Posted on 02/18/2005 12:46:21 PM PST by Jean S
The AARP claims to represent us seniors, but more often it just lectures us relentlessly. One such sermon in the AARP Bulletin, opposing any addition of choice and ownership to Social Security, boasted that "groups like AARP that oppose (privatization) will spend millions of dollars to sway opinion." Apparently, it plans to waste thousands of words, too, and without much concern about accuracy.
When it is not trying to sway our opinion against the White House, AARP tries equally hard to sell us various financial services, in exchange for big kickbacks. The latest AARP Magazine contains a record number of annoying insert ads that fall on the floor when you pick it up. They advertise, among other things, AARP Auto Insurance from The Hartford, AARP Life Insurance from New York Life, AARP health insurance from United Health Care and mediocre mutual funds from Scudder. If Eliot Spitzer is still obsessing about "conflict of interest," perhaps he should take a look.
AARP Magazine features "Myths and Truths About Social Security" by "the magazine's Social Security expert" Karen Westerberg Reyes. I was not surprised to find their expert audaciously redefining truths as myths and myths as truths.
Even the undeniable truth that "private accounts will give individuals more control" is magically redefined as a myth. Why? Because "people already have control over their money when they invest in private pensions, IRAs and 401(k) plans." Well, some people have employer-provided pensions, but most do not. Many could invest in an IRA, but people need to save for other reasons (such as the kids' college or down payment on a home).
It is difficult to save much after 12.4 percent of their paychecks go into a Social Security slush fund to be distributed in ways politicians find politically expedient. Unlike any personal savings, individuals have zero control over Social Security. They can't even draw it down more quickly if facing a terminal illness. And they get nothing if they die early.
AARP takes the easily demonstrable truth that "individuals will get higher returns with private accounts" and somehow redefines it as a myth without mentioning a single fact. Since 1900, the average return on stocks was 6.3 percent a year, according to the Bridgewater Group, but only 1.4 percent on U.S. bonds. Rather than mentioning such bothersome facts, the author alleged: "In the current Social Security system, the risk is near zero. ... That's because U.S. Treasury bonds don't crash when the stock market does." That statement condensed several myths into just two sentences.
Anyone who tells young people there is "near zero risk" of getting a very bad deal from Social Security is a sham fortuneteller. The future return will depend on the payroll tax, the age at which benefits are paid, the formula for determining benefits and the way benefits are taxed. All four variables have been changed many times -- always in the direction of making younger people pay more and get less -- and much tighter squeezes are being proposed as ways to "save" Social Security (at the expense of younger Americans).
Social Security never guaranteed anyone anything. To prove that point, AARP advocates what the author mythologizes as "small adjustments" or "a tune-up." In truth, these "adjustments" involve raising taxes and reducing benefits, thus reducing the return. Nobody knows whose taxes will be raised the most and whose returns will be cut, so the political risk from Social Security is far more unpredictable than the market risk of investing in a balanced mutual fund. The risk of a negative return on Social Security taxes is extremely high for younger college-educated people who work too many years and save too much money, because they will be said to be able to "afford" higher taxes and to not "need" the benefits.
The AARP writer's second big myth was saying the reason Social Security risk is near zero is "because U.S. Treasury bonds don't crash when the stock market does." That statement is a mixture of myths within myths.
Nearly all Social Security taxes fund an immediate transfer payment from workers to pensioners. True, the ephemeral surplus will collect a little interest income for a few more years, but the amounts are trivial compared to payroll taxes.
The claim that Treasury bonds do not crash "when the stock market does" implies a dangerous myth -- that Treasury bonds have never crashed. In reality, the value of bonds goes down whenever interest rates go up. The yield on 10-year Treasuries rose from 6.2 percent in 1971 to 13.9 percent in 1981, for example, so Treasury bonds lost about half their nominal value at a time of high inflation.
In any event, the comparison between stocks and bonds is invalid because those choosing personal accounts would be allowed to invest in Treasury bonds, while Social Security will soon be too broke to do so.
Other so-called myths rely on such unbiased sources as New York Rep. Charlie Rangel, former Clinton official Peter Orszag and some indecipherable gibberish from gadfly Barbara Kennelly.
Readers are told Social Security "is in better shape today" than ever. But nobody claimed the central problem -- that the number of seniors will double in three decades -- had anything to do with "today." AARP sees no problem because "workers today are more productive, earn higher wages and plan to stay in the workforce longer -- all factors that will help fill the future gap." That is a devious way of saying today's young people can afford to pay higher taxes and they won't need benefits because they'll just keep working. That may not sway the opinion of young people. It won't help fill the gap, either, because all those factors were taken into account when estimating that gap.
