Social Security: The War Begins Tuesday, And You Better Say…Oh, No!

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It is my job to bring to you not just the news that took place, but the news that has yet to happen.

Today, that’s exactly what we have.

There is a war coming to try to change Social Security from a social safety net to a “revenue stream” for certain corporate interests, and that war is set to begin Tuesday morning, according to information that was provided to me yesterday afternoon.

Follow along, and you’ll be both forewarned and forearmed.







–Actual “Burma Shave” Message, 1945, from Verse By The Side of the Road, Frank Rowsome, Jr.

So here’s the dish: a limited partnership corporation called The Blackstone Group, through years of trading in real estate, operating hedge funds, giving financial advice to other companies and governments, and buying and selling companies (Hilton Hotels is one of theirs, the company that makes Corexit, the oil dispersant, is another), made its co-founder and former Chairman Peter G. Peterson a more-than-billionaire; a billion of that went to endow a Foundation that bears his name.

The Foundation has a particular interest in things budgetary and governmental, and they are seen as one of the groups most looking to change the way Social Security works today.

(Change, you say? Indeed, and if you’ve been following this series of stories, you already have an idea of what that might entail.)

The next thing you need to know is that there is a Great Big Deal Presidential Commission currently at work who is charged with identifying…

“…policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. This result is projected to stabilize the debt-to-GDP ratio at an acceptable level once the economy recovers. The magnitude and timing of the policy measures necessary to achieve this goal are subject to considerable uncertainty and will depend on the evolution of the economy. In addition, the Commission shall propose recommendations that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government.”

…and that the Commission is going to deliver a report with its suggestions December 1st.

It would be fair to say that there are those who are concerned that “the fix is in”, so to speak, and that the report will be the beginning of an effort to privatize Social Security…and guess what?

Managing the Federal Government’s Social Security money, for a handsome fee, would be a spectacular business opportunity for Pete Peterson and The Blackstone Group, and to help create the environment where that can happen, the Peterson Foundation is dropping $20 million on a TV ad campaign to try to convince you to get interested in privatizing Social Security, too.

This Tuesday morning, November 9th, Peterson will appear at Washington, DC’s Newseum to unveil the advertising campaign, presumably to the delight of the assembled throng and the sipping of the coffee of the assembled media; this according to a Peterson Foundation press release that came across my desk yesterday.

There’s even a catchy name for the reform program: “OweNo”…and if you’ve already written your own “Oh, No!” Social Security joke, you’re apparently a bit faster on your feet than the guy who tried to sell Chevy Novas in Spanish-speaking countries…or the folks who came up with this catch phrase.

So that’s the story: come Tuesday, Pete Peterson, with a presonal fortune that comes from a Big Fat Wall Street Firm That Would Love To Manage Your Money For Big Fat Fees, is dropping $20 million to tell you that it’s time to “get a Chilean“…and I’m here to tell you that such a procedure is going to hurt your wallet, a lot-and when it’s all over, you’re the one who’s going to be saying “Oh, No!”

FULL DISCLOSURE: This post was written with the support of the CAF State Blogger’s Network Project.

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  1. …and the way to win is to begin hitting first…so let’s get to it, folks.

  2. …et al tomorrow and tell them, “Oh No!”

    One more time. Try again.

  3. when Obama put Erskine Bowles and Alice Rivlin on the commission as the top-dog “liberals” he knew that it would deliver the purest neoliberal agenda in captivity.  Suggesting that public response will matter is itself disingenuous at best.  With Obama and the Power Centrist elite working in tandem with the Tea Party, any sustained oppostion will be marginalized to silence in rather short order.

  4. the money to pay for real wars. It certainly has been a ‘revenue stream’ since then.  

  5. …and other New Deal policies started as soon as FDR put them through.  The money people back then called FDR “That Man”!!  They couldn’t wait to reverse the New Deal.

    It took them a while, but they’ve got the goal in sight.

    • Xanthe on November 7, 2010 at 5:21 pm

    states to opt out of SS system.

