Wall Street Oligarchs Eying Social Security
Hank Paulson, the
bankster/U.S. Treasury Secretary, who deregulated the
financial system, caused a world crisis that wrecked the
prospects of foreign banks and governments, caused
millions of Americans to lose retirement savings, homes,
and jobs, and left taxpayers burdened with
multi-trillions of dollars of new U.S. debt, is still
not in jail. He is writing in the
New York Times
urging that the mess he caused be fixed by taking away
from working Americans the Social Security and Medicare
for which they have paid in earmarked taxes all their
Wall Street`s approach to the poor has always been to
drive them deeper into the ground.
As there is no money to be made from the poor, Wall
Street fleeces them by yanking away their entitlements.
It has always been thus. During the Reagan
administration, Wall Street decided to boost the values
of its bond and stock portfolios by using Social
Security revenues to lower budget deficits. Wall Street
figured that lower deficits would mean lower interest
rates and higher bond and stock prices.
Two Wall Street henchmen, Alan Greenspan and David
Stockman, set up the Social Security raid in this way:
The Carter administration had put Social Security in the
black for the foreseeable future by establishing a
schedule for future Social Security payroll tax
increases. Greenspan and Stockman conspired to phase in
the payroll tax increases earlier than were needed in
order to gain surplus Social Security revenues that
could be used to finance other government spending, thus
reducing the budget deficit.
They sold it to President Reagan as
Security on a sound basis."
Along the way Americans were told that the surplus
revenues were going into a special Social Security trust
fund at the U.S. Treasury. But what is in the fund is
Treasury IOUs for the spent revenues. When the
are needed to pay Social Security benefits, the Treasury
will have to sell more debt in order to redeem the IOUs.
Social Security was mugged again during the Clinton
administration when the Boskin Commission jimmied the
Consumer Price Index in order to reduce the inflation
adjustments that Social Security recipients receive,
thus diverting money from Social Security retirees to
We constantly hear from Wall Street gangsters and from
Republicans and an occasional Democrat that Social
Security and Medicare are a form of welfare that we
can`t afford, an
"unfunded liability." This is a lie. Social Security
is funded with an earmarked tax. People pay for Social
Security and Medicare all their working lives. It is a
pay-as-you-go system in which the taxes paid by those
working fund those who are retired.
Currently these systems are not in deficit. The problem
is that government is using earmarked revenues for other
purposes. Indeed, since the 1980s Social Security
revenues have been used to fund general government.
Today Social Security revenues are being used to fund
trillion dollar bailouts for Wall Street and to fund the
Bush/Obama wars of aggression against Muslims.
Having diverted Social Security revenues to war and Wall
Street, Paulson says there is no alternative but to take
the promised benefits away from those who have paid for
Republicans have extraordinary animosity toward the
poor. In an effort to talk retirees out of their support
systems, Republicans frequently describe Social Security
as a Ponzi scheme and
They ought to know. The phony trust fund, that they set
up to hide the fact that Wall Street and the Pentagon
are running off with Social Security revenues, is a
Ponzi scheme. Social Security itself has been with us
since the 1930s and has yet to wreck our lives and
budget. But it only took Hank Paulson`s derivative Ponzi
scheme and its bailout a few years to inflict
irreparable damage on our lives and budget.
Years ago with stagflation defeated and a rising stock
market, I favored privatizing Social Security as a way
of creating a funded retirement system and producing
greater savings and larger incomes for retirees. At that
time Wall Street was interested, not for my reasons, but
in order to collect the fees from managing the funds.
Had Social Security been privatized, I doubt that Wall
Street would have been permitted to deregulate the
financial system. Too much would have been at stake.
After the latest crisis brought on by Wall Street`s
dishonesty and greed, trusting Wall Street to manage
anyone`s old age pension requires a leap of faith that
no intelligent person can make.
Wall Street has got away with its raid on the public
treasury. Now, pockets full, it wants to pay for the
heist by curtailing Social Security and Medicare. Having
deprived the working population of homes, jobs, and
health care, Wall Street is now after the elderly`s old
Social Security, formerly an untouchable
of politics," is now
while the real unsustainables—a pre-1929 unregulated
financial system and open-ended multi-trillion dollar
Global War Against Terror—are the new untouchables.
This transformation signals the complete capture of
American democracy by an oligarchy of special interests.
Paul Craig Roberts [email
him] was Assistant
Secretary of the Treasury during President Reagan`s
first term. He was Associate Editor of the Wall
Street Journal. He has held numerous academic
appointments, including the William E. Simon Chair,
Center for Strategic and International Studies,
Georgetown University, and Senior Research Fellow,
Hoover Institution, Stanford University. He was awarded
the Legion of Honor by French President Francois
Mitterrand. He is the author of
Supply-Side Revolution : An Insider`s Account of
Policymaking in Washington;
and the Soviet Economy and
Meltdown: Inside the Soviet Economy,
and is the co-author
with Lawrence M. Stratton of
The Tyranny of Good Intentions : How Prosecutors and
Bureaucrats Are Trampling the Constitution in the Name
of Justice. Click
here for Peter
Brimelow`s Forbes Magazine interview with Roberts
about the epidemic of prosecutorial misconduct.
His latest book, How The Economy Was Lost,
has just been published by CounterPunch/AK Press.