Monday, July 12, 2010

IMF Economists Think We Can Do With A Little Less Social Security

Last week, the IMF told the United States that it needs to start getting its budget deficit down. It put cutting Social Security at the top of the steps that the country should take to achieve deficit reduction. Dean Baker, contributor to the HufPost, calls out the IMF on its hypocritical lecturing on two counts.

First, the IMF deserves a substantial share of the blame for the economic crisis that gave us big deficits in the first place. The IMF is supposed to oversee the operations of the international financial system, but failed miserably in sounding the alarms about the dangers of the real estate bubble in the U.S. While the IMF has no problem warning about retired workers getting too much in Social Security benefits, it apparently could not find its voice when the issue was the junk securities from Goldman Sachs or Citigroup that helped to fuel the housing bubble.

The collapse of this bubble not only sank the world economy, it also destroyed the main source of wealth and savings (home equity) of many near-retirees for whom the IMF wants to cut Social Security.  Maybe the IMF doesn't have access to data on housing prices and wealth, because if they did, it's hard to believe that they would advocate further harm to some of the main victims of their policy failure.

The other reason that the IMF's call for cutting Social Security benefits is infuriating is the incredible hypocrisy involved. The average Social Security benefit is just under $1,200 a month and no one can collect benefits until the age of 62. By contrast, many IMF economists first qualify for retirement benefits in their early 50s.  After turning 51 or 52, these hypocrite economists can begin drawing benefits of more than $100,000 a year.

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.   Shut your f**king trap, bastards!

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