corrente

There should be a car magnet or sumpin'. Hey, maybe the excitable easily amused wide-eyed wowsers in the MSMCP (mainstream media clown posse) will begin calling the Bu$h Falangista's Social Security privatization designs the Chilean Heroes of Social Security Privatization Plan. Or CHSSPP! Woo-hoo!, that has a nice crisp he-roic ring to it.

Oh wait, damn it, I didn't really think all that up myself (what will we tell the children), but rather I gotted the idea from this guy here:

The Chilean Heroes of Social Security Privatizers, by Dan Restrepo | December 10, 2004

As President Bush and his right-wing congressional allies attempt to destroy the bedrock of retirement security for this and future generations, they will undoubtedly point to the 1981 privatization of Chile's public pension system as a shining example of the possible as President Bush did late last month in a visit to Chile.

Restrepo is no doubt some bitter Shining Path guerrilla wannabe hiding out in the Pine Barrens with the UN Occupation Forces or sleeping on a rollout in Eric Alterman's lefty spy nest hideout in Sea Isle City New Jersey.

Where was I, oh yes...:

President Bush is not the only one on the right wing to hail Chilean reform. In fact, the intellectual authors of social security privatization at the CATO Institute, whose ranks include Jose Piñera, an architect of the Chilean reform, regularly tout the Chilean experience to paint a rosy picture of what "reform" would mean here at home. In last week's New York Times, for example, Piñera extolled the virtues of the Chilean model to argue the United States would be foolhardy not to follow Chile's lead.

The CATO Institute. Yes, the CATO Institute is of course composed of some of America's finest examples of everyday working class heroes. Thirty five year old pouty-lipped bow-tied Weekly Standard editor sniffling types who slaved away day in and day out filing legal challenges to make sure that the largesse of grand daddy's fabulous Rhode Island estate would not be frittered away on Aunt Gurdy's pet poverty prevention project or donated to some do-gooder lefty foundation for the appreciation of the fine arts. Or some other cruel "blue state" elitist anti-country-club Dartmouth Review rich kid whiner cause d'horror like that.

Restrepo continues:

It is telling that these privatization advocates embrace a reform carried out by one of the most morally bankrupt regimes – that of General Augusto Pinochet – in the history of the Western Hemisphere and ignore what preceded the Chilean privatization experience and made it possible.

Yeah, it's telling alright. It's called Ssshhhut the fuck up! Be-cuzz ---- this is what the "official statement" readers at the Time Warner Cellphone-sales News Network (CNN), and the shiny object cosmetic counter trinket worshipers at the General Electric Misinformation Babble Channel (GE/MSNBC), and the professional bald faced liars at the FOXNoise GOP propaganda Newzi Network, and the French cuff-link cowboys at the Wall Street Journal op-ed page, and the goggle-eyed pocket protector nerds at such bastions of bullshit message management as Forbes Magazine don't want ya to know about. But again, it's "telling.":

Social Security Privatization in Chile: A Case for Caution | By Steve Idemoto, September 29, 2000

In order to pay for the transition to a fully privatized system, Chile had to drastically cut public spending, raise taxes, lower benefits, sell government assets, and issue bonds.

Proponents of Social Security privatization often trumpet the Chilean “success story.” Right wing economists (and the finance industry-funded think tanks that sponsor them) spin fabulous yarns about the way the free market transformed Chile’s pension system. In doing so, however, they leave out crucial parts of the plot. Privatization advocates paper over very serious problems with Chile’s social security program.

[...]

Pinochet’s Privatization Scheme
In 1981, the Chilean government under military dictator Augusto Pinochet took the radical step of phasing out the country’s troubled publicly funded social security program and mandating participation in a system of privately managed individual accounts. Under this program, workers must contribute 10 percent of their wages, up to a specified ceiling, to a government-approved investment fund. Workers are required to pay another 3 percent to cover term life and disability insurance. Participation is not mandatory for self-employed workers, but they may voluntarily set up accounts with the same basic features.

Individual account contributions are managed by private investment firms (called Administradoa de Fondos de Pensiones, or AFPs). Once a worker signs on with an AFP, he or she must stay with the investment firm for at least four months before switching. Contributions, including voluntary contributions of up to an additional 10 percent, are tax deductible. Upon retirement, workers have two withdrawal options: they may purchase an annuity or withdraw money based on a government-determined schedule. At the time of withdrawal, pension benefits are taxable as income.[6]

The Consequences of Social Security Reform
The Chilean experience with social security privatization gives much reason for pause. Major concerns include: the high cost of transition to a privatized system, exorbitant pension fund management fees, non-participation in the scheme, the effects on low/middle-income workers and women, and the vulnerability of workers to market risk. These concerns are examined more closely in the following sections.

High Cost of Transition
Transition from a pay-as-you-go social security system to a privatized system entails substantial costs. Under a pay-as-you-go system, the contributions of today’s workers fund the benefits of today’s retirees. Under a newly privatized system, where workers’ contributions are diverted into individual accounts, cash must be found to fund the benefits of retirees and workers nearing retirement (who paid into the old system but didn’t have a chance to save up an adequate nest egg under the privatized system).

