RUSH: Evelyn in Los Angeles, hi. Welcome to the EIB Network. Hi.
CALLER: Hi, Rush. It’s a real honor. I’ve been listening to you since day one in 1988 so I finally decided to call you just because you’ve touched on a topic that’s pretty close to me. I used to work for SSA, and in terms of these new accounts that they’re talking about, it’s been my experience truthfully that, thank God Social Security was not an optional program. Because the people who have really needed to fall back on it wouldn’t have had it to fall back on, had it been up to them.
RUSH: How so?
CALLER: Well, because they don’t — you know, they’re low-income people anyway, for the most part. They become disabled, they do the physical work, and, you know, the people who are retiring now or close to retirement who have had corporate jobs, they’ve got 401(k)s, they’ve got other options available to them anyway. The people who are really going to need this are the people who are still making, you know, $10 an hour, and they’re not going to opt to do anything voluntary, so —
RUSH: So? They’ll still have Social Security.
CALLER: Exactly. Exactly. But I’m saying —
RUSH: All right. So they’re going to be given a choice. If they do opt to go into Social Security, they won’t be able to touch it. They won’t be able to touch it, if they get a disability, there’s other… My gosh, we got enough safety nets or hammocks for whatever malady that happens to you if you’re poor in this country that you can end up falling into and not be wiped out.
RUSH: But you know something? I mean no disrespect, Evelyn, but I, as a citizen — not as a conservative, not as a highly acclaimed political commentator: I as a citizen am growing weary of, “We can’t do it.” I’m growing weary of, “No, we shouldn’t do it.” I’m growing weary of, “Oh, it won’t work.” It’s not the American experience. I hate this immediate reaction. I don’t like it, and then I really don’t like it when it is coupled with it will hurt some group. “We can’t do this because it’s going to hit the women the hardest. We can’t do that because it’s going to hit the poor.” This is not a program that’s designed to help the poor, except in the sense that everybody is retirement poor if all they have is Social Security. There’s nobody in this country who, if all they have is Social Security, is run by the government, could be said to be affluent. They are living Social Security check to Social Security check, and it is not good. It’s not right. There’s nothing magical about the program as it exists. It does provide a subsistence, but the idea that it provides a retirement is a joke. It doesn’t. We don’t have the money for that.
That’s why some of this money needs to be given back. It’s these people’s money in the first place. I don’t care whether they’re poor or whether they’re wealthy. It’s their money that’s being taken from them, and the government’s using it to run all other kinds of programs, ad we’ve had this debate for 16 years. The government’s use of money is as inefficient as it can be. It’s these people’s money, whether they make 10 bucks an hour or whether they make 20 — and the idea that they don’t know what to do with it or that they won’t handle it right means we should scuttle the program for everybody? I’m sorry, I’m losing patience with this. I’m losing patience with everything that we want to do is going to hurt somebody so we can’t do it for anybody. Screw that! That is abjectly un-provable, inaccurate liberal thinking. It’s nothing more than obstructionist thinking. It’s nothing more than we can’t do it. It’s nothing more than we can’t-itis. It’s nothing more than the collective pessimism and doom and gloomism of a bunch of people who ought not be in charge of running anything because if they are, nothing would ever get done.
We are Americans. If there is one thing that ought to stand out above all other things in this country, it is this: We can do whatever we set our minds to, individually, collectively, as cities, towns, neighborhoods or as a country. We’ve done it time and time again. The last two years are a testament to it. Had we listened to the Ted Kennedys of the world and all these elites who said, “It’s impossible to bring democracy to Afghanistan; you can’t reform that country. It’s impossible to do what you want to do in Iraq, especially if you don’t do it with the French and Germans.” What if we’d had somebody that listened to that? “You can’t go track down these terrorists. What do you mean? Why, we can’t stop it unless we guard every port and every airport and get every container coming in inspected,” blah, blah, blah, blah, blah. Frankly, I’m fed up with it and I’m not going to put up with that. I’m not even going to entertain it anymore. People that say we can’t do it, don’t get on this program. Well, you’ll get on the program because I want to help you. But it’s just really frustrating.
