This Daily KOS Story

The REAL Real Bush SS Agenda



by sidnora
Wed Mar 23rd, 2005 at 13:40:38 PST

In the latest Harper's (sorry no link, the April issue isn't up on their site yet), Michael Hudson discusses what he believes to be the true underlying cause for Bush's insistence on privatizing Social Security: that if we don't, the stock market will crash.

PS: this is my first diary. Please be kind. And constructive criticism is welcome.

Diaries :: sidnora's diary ::

The article is titled "The $4.7 Trillion Pyramid (Why Social Security Won't Be Enough to Save Wall Street)". Here's a summary:

For the last 30 years or so, the market has been floating along, artificially cushioned by funds invested by large corporate defined-benefit pension plans. But the managers of these plans have increasingly succumbed to the temptation to raid the trust funds of these plans for cash to prop up their companies' less-than-brilliant performance figures (sound familiar?), and thus their stock prices, secure in the knowledge that the plans were insured by the Pension Guarantee Benefit Corporation.

The PBGC was founded by Congress in 1974 to protect the pensions of workers whose employers went bankrupt. So, if the fund managers blew the nest egg, they could feel secure knowing that we, the people, could always do the damage control for them.

By now, due to this long-term inability to keep their fingers out of the corporate cookie jar, and their failure to make up the resulting shortfalls in the market as they hoped to, many of these pension funds are truly those "worthless pieces of paper" that Bush is always comparing the Social Security Trust Fund to. And when the retirees actually receive their pensions, it's either bankrupting, or coming close to bankrupting, the companies they worked for all their lives; think airlines, steel companies, and soon, automobile companies. In fact, so many companies are on the verge of being bankrupted in this way, the PBGC is in danger of being forced into bankruptcy itself, to the tune of as much as $95 billion of our tax dollars.

So, the stock market is getting nervous about this. It takes constant fresh infusions of capital to keep stocks floating along at prices way higher than their real earnings would justify. They need this money like a vampire needs blood. What to do, what to do?

Waaaiiit a minute - here's a great big pot of money - untouched! Trillions of dollars, in fact! It's - you guessed it - the Social Security Trust Fund. The last large, unviolated reserve of capital left anywhere in the U.S. economy. And you thought they were just drooling over the prospect of the management fees to come!

This is really just an overview of Hudson's piece; I strongly urge you to seek out the whole thing. If my summary seems a bit disjointed, I promise you that his essay is not. All dots are connected, with figures (did you know that $675 of the cost of every car GM makes is pension obligation?)and citations provided.I will try to keep an eye on Harper's' site and post another diary with the link as soon as possible.

The stock market is headed for a crash anyway...haven't you been paying attention? It's posted three straight losing weeks, and it dropped over 70 points yesterday (3/29/05). This is just the tip of the iceberg.

General Moters is going to declare bankrupcy in the next 3-6 months and the housing bubble will burst. (GM doesn't just sell cars; their GMAC division sells loans...and it's in deep doodoo right now.)

Wait until the increased transportation costs--due to $55 per barrel crude oil--start getting added to the price of all transported goods. And the price of oil will only go higher. The cost of EVERYTHING will go up, Wal-Mart won't be cheap any longer and the economy will collapse just like Argentina's did in 2001. (I'm preparing a diary for publication in Daily Kos on all this.)

Look out below...

Not to mention the massive trade and federal deficits which are causing the dollar to free fall. Bush has been telling anyone who will listen that the SS Trust Fund is nothing but worthless scraps of paper. However, those "worthless scraps of paper" are exactly the same US Treasury bills he is selling to Japan, China, Saudi Arabia, ect. in order to finanace his war, and his tax cuts for the wealthy. Soon, these foreign investors will take his advice and begin to sell their treasury bills. When that happens the house of cards will fall, and our economy will collapse.

That may be a blessing in disguise. The horrible conditions which ensue should be enough to make the American people wake up and revolt against the corrupt bastards.

Seamus & shoeless (Sounds like a comedy duo, doesn't it?): Both absolutely right. It's going to be a wretched and bitter and painful fix...but sometimes you just have to slap people out of their complacency. Anytime 61 million voted for Clueless, 59 million voted for Kerry...and 79 million STAYED HOME, we've got apathy in the electorate that verges on the criminal. These self-satisfied idiots who have been hypnotized by American Idol and think that they're in clover just because they can shop at Wal-Mart badly need a wake-up call...and there's a real beaut coming down the pike!

Yes, it IS a good thing. Tough love.

(I've got a diary going up at Daily Kos on this very subject either later today or tomorrow. I'll post a link here when it's done.)

http://www.bushflash.com/14.html

Locutus: ("Resistance Is Futile!") Extremely powerful flash animation there, and a BIG thank you for sharing! If you don't mind, I'm going to pass that one around. As I recall, I first saw the "14 Steps to Fascism" article right here at POAC's main page!

My Daily Kos diary, "A Recipe For Disaster," is now up and running, you can read it here: http://www.dailykos.com/story/2005/4/2/114640/0355
Please let me know what you think...