy is in peril. Invest in progressive news. Join Raw Story Investigates for $1. Go ad-free. LEARN MORE