The New Social Security Numbers

Hidden behind the immigration hoopla yesterday, the Trustees of Social Security and Medicare released belatedly their annual report. According to them, the Social Security trust fund will now run out one year than previously stated, in 2040. The Medicare trust will be depleted two years earlier than thought, in 2018.

I guess it's time again to throw some more wood on the funeral pyre and strike up the band to play a somber dirge as we march both funds to their death.

Of course, none of this really matters, right? The Bush administration has famously stated that Reagan proved that deficits don't matter. Why should we worry?

Naturally, the privatizers are going to return to television to say that their way is the only way to save Social Security. It will probably need some tweaks as we move along, but don't you believe today's privatizers. These aren't your father's privatizer's who simply don't think that government shouldn't be involved with socialized retirement. They have a different agenda.

They don't see Social Security as a safety net for the elderly, but instead as a safety net for the investor class. You see, 401(k) accounts have been around now for twenty some years, and a lot of people during their peak earning years have put a lot of money into them, and through that vehicle, the stock market.

As the baby boomers retire, they aren't just going to drain Social Security down, they are going to withdrawal vast sums of money from the stock market. For the investor class, and for that matter, the youngest baby boomers who are behind the age curve, to keep making money in the market, that money has to be replaced. That's where the Social Security trust comes into the picture. You have to have buyers to replace cashing out sellers. (Who knows, with the way the republicans have screwed up the economy, it might be necessary to do it to avoid another depression.)

That's why last year, this bamboozle was sold as a chance for people who wouldn't normally be able to invest in stocks as a way to do so. In reality, those investors are unlikely to do any better than the current system, but they do add cash flow to the system. That's what the current crop of privatizers want.

Consider yourself forewarned.