This program is designed specifically with low-income people in mind, and keep in mind that the group that we’re going to call low-income, fixed-income, is the Social Security crowd. The people in this country who have nothing but that, you don’t see them out on yachts. You don’t see them on cruises. You see them in their old folks’ homes or in their condos or whatever, and they’re worried about whether they can buy medicine or dog food, I thought. I thought it’s so bad out there, some of them are foregoing food in order to get medicine, and we gave them Medicare benefits, prescription drug benefits, and nobody likes that! Okay. Can’t do that. Now they’re going to be forced to have prescription drugs or over-the-counter drugs and if it’s over-the-counter, “My Medicare won’t pay for it. Oh, woe is me!” No matter how you say all this, no matter what it is, it adds up to one thing: People who have only Social Security don’t have much, and the idea that we’ve got to preserve that, we’ve got to preserve near poverty; we have to preserve near subsistence levels because it’s good if it comes from the government? Well, screw that! And that’s what the program’s all about. You better look at every Social Security recipient only the same way you’re looking at the poor, because they’re the same people.
RUSH: You’ll remember the last caller of the program yesterday we didn’t have enough time with, and I asked for permission for his phone number to get his number so we could call him back, and he granted us permission and we have him. He’s Mike in Albany. Mike, why don’t you start from the top, just assuming nobody heard your call yesterday, so we can get started right from the very beginning point of your point?
CALLER: Yes, sir. I want to start by saying that, you know, after yesterday’s call, I went to this website called the Daily Kos and a lot of people didn’t think you’d call me back. I’m really glad you did. Anyway, I wanted to talk about Social Security, and it’s an insurance plan that was designed and implemented by the greatest generation. You know, 50 years ago. And it’s worked well since then. They took a look around and saw what happened with their parents. They were destitute after the great depression and —
RUSH: Okay. Hang, hang, hang on just a second.
RUSH: I want to go back to that. Do you know that part of FDR’s original proposal was private investment accounts that were not approved?
CALLER: No, that’s interesting.
RUSH: It is.
CALLER: I didn’t know that. I have nothing against private investment accounts. I think 401(k)s and IRAs are great and the last thing I want to do is take that away.
RUSH: No, no, no. Same context here. As part of Social Security, he wanted private accounts as part of the Social Security system which the Congress did not approve in the final write of the bill.
CALLER: I would have liked to have — well, they probably heard the same arguments that I’m about to make with you. I mean, it’s not like it hasn’t changed over the years. Ronald Reagan doubled the Social Security tax in 1983, for example.
CALLER: I’m not saying it doesn’t need to change.
CALLER: I’m just thinking that we’ve got enough grandmothers playing slots in Vegas. We don’t need them day trading too. Instead, try this, repeal that Reagan tax increase and make sure that trial lawyers and the Hollywood left and basketball players and all these people are taxed at the same rate I get taxed at. There’s no reason these rich people, you know, the Michael Moores of the world, are paying 0.01% in Social Security tax when I have to pay six or 12% or whatever it is. Make everyone pay an equal 3%, give the vast majority of Americans a tax break, and honor our parents by guaranteeing Social Security and making sure that no one’s going to have to be old and poor.
RUSH: Well, my point is that everybody is old and poor if all they have is Social Security.
CALLER: I agree with that, but they’re not eating cat food.
RUSH: Well, I’m not the one that’s ever made the assertion but I’m listening to all their advocates say that the choice is dog food or medicine because their Social Security checks are so insufficient these days. Now, look, I too did some research out there, and in fact, one of the best pieces of research is the New York Times today, a story by Edmund Andrews and there are two basic points in it. Number one, means testing, which is a — You haven’t suggested means testing.
CALLER: I did yesterday, though.
RUSH: Well, okay. You did yesterday, and your proposal that you just mentioned is somewhat close to it. In other words, the people who can pay the more should pay the more.
CALLER: Well, no, just a flat tax. Everyone pays equally.
RUSH: Yeah. But the dollars are not the same, see. You’re looking for this same percentage, but the point is that you’re turning Social Security into a welfare program, which it never was. It was never intended to be a welfare program. When you start taxing it as Medicare is, then you’ve turned it into a welfare program and what you were essentially doing is changing the whole structure. You were saying that Social Security is not paid for by the recipient, Social Security is paid for by one citizen or a group of citizens giving a gift to another. That’s the program that you were suggesting.
