The War on Social Security: How the Rich Warp the Political System (It’s Blackrock, Stupid)

John Cole asks a good question about the opposition to Social Security:

Why our elites and media elites have such sheer contempt and hatred for social security. It’s there for everyone! It’s a solid government program which gives everyone the peace of mind that no matter what, there will be some money available for you to take care of yourself in your most vulnerable years. It’s such a miniscule portion of the taxes we pay, and for the ultra-rich screamers who hate social security the most, it’s a negligible portion of their income, and it’s capped! It’s not money wasted on fraud and abuse, it’s extremely efficient with the kind of overhead any charity or organization in the world would die to achieve, and it’s just an amazing program.

While Dave Johnson discusses why opposition to Social Security exists among those who would benefit by it (“They hate it because it works; Social Security is proof that government is capable and competent. That is why it MUST be destroyed.”), it doesn’t get at the question John Cole (or Peter Dorman) raise–why does this idiocy continue to exist among the chattering classes, when the ‘crisis’ is a bullshit one?

The answer is that the opposition to Social Security has been funded in perpetuity by those who would profit from privatization. Not only do they engage in propaganda aimed at the wider public, but they have a disproportionate influence in the think tank world (and when you’re rich, you can throw a really nice spread). There are quite a few pundits and think tank types who profit from this.

Let’s give this influence a name–Pete Peterson:

…perhaps Peterson et alia are just fucking morons who suck at public policy? Let’s follow the money some more (boldface mine):

Political analyst Jim Capo discusses a slide show presentation given by Walker after the “I.O.USA.” premier [a movie backed by the Peterson Foundation about how our debt makes us DOOMED!], in which a mandatory savings plan was proposed that would be modeled on the Federal Thrift Savings Plan (FSP). Capo comments:

“The FSP, available for federal employees like congressional staff workers, has over $200 billion of assets (on paper anyway). About half these assets are in special non-negotiable US Treasury notes issued especially for the FSP scheme. The other half are invested in stocks, bonds and other securities…. The nearly $100 billion in [this] half of the plan is managed by Blackrock Financial. And, yes, shock, Blackrock Financial is a creation of Mr. Peterson’s Blackstone Group. In fact, the FSP and Blackstone were birthed almost as a matched set. It’s tough to fail when you form an investment management company at the same time you can gain the contract that directs a percentage of the Federal government payroll into your hands.”

To put this in context, currently the annual Social Security revenues are over $700 billion. If, between rerouting money and increasing payroll taxes (cat food for all!), $350 billion could easily be diverted to firms like Blackrock. Even if Peterson’s company only gets part of that, he earns back his billion (which was tax-deductible of course) pretty quickly. And then makesextracts a killing.

I’m certain that Peterson is a high-minded patriot concerned only about the fiscal health of our country (never mind that current deficits aren’t the terrifying problem he claims they are), but this is a massive conflict of interest.

And it should tell you what the real motivations of the ‘fiscal responsibility’ crowd are: protecting Wall Street and the wealthy at the expense of most Americans.

Peterson et alia stand to make a ton of guaranteed money if they were allowed to manage everyone’s retirement savings (at least the Social Security part of it).

That’s why this will never go away–they can’t afford to let it.

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