Don't worry, says AARP, because in 2042 "the system will still bring in enough revenue to pay nearly 75 percent of benefit amounts." Those who plan on retiring at that time may not be swayed by AARP's insistence they won't need private accounts to offset a cut in benefits that just begins at 27 percent in 2042, with deeper cuts in following years.
In excusing such blatantly one-sided propaganda, AARP claims to "gather members' ideas from phone calls, letters (and) emails." Yet it has never gone out of its way to gather my ideas, and may have neglected yours, too. If anyone wants to offer them some better-informed ideas, AARP's address is 601 E. Street NW, Washington, D.C. 20049. Its phone is (888) 687-2277, and its website is www.aarp.org.
Meanwhile, it's time for older people who care about their kids and grandkids to mail back their AARP cards to the address above, and to boycott products and financial services advertised by this big-spending propaganda shop. Enough is enough. In fact, it's too much.
I dropped out of AARP 10 years ago.
A woman at work,also a member, had a problem and called them for assistance. She got no help and was dealt with in such a brusque manner that we both dropped our memberships.
bump
Supposedly has gotten millions (I want to say a billion) of dollars of tax money in twenty years.
They live and support big government.
Try usanext.org ... you'll be pleasantly surprised. ;)
I am now 68 years of age and dropped out of AARP back during the "Hillary Health Care" debacle. When they came out in support of Hillary and her health care idea without even consulting their membership, I wrote them a nasty letter and rescinded my membership. Haven't heard from that bunch since. Good riddance!!
While condemning GW's plan, AARP on other side of its lying mouth pushes 38 not that good Scudder mutual funds.
http://www.freerepublic.com/perl/mail-view?m=4035070&mbx=inbox
AARP's duplicity with Scudder
The link below shows the incredible two faced lies by AARP. This link takes us to the AARP/Scudder investment site.
At this link there 38 Scudder Mutual Funds approved by AARP.
If investing in the stock market was so dangerous, why does AARP lend its name to Scudder for these 38 funds and have a joint web site?
http://aarp.scudder.com/aipt/index.jhtml?content=/aipt/funds/facts/index.jhtml
Please send this to your email lists and any organization which stands against AARP re social security reform.
http://aarp.scudder.com/aipt/index.jhtml?content=/aipt/funds/facts/index.jhtml
If you know anyone who owns the funds, you might want to suggest they sell the funds and send the AARP scare stance to the fund managers and CEO of Scudders.
http://aarp.scudder.com/aipt/index.jhtml?content=/aipt/funds/facts/index.jhtml
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Several things about America have gone awry, and AARP is one of them. They have learned that demegoguery works on old people, so they have become the rabid junkyard dog of the Democracks. I despise few things on earth as much as I do AARP. I am retired from one career and on the glide path to retirement from another; but they don't speak for me. All they do is foment generational warfare. What fools! As soon as the youngsters realize that war is being made on them, they are going to kick some senior ass -- and it will be the fault of the AARP and the Democracks -- part of the axis of weevils.
Check out www.usanext.org for THE Conservative Alternative to the AARP!
It is a much better organization than AARP.
Which is more socialism.. AARP is a Multi-BILLion dollar, for profit, business.. thats gets multi-millions of federal government aid.. that pays to lobby for even MORE aid..
AARP is a TRUE american ENEMY... to the republic..
I got polled recently about Social Security; about midway through it became obvious that the sponsor was AARP.
Haven't had as much fun skewering an organization in a LONG time.
The only good thing about AARP is that they frequently send me requests for me to join. In the package is a postage paid envelope.
I enjoy sticking as much trash as I can into the envelope and mailing it back to AARP.
tell your Republican congresscritters to support diverting money the portion of Social Security to the Thrift Savings Plan that members of Congress and Federal Employees have available to them.
It has 5 investment choices with a t bill fund, s & P 500 fund, wilshire 5000 fund, an international fund, and a small cap fund. Someone should be able to do a FOIA request to see how the members of Congress opposing the plan are doing.
It is a plan with a track record with a current bureaucracy already set up, and the pubs could call up federal employees and ask them what they think of the program. If the like the program the dems will try to bash them. If they don't you could ask why are you participating and should we eliminate it.
I believe the program started in 1983 and I'm sure Senators and Congressmen have done great since the Dow was at 900 at the time.
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