CALLER: I will concede that, but let me make the case for that, because you know what? These basketball players and Michael Moore and all these people that were born in this country, made a lot of money because of their talents, but they made a lot of money for a lot of other reasons too. You don’t see a lot of basketball players in China or North Korea making $5 million a year.
RUSH: I don’t care. I don’t care.
CALLER: They do it —
RUSH: I don’t care what people in China or Europe or Germany make. It’s irrelevant, and I don’t care what people in —
CALLER: Well, it’s not irrelevant to how great this country is. The reason they can do that is because this country is great and because this country has people like me that watch and play basketball and stuff like that or go to the Michael Moore movies or whatever.
CALLER: So they could pay a little bit more to provide —
RUSH: Well, where does this stop?
CALLER: — to the grandmothers that starve otherwise.
RUSH: Since I’ve been an adult, the solution to every problem has been I pay more. The solution to every problem has been some Americans pay more. That’s the liberal solution to everything, and you’re going to cause an economic slowdown like the world has never seen if this program taps out the way you want it to. One of the statistics in this number, or in this story in the New York Times, is that means testing on the wealthy will not save it. There aren’t enough of the wealthy to make a difference. Means testing would be allowing those who don’t need it, quote-unquote, to opt out of it, even though they’ve paid into it, which they aren’t enough to save the program in that regard, and even if you raise the floor from the current $90,000 to $200,000 of income on which Social Security taxes are paid, you would basically wipe out the deficit in one year. But you wouldn’t wipe it out forever. You’d just wipe out the deficit in one year. There simply isn’t the money. There are too many recipients in this program. I have a different question here, and I don’t think Social Security should become a welfare program. That’s not what it was ever intended to be.
It was intended that you have money taken away from you and at your retirement, you get it back. It was a Ponzi scheme and the first represents, of course there’s nothing they could “get back” because they hadn’t paid anything in, so at first it took 16 workers to provide the taxes for one recipient, back when this program started. We’re down to three now, and people wonder why the benefits don’t go up enough. It’s because we don’t have the tax base to support it. Now, I am tempted to give you a number, because I would fit into this category of people that you’re talking about that ought to be paying more. You think that my Social Security and Medicare taxes are not high enough because I somehow opt out at this $90,000 salary. I don’t get a salary, but you think that people like me don’t pay Social Security beyond $90,000. For the sake of this discussion, I’m tempted to tell you what my accountant just told me my Social Security and Medicare payment this year is going to be and I’m not going to do it. I’m not going to do it because you just don’t discuss these things — (interruption) But what do you mean, “ban an obscenity”? No, it won’t violate a ban on obscenity. It’s not the way to make the case because it would be too personal.
I’ll just tell you this: It’s almost seven figures. What I’m going to pay in Social Security and Medicare taxes this year, Mike, are close to seven figures. That’s what I’m going to pay in Social Security and Medicare taxes combined. It’s that way almost every year, give or take a little fluctuation here. It’s almost seven figures. So you can understand my reticence here when I hear all this talk about how X numbers of people aren’t paying enough and we can always pay more, and the argument that, “Well, look what you’re left with even afterwards,” doesn’t hold any water with me, because even at this amount, I’m told I’m not paying enough and I don’t get any thanks for it in the first place. Now you want to turn this program into what Medicare is: a gift. One group of Americans can demand whatever they want from another group, and that group is supposed to pay up. That doesn’t jibe. That’s not how this program works. It’s not how it was designed. We’re reforming welfare in this country because it didn’t work, because it created a bunch of lazy malcontents who had no initiative. It was destroying their lives.
Welfare destroyed people’s lives. If people grow up thinking that they don’t have to do anything toward their own retirement, that all they have to do is get to 60 or 65 and hold their hands out because Michael Moore is going to be paying for it, what the hell will they be making of the first part of their lives where they have no incentive to work for their own retirement? You know, the welfare problem is it takes incentive out of everybody that’s on the receiving end of it. It destroys them. It destroys their opportunity to be the best they can be. It destroys their potential. It tells them they don’t have to do anything; all they have to do is survive to a certain age and voila, whatever they want is going to be there because the testament will have been established. The precedent will be established. All you got to do is ask for more on the basis that it’s not fair that other people have more than I do, and I’m going to get those people who have more than I do to contribute to me because it’s unfair. We’re reforming that way of doing things in this country and we started to with the signature of Bill Clinton after three vetoes in 1996, and it is working, and the last thing we want to do is turn back the hands of the clock and go back to that same disincentived welfare program and make that what Social Security is. That’s not the purpose. This is an ownership society.
