A Vicious Assault on Retirees
There is no other way to describe the machinations in DC today. The median Social Security benefit is $1229. The median net worth of retirees is about $160K, including home equity according to the 2010 Survey of Consumer Finances.Any cut to the Social Security benefit is going to damage these average people seriously, and it’s worse for the people below the medians. But that isn’t the whole picture. The original idea behind Social Security was that it would be just of part of retirement, along with employer pensions and personal savings. As the graphic shows, the pension plan has gone the way of the Dodo.
Now think for a moment about the people above that median. These are the people who saved money to fund their retirement, and have some assets. They get no interest income, thanks the to the Fed and its zero interest rate policy (ZIRP). There has been precious little income from savings for the last few years, and the Fed promises that there won’t be any in the foreseeable future. That means that people are being forced to eat up their savings, or to put it with the wolves of Wall Street.
We aren’t talking about pocket change, either. For people in the 75-90 percentile range, the mean net worth in 2010 was $525K, down from $616K in 2007. The mean value of financial assets held by this group was $233K, down from $254K in 2007. That isn’t all that much money to last 20 or thirty years. ZIRP means that savers get screwed. Bloomberg reports that ZIRP is helping the rich and screwing everyone else, quoting Joseph Stiglitz: “Monetary policy has been indirectly, surreptitiously helping the top and hurting the bottom.” It describes a semi-retired college librarian:
…when he first started an annuity in 2005, his interest rate was 5.25 percent. Now it’s 2 percent, he said. That means that instead of getting a monthly payout of $700, he gets $413.
In the face of the horrible damage inflicted on all segments of the population by the richest Americans, aided by an ideologically insane party and a spineless party, President Obama and the rest of the Washington Elite insist on slapping retirees with Social Security cuts via the Chained CPI, and cuts to Medicare and Medicaid, to go with the demand that they eat up their savings or reduce their standard of living.
There is no excuse for this vicious assault on the retirement plans of millions of Americans. And there is no other way to describe it. It is a horrible and mean-spirited attack on every American except a few hyper-rich people.