    I don’t know what to say.  I got nuthin anymore.

    • Xanthe on November 7, 2010 at 7:00 pm

    David Cote, CEO of Honeywell and a member of the Debt Commission, is travelling with The One in India.  And here my friends is a quote from David Cote:

    Both sides need to work together, said Cote, we have a big issue confronting us as a country when we look at the national debt.

    As well there are other CEOs travelling with Obama.

    Am we paying for their goddamn trip?  

  6. the Debt Commission will announce its findings!

    Seems we could and should do a lotta’ screaming right NOW!

  7. by surrendering a portion of our social security money to the private sector, they will increase our wealth. Even though we would likely be charged as if the fund were actively managed, it would be so large that it would, of necessity, be nothing more than a gargantuan index fund, only with higher costs for slicker brochures and reduced values. Its size would be such that purchasing a meaningful position in a small-cap or medium-cap security, which holds far more potential for significant appreciation, would be an impossibility.  

    For example, an index fund run by a well known no-load mutual fund company has annual expenses than run approximately .15% of assets, which compares with an average expense ratio of 1.36% for an actively managed large-cap fund.

    Realizing that any set of assumptions may present its limitations, please consider that if someone begins working at the age of 22, making $50,000 in constant purchasing power for the next 45 years, with an annual rate of return of 6%, the nest egg from which social security disbursements would be derived, assuming that these contributions could be sequestered, would amount to $1,433,500.  

    Now if a financial services company, in order to pay its Board of Directors, CEO, lobbying, etc. takes an additional 1% for its management fee, all else being equal, the annual rate of return would be 5%.  The final net egg at the age of 67:  $1,052,019.  

    So where is the missing $381,481.00? Answer:  It has disappeared into the pockets of the financial firm(s) that has best bribed the governmental leaders in order to exclusively handle your social security retirement funds.  

    The obvious question remains — will you receive a “Thank You” card in the mail from the likes of Goldman Sachs or one of their clones for the privilege of raiding your retirement account?

  8. exclusive function to act as a police force for the bankers. The obligations of our nation state, for example, to its own people will slowly be perceived as (Reagan would call it) a giant transfer payment of wealth accrued by the legitimate, deserving participants in the world economy. In order to tap into the big markets of China, India, Brazil etc., the temptation to transform social obligations of government into private capital is too seductive. What would have been considered taboo just 20 short years ago is now talked about in “the open”: The problem is that “the open” is now a manipulated stage with smoke bombs and mirrors. And Obama is the best special effects yet.  

  9. I find it had to contain my anger when speaking of this subject.

    Social Security/Medicare is the ONLY constant in the lives of Americans.  It is a bedrock for those (and that would most) Americans who, during their lifetime of work and FICA contributions, could not amass an adequate amount of funds for retirement.  And as the disparity of wages between the so-called “middle-class” and the Ceos has grown so great, just in the last 10 to 15 years alone, the stagnation of wages has rendered it next to impossible to garner sufficient funds for retirement.  When considering the many benefits that other western civilizations provide their citizens through taxation, etc., the U.S. offers little to its citizens, who work hard over a lifetime and pay their FICA and all taxes.  These FICA funds are paid into by us and our employer(s) over our working life.

    The FICA funds are separate trust and the government is to act as a fiduciary.  Of course, we know the government has been “dipping” into our funds for a long time and leaving their IOU’s, which are becoming due by them to the Funds — about $2.5 or more trillion dollars.

    But since when does the government have the right to even put our FICA funds under consideration for whatever manipulation of them that it may have in mind?  Since these monies DON’T BELONG to the government, on what premise can the government even place the Funds under its scrutinization for its disposition?  

    People need to be made to understand that the manner in which “fiscal responsibility” and “entitlement reform” is being handled (propagandized) makes it seem as though those monies are handouts to the elderly, disabled, etc. It’s disgusting the guise under which our FICA entitlements have been portrayed.  WE CAN FIX THAT, IF WE BECOME VOCAL ENOUGH!!!!!


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