The percentage of adults in this country that own stocks and bonds is over 50% now, and I can understand people on the left wanting to turn that away and turn that backwards. I can understand people wanting, the left in this country to want a lot of people who are currently in more control of their finances and lives than ever to lose some of that control for the government to get it back. Because liberals have nothing if they don’t have a big government and a growing government and a government in which they’re in charge and control of, because the only way, Mike, you’re going to be able to go get more money from the Michael Moores and the Magic Johnsons and whoever else you want to get it from is if you run the government and can pass the legislation and laws that will steal it from them just on some basis that somebody doesn’t have as much. Well, we’re getting rid of that kind of thinking in this country. We just booted it out of the football field. It’s not even a ball that we’re playing with anymore. That kind of thinking is for history textbooks only. Now, I know that there’s… By the way, Mike is not the only one with this idea.
There are members of Congress who want to raise the floor on Social Security to 200 grand, meaning that everybody that makes 200 grand and pays Social Security taxes, as opposed to 90 grand now, but they do this in opposition to the president’s program. They’re trying to create a welfare plan out of Social Security, and that’s not where the thinking is in this country. Another thing, folks, that I want to pose to you right now in the context of current events. Imagine that there is no Social Security program right now. Just imagine there isn’t one. Don’t imagine anything else yet. Just assume there’s not a Social Security program. Just imagine right now that people’s retirement is whatever they’ve saved, and in George Bush’s State of the Union address on Wednesday night, he proposed a Social Security program. Either the one he proposed or the FDR version. Would a single liberal today support it? The anti-reform crowd — and that’s who the American left is today — is going to fill your head with fear, with numbers, with photo ops, with columns, with talking heads that try to prevent progress no matter where it is suggested, and they’re going to go surround that FDR statue with their buddies from the media and try to send the picture out to convince you that somehow, holding onto a 70-year-old program that’s never been modernized is worth it.
Well, before you buy any of the anti-reform crowd’s pessimism, ask yourself the question: If there were no Social Security program today and George Bush had proposed one, would a single liberal support it? No. There is no way a single liberal would support a Social Security program today if there wasn’t one. Two counts: The liberals in the media would say no to anything George Bush proposed, and the unfunded structure of the plan — i.e., the Ponzi scheme — would be exposed and vilified by the Kennedy’s and the Krugmans. If this program were proposed today exactly it was in 1933, the biggest opponents of it would be on the left, on the basis of its unfairness and on the basis that it’s going to end up creating people, “who have only that for their retirement? How unfair is that? Those people are going to be living in poverty. They’re only going to get a check from the government twice a month when they’re 60, 65, whatever it is and it’s going to be X amount? That’s not fair.” This plan wouldn’t see the light of day, the FDR plan, if it were proposed today, if we didn’t have one, for those two reasons. I mean, even beyond liberals, would any Democrats support a George Bush Social Security plan? Harry Reid, Barbara Boxer, Chuck Schumer, Pelosi, Durbin, Leahy, Hillary?
If there were no Social Security plan and George Bush proposed it, would a single liberal support it? No. For the very reasons I’ve given you, and it’s important that you remember this because you’re going to be hit with more focus group sound bites and more photo ops and more fear mongering and more demagoguery than at any time in history over this program because that’s desperately needed by the left to hold onto because if this gets changed and reformed, their identity goes with it. So they’re going to oppose anything he supports or proposes, including if he supported the FDR plan where we didn’t have a plan today. I mean, the fact that those clowns went and gathered around that sculpture of FDR is proof positive what they’re trying to do. They’re trying to promote an age-old legacy that has not been reformed in 70-plus years that is broken, that even they all agreed back in 1999 was broken, and now it’s not a crisis. To those of you who realize we no longer live in the 1930s, I remind you of the president’s eloquent presentation of the problem. Very simple: We got more seniors; we have seniors living longer; we have more benefits being paid out today than ever. It’s still the payout to each recipient is nothing anybody would say that’s what they want their retirement to be. That’s what’s so confounded silly about this. Nobody, if you give them: Hey, do you want $1,400 a month when you retire or $2,500 a month? You got to pay taxes on it. Is that what you want when you retire? That’s all you get. “Hell, no, man! I don’t want that!” Well, that’s what the program is going to give you. Everybody in it is complaining, if that’s all they’ve got, is complaining about it. It started out 16 workers paid the taxes to support one retiree. We’re down to there. Somebody want to tell me this is a program worth saving?
