Social Security privatization

Link: https://eppc.org/publication/a-subsidy-for-motherhood-why-i-now-support-social-security/

Excerpt:

But a major source of Social Security’s popularity, I believe, is that it is the last major institution in America to embody what used to be called the “family wage”—an adjustment of the pre-tax market wage to accommodate the responsibilities of raising a family. This is what now most embarrasses liberals about Social Security, no less than it offends yuppies. Social Security stands almost alone in accepting the traditional family (in which the father works to support the family and the mother raises the children) as normal. In addition to the basic retirement benefit based on each worker’s lifetime of contributions, there is an extra 50 percent spouse’s benefit. For most married women who work part-time, intermittently, or not at all outside the home, this spousal benefit is greater than the one to which they are entitled based on their own lifetime cash earnings. There is also a widow’s benefit equal to 100 percent of the husband’s basic benefit, and coverage of surviving dependents. To qualify, in general, the couple must remain married, the husband must be steadily employed, and the wife must give up a lifetime of earnings equal to at least one-half of her husband’s. Thus the structure of Social Security—in sharp contrast to welfare—upholds intact marriage, a father’s responsibilities, a mother’s sacrifice.

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Yet every major Social Security reform proposal would pare down or phase out the “family wage.” Liberal proposals to tax or to means-test benefits would disproportionately hit the family benefits. Proposals by conservatives to privatize Social Security would hit the family twice. Social Security’s benefits for the traditional family, in effect, would effectively be phased out. In addition, the whole baby boom would be forced to “pay twice for retirement,” making it even harder to raise a family.

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The birth rate in industrial countries has been falling steadily since the 19^th century (in fact, one of the few interruptions of this decline in the United States, the baby boom, started after Social Security). The Myrdals were among the first to argue that this “demographic transition” has three causes: urbanization (which ends the economic value of children as unpaid farmhands and geographically scatters the extended family); industrialization (which makes widespread saving and social insurance against old age both possible and necessary); and secularization (which changes attitudes about birth control and abortion).

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No one can argue that keeping Social Security will trigger a resurgence of traditional values; Great Awakenings are not kicked off by the retention of federal programs. But no one can doubt that officially upholding the family as the norm is important—or deny that undermining the “family wage” aspect of Social Security would be a serious blow to the family.

Author(s): John D. Mueller

Publication Date: October 15, 1987

Publication Site: Policy Review

Link: https://jacobin.com/2023/01/republicans-debt-ceiling-shock-doctrine-spending-cuts

Excerpt:

The debt ceiling is normally a dull topic, and many have understandably neglected to follow along. To recap, the debt ceiling is the artificial cap Congress places on the amount of money the government can borrow. As Secretary of the Treasury Janet Yellen and others have pointed out, there is little practical reason for the debt ceiling to exist at all. From a technical point of view, it is a formality to authorize the Treasury to pay bills the government has already incurred. Through creative accounting, the Treasury can keep paying for a few more months, and then it will have to stop unless Congress votes to raise the debt ceiling.

All sides agree that the US government deliberately defaulting on debts would be the financial equivalent of an atom bomb, causing immediate painful shocks across the world economy and unpredictable long-term effects. In order to avoid this scenario, voting to raise the debt ceiling is usually a matter of course — though the number of near and actual government shutdowns from Congress playing chicken with the ceiling have increased in recent decades.

But it might be different this time. As Politico reported last week, a number of former government officials who negotiated during previous standoffs over the debt ceiling think there’s much less room for a negotiated settlement this year.

The main reason is that, at least on the surface, House Speaker Kevin McCarthy is in a weak position, effectively held hostage by conditions that were imposed on him by the most extreme members of the House Republican conference during his election to speaker. Those conditions specifically require significant spending cuts in exchange for raising the debt ceiling.

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Democrats also argue that though Republicans insist on reducing spending, they have refused to make specific demands for what they want cut. Here is where The Shock Doctrine might provide a hint of what’s to come. The idea of privatizing Social Security has been “lying around” since George W. Bush’s presidency. Joe Biden himself has a long, well-documented history of trying to cut Social Security and Medicare, though in public statements since 2020 he has consistently said he would not agree to do so.

Kevin McCarthy and other Republicans have repeatedly floated the idea of cutting the popular programs over the past year. While McCarthy appeared to abruptly back off the idea of cutting Social Security and Medicare as part of the debt ceiling negotiations on Sunday, his ambiguous promise to “strengthen” the programs without specifying what that means leaves plenty of room for privatization.

Author(s): Ben Beckett

Publication Date: 31 Jan 2023

Publication Site: Jacobin