Social Security Talking Points #2
First let's pull a quote from the August '99 issue of Investment Dealer Digest:
"Besides making direct political contributions, various financial services, firms, and banks have financed think tanks, various projects, and public policy forums that promote privatization. State Street, which managed four hundred and eighty-five billion in assets, including index funds, has been the most prominent, with Chairman (Marshall) Carter co-authoring a book, "Promises to Keep: Keeping Social Security's Dream", that he wrote with William Shipman, a principal with State Street Global Advisors, it's money management arm.
State Street has been a Financial backer to the Cato Institute. Cato Institute, the libertarian think tank that has endorsed full-scale privatization of social security, with Cato officials even calling for a sale of federally-owned national parks to pay for the cost if necessary.
Shipman is co-chairman of the Cato Project on Social Security Privatization. Back in 1996, the Cato Institute received two million dollars to be spent over a three year period to fund research conferences, and other activities involving groups, members, congress and their staff."
Jump to this week. In a recent issue (February 4th) of the Wall Street Journal, the question was asked, "Who is going to manage the tens of billions of dollars that social security privatization will pour into private accounts each year?" According to mutual fund expert Jeff Bobroth, there are only two or three companies that are capable of doing this, including State Street Corporation's State Street Global Advisor.
On February 3rd, Michael Tanner of the Cato Institute appeared with Peter Orszag of the Brookings Institute to discuss Social Security Privatization on Newshour with Jim Lehrer. Tanner falsely claimed that the Social Security Trust Fund has no real assets - that it is composed of a collection of IOUs.
This is really the most dishonest talking point pulled out by the neoconservative noise machine. First off, the so-called IOUs in the Social Security Trust Fund are US Treasury Bonds, supposedly the safest investment on the planet. By suggesting that these treasury bonds are not a safe investment, the neoconservatives are insinuating that the United States is going to default and declare bankruptcy.
This tactic is completely idiotic, and among the worst decisions that could possibly be made. By promoting investment in corporate stocks over US treasury bonds, the neocons are publicly proclaiming that US treasury bonds are not a safe investment. The United Nations has already gone on record stating that the US is in financial trouble, due to massive fiscal and trading deficits. The GAO recently stated that if the Bush Tax Cuts are made permanent, the US is at risk of having to spend 100% of the budget on paying interest on the national debt by the year 2042 -- In other words, if we do not let the Bush Tax Cuts sunset, the US will go bankrupt, rendering the entire argument over social security privatization moot.
Let's go back over what we have learned. According to the Wall Street Journal, State Street Corporation is among the two or three corporations most likely to profit directly from Social Security Privitization. Way back in 1999, State Street Corporation began funding right wing think tanks, such as the Cato Institute, and providing political donations to politicians, in an effort to promote the case for social security privatization.
The Cato Institute, who's website byline reads Public Policy Analysis, Limited Government, Free Markets, has been a very aggressive promoter of Social Security Privatization. They even registered the domain www.socialSecurity.org, exclusively for the purpose of promoting their agenda on privatization, with the Project on Social Security Choice. The Cato Institute, funded heavily by private individual and corporate donations, along with grants from other neoconservative think tanks, has an annual operating income of seventeen million dollars. The Cato Institute has a heavy influence on the neoconservative agenda, and has an anti-environmental, anti-regulation, pro-corporate stance on many issues. For a in-depth list of criticisms of the Cato Institute, I refer you to Criticisms of the Cato Institute.
(Update: Oops...In a bit of sloppy writing, I forgot to credit my source yesterday. The quote from Investment Dealer Digest actually came from the February 4th episode of the Al Franken Show. If you missed it yesterday, Franken stirred up a little publicity amidst rumors that he would run for the senate in Minnesota in 2006, due to the vacant seat left by Mark Dayton, who will not be running for re-election. Near the end of yesterday's episode, Franken announced that he would not run for senate in 2006, because of his commitment to Air America. Personally, I was both excited and sad about the prospect of Franken--excited, because I believe he could do great things as a progressive voice in the Senate, but sad about the possibility of loosing the Al Franken Show. In the end, Franken did not rule out running in 2008)