Wall Street’s Third Way Absurdly Wrong About Sanders’ Social Security Plan


The Huffington Post has the article Wall Street’s Third Way Absurdly Wrong About Sanders’ Social Security Plan. Maked Capitalism comments on this article in their article titled Third Way Misleads Hard in a Weak Effort to Discredit Social Security Expansion.

Read the rest of this post to understand the magnitude of the deception that Third Way is pushing.

The Naked Capitalism article said:

As Altman goes on to point out, Third Way isn’t even playing straight on the benefit side, to say nothing of ignoring the tax side. The report breaks beneficiaries into quintiles based on average lifetime income.

This made me suspicious that Third Way was using a particularly egregious ploy that few people will understand the depth of the deception unless they think about it a little more deeply.

I went to the original article to see if it was more explicit about this trick. There is a section in that original article:

The only way to even plausibly make the case that the Sanders proposal disproportionately favors the rich is to obscure the facts.
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Instead of using dollar figures to analyze to whom the new benefits go, the report refers to “quintiles.”

This does not clarify my point. I will see what I can do to clarify the point. The headline in the Politifact article Bernie Sanders, in Madison, claims top 0.1% of Americans have almost as much wealth as bottom 90% is a good starting point for my explanation.

These numbers can be converted into another way to look at the wealth imbalance per capita. Per capita, the top 0.1% have almost 900 times the wealth that the per capita bottom 90% have. This multiplier of 900 is only for an equal distribution of total wealth between the top 0.1% and the bottom 90%. There is no upper limit on the ratio of what the top can have compared to the bottom. As more and more of the wealth gets concentrated at the top, the multiplier goes up without limit.

This is decidedly not the case when you talk about money received from Social Security in retirement. The top payment from Social Security does not go up without limit. The ratio between the top payment and the minimum payment does not go up without limit. Even if the top payment were 10 times higher (I think an overestimate) than the minimum payment and all the lower 99.9% got the minimum and all the top 0.1% got the maximum, the ratio of total dollars per segment of the population would be [10 X ( 1/1009 )] : [1 x (999/1009)]. This is 0.99% going to the top 0.1% and 99.0% going to the bottom 99.9%.

To summarize the comparison – the top 0.1% of Americans have almost as much wealth as bottom 90% , and, with some pessimistic assumptions about the unequal distribution of Social Security pension benefits, the top 0.1% would get 0.99% of the benefits and the bottom 99.9% would get 99.0% of the benefits. If you took all the skew out of the Social Security payments, the bottom 99.9% would hardly see any difference. If you took all the skew out of the wealth distribution, the bottom 90% would see their wealth double.

I doubt you could have guessed that the Social Security payments could possibly be this minimally skewed compared to the wealth distribution. This is an indication of the magnitude of the deception promulgated by Third Way.

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