Economist Dean Baker is warning Americans that “the IMF is coming for your Social Security.” It’s a scary thought, and my first reaction was to laugh it off. The very idea is absurd: How can the IMF tell the U.S. government what to do? The IMF might be able to intimidate little countries like Jamaica, forcing them to adopt austerity measures that punish the poor, but America?
After all, it was America (and Britain) that created the IMF at that fateful Bretton Woods conference back in 1944, and the IMF has functioned largely as an agency of the U.S. (and UK) government ever since. It’s even based in Washington, DC.
So, at first, I was skeptical that the IMF could bully America the way it bullies other countries, especially Third World countries. But when I stopped to ponder Dean Baker’s warning, the threat didn’t seem so unbelievable, after all. America is in such deep financial trouble and is so irreparably divided that it is in danger of becoming a Third World country.
In the face of the most intransigent opposition from “conservatives,” the Obama Administration has been severely hobbled in its efforts to address the urgent problems bequeathed by eight years of Republican misrule. And with the conservatives apparently determined to pull down the economic structure on top of themselves, Obama is ill equipped to withstand an external assault from the IMF.
Especially since one of the prime Republican targets is Social Security.
Ever since the first Social Security check was issued to Ida May Fuller in the amount of $22.54 on January 31, 1940 (photo above), the program has been under attack by rich and powerful people n America.
It was Franklin Roosevelt’s brainchild. By requiring employees and employers to contribute a share of their wages each payday, FDR created a cushion to soften the economic shock of retirement. Today, it is the largest source of retirement income for all but the wealthiest Americans.
It is this mainstay of us older folks that the IMF wants to slash. The agency has told the Obama administration to raise taxes and reduce Social Security benefits in order to curb the U.S. budget deficit and public debt.
This is not a new message. The IMF has sent the same advisory to other nations – like Turkey, for example. But this time the message is directed at you and me.
I don’t think the IMF is after my Social Security check. It’s very difficult politically to take away benefits that voters already enjoy. I’m pretty sure we geezers will continue to receive our monthly stipend – at least for now.
It’s the younger folks who really need to worry.
I wouldn’t be surprised if the retirement age is pushed back – to something like 70 years old.
And, if the Republicans get their way, the Social Security program would be”privatized,” diverting contributions into the stock market.
It’s also possible that future monthly benefits could be slashed.
The average monthly Social Security check is just under $1,200 a month. Baker points out that by contrast, many IMF economists can begin drawing pensions at age 51 or 52, and they get more than $100,000 a year.
Baker is outraged by the IMF’s “hypocrisy.” He points out:
This means that we have IMF economists, who failed disastrously at their jobs, who can draw six-figure pensions at age 52, telling ordinary workers that they have to take a cut in their $14,000 a year Social Security benefits that they can’t start getting until age 62.
You can read Baker’s article here:
It’s interesting that the IMF doesn’t prescribe a cut in U.S. defense spending instead. Since nearly 60 percent of the American budget goes to the military, you might think the answer to America’s financial crisis would include cutting back on the nation’s runaway arms buildup and the waging of those endless wars.
But, obviously, the military-industrial complex has become so all-powerful in America that such common-sense solutions are out of the question. Even when the alternative is obviously disastrous.