RUSH: Not even FDR himself wanted the taint of welfare on his brilliant scheme of Social Security. You know, folks too many people look at this as an employment tax. “Well, I pay whatever percentage and my employer matches it. It’s a FICA. It’s my employment tax.” That’s the dishonest side of the scheme. Had there been individual accounts and ownership of those accounts from the get-go, you would end up benefiting. You’d be benefiting from forced saving of 6-1/4% of your salary, matched by your employer, who would contribute another 6-1/4% — and in this case, it would be an employer match, because you’d be getting that 6.4%. You’d be investing it, instead of it all going to the government. Then the employer would match it and send that 6.4% to the government, or 6 1/4%. That would be a much better deal and a much more honest deal. But if you look at this as an employment tax, you know, that’s the first part of the scheme that’s got you all fooled and has had everybody fooled, I mean, since this Ponzi scheme got started in the first place. If personal accounts had been part of this from the get-go, there may not have ever been the need for a IRA. Why do you think these IRAs and Keoughs got developed, folks? It’s because people weren’t saving for their own retirement and Social Security wasn’t enough, so some congressman came up with the idea — what was his name on the 401(k), I forget his name. Came up with the idea to let people put some of their own money aside to supplement their Social Security because everybody knew it wasn’t enough. This is all such a crock. There’s 50 to 70 years of — I’m having a mental block on the term on this. “Brainwashing” is not the term I want but it’s close to that. It’s a 70-year mind-set that’s has to be altered and changed.
RUSH: Now, I got one more thing on this Social Security business. Apparently some people misunderstood what I said when recently discussing the program. I never said that the first recipients didn’t get any benefits. What I said was the first recipients didn’t pay into the system or very much. The first recipients of Social Security were pretty much near retirement age or were at retirement age when FDR introduced the program. They were the real, true beneficiaries of this program. That’s when it took 16 workers to pay the taxes for those people that had not put anything in the system. Now, even though some people have misunderstood this, let’s tell you about the first recipient. Ida May Fuller. “On January 31st, 1940, the first monthly retirement check was issued to Ida May Fuller in Vermont. The first monthly check she got was $22.54. She was a legal secretary. She retired in November of 1939, so basically she got her benefits within 60 days of her retirement. She started collecting benefits in January 1940 at age 65. She lived to be 100 years old, dying in 1975. Ida May Fuller worked for three years under the Social Security program.
“The accumulated taxes on her salary during those three years was a total of $24.75. Her initial monthly check was $22.54. During her lifetime, she collected a total of $22,888 in Social Security benefits, paying in $24.75.” Now, it was a deal for Ida May Fuller and that’s just how Ponzi schemes work! The first participants get huge payouts. That’s the lure to suck everybody else in. Of course in this case, the people had no choice. Their taxes were, you know, after World War II, this stuff was all withheld because that’s when withholding started was during World War II, and it proved so miraculously favorable to the government that they never rescinded the withholding law and that’s how it got started. I never said that the first recipients didn’t get any benefits. What sense would that make? The recipient is a beneficiary. You know, I work really hard here for you people not to listen carefully. I say what I mean. I mean what I say, and I love hearing myself say it when I say it. Now, I’ve just had to spend three minutes here cleaning up on the part of people who didn’t hear what I actually said. They only heard what they wanted to hear me say because they think I make mistakes, but I don’t.
You know, folks, I’m sitting here, I’m thinking of a new approach on Social Security. I’m thinking of joining the left. I’m thinking of just agreeing with our friends on the left and doing nothing. Let’s just don’t do anything, and let’s let the program blow up, implode, and go defunct, and then we’re rid of it! Yeah, let’s just get rid of Social Security. Let’s just not do anything and get rid of the program. (Laughter). Now, don’t panic in there, Mr. Snerdley. I’m just making a point. Agree with the left, don’t do anything, and let the program go under. We got too many government programs as it is. Don’t you agree with that? All right. All right. Nothing else needs to be said.