Chile funded its transition to a privatized system in five ways: drastically cutting public spending, raising taxes, reducing benefits, selling government assets, and issuing debt.

Cutting public spending. The Chilean government has cut social expenditures, including health and education spending, to help pay the pensions of retired and retiring workers.[7] Raising taxes. Chile introduced a value-added tax in 1975 in order to raise revenue for the anticipated transition.[8]

Reducing lifetime benefits. In order to cut costs, the Chilean government raised the retirement age for beneficiaries. Prior to reform, retirement ages varied—ranging from 44 to 65. In order to cut costs, the Pinochet regime standardized retirement at 65 for men and 60 for women. The dictatorship also eliminated special pensions based on years of service.[9] Selling government assets. Transition to a privatized system was partially subsidized through the sale of state-owned enterprises to the private sector.

Issuing debt. Government bonds finance approximately 40 percent of the annual costs of transition. These bonds are sold to AFPs and will be gradually redeemed by the government using general revenue.[10]

Analysts project that costs from the transition to a privatized system will be completely paid by 2050, at which point there should no longer be any beneficiaries in the old system.[11]

Exorbitant Management Fees
At first glance, returns on individual account investments in Chile appear quite respectable. After factoring in management fees—which currently range from 16 to 20 percent of annual contributions—the situation can look much different.

Over certain periods, management expenses dragged rates of return to nearly negligible levels. For example, although the average rate of return on individual accounts from 1982 to 1986 was 15.9%, the real return after commissions was just 0.3%. Returns between 1991 and 1995 averaged 12.9%, but management fees lowered the return to 2.1%.[12] For a new worker enrolling in 1996, the 3.5% gross yield actually amounted to a –6.8% return after taking management fees into account.[13] These adjusted returns, moreover, do not include the cost of annuitizing retirement accounts, which in Chile entails a fee equivalent to 8 to 9 percent of total retirement assets.[14]

[...]

Conclusion
Advocates of Social Security privatization continually crow about Chile’s high returns under individual accounts. In concentrating on returns, however, they miss crucial parts of the story. They ignore the fact that Chile has cut social spending, raised taxes, and cut benefits in order to pay transition costs—transition costs that the government will continue to pay until 2050. They ignore exorbitant management fees that have, over a number of periods, cut these much-vaunted returns to nearly zero. Advocates also fail to mention that these individual accounts have increased economic inequality and left workers vulnerable to market downturns. Moreover, privatized systems must either require retirees to convert a substantial portion of their account into an annuity – which means that the account can't be passed on to heirs other than the spouse – or accept a high percentage of the very elderly outliving their account and falling into dire poverty. Once these factors are taken into account, the case for privatization becomes much shakier.

Well fuck me runnin'! ---- Does any of that sound familiar? Remember when Jeanne Kirkpatrick was running around Latin America during the Bush-Reagan 80's lifting her skirt for every neo-fascist dictator who wanted to stick a wet finger in her slot and wiggle it around! Remember? Well, Jeanne's orgasmic screams are finally coming back to haunt us after ricocheting around the soccer stadium torture chambers for a couple of decades. Now that's forward thinkin' deal makin' diplomacy!

And don't forget to embrace the glory of the Flat Tax!

U.S. Administrator Imposes Flat Tax System on Iraq | By Dana Milbank and Walter Pincus | Washington Post Staff Writers | Sunday, November 2, 2003; Page A09

The flat tax, long a dream of economic conservatives, is finally getting its day -- not in the United States, but in Iraq.

It took L. Paul Bremer, the U.S. administrator in Baghdad, no more than a stroke of the pen Sept. 15 to accomplish what eluded the likes of publisher Steve Forbes, Reps. Jack Kemp (R-N.Y.) and Richard K. Armey (R-Tex.), and Sen. Phil Gramm (R-Tex.) over the course of a decade and two presidential campaigns.

That "reform" will no doubt be coming to America soon! Little Green Footlickers and Freeper bump monkeys and Ayn Randian mooncalves and goosestepping Dittoheads everywhere need to stock up on Fritos and Diet Pepsi and Passion of the Christ DVDs, and so on, so as to wage the great ideological battle soon to appear upon the glorious ideological blogging battlefield! The cheery metrosexual wavy-haired pep-boys at Time Magazine need to be alerted to the coming "leading blogger" crusade on behalf of the flat tax wonder-luxe! God save stupidity! And because those company store yes-men toadies at Time magazine are too stupid to come up with an orginal story idea on their own.

SO! Leave no idiotic notion behind! The flat tax that is! The cousin fuckers at the Hoover Institute just love the flat tax moonshine! And the scotch sipping limo-commandoes at the Heritage Foundation have even declared the flat tax a Russian "miracle." And ya know, when it comes to rootin' up economic "miracles" of any kind, Russia is always the first place that comes to mind.

Wasn't Ayn Rand vomited onto our shores from Russia? And didn't Commander GW Sky Box Bu$h look into Pooty-Poot's roosky KGB soul and see an unfolding miracle or something unfolding like that in there? Oh yes, as I recall, I think that it was indeed something like that. Or something else. Or something. Heh.

I'm sure Kate O'Beirne, that snaggletoothed sea-hag from the National Review, can explain it all to you:

Focus the fight on poverty | Ajay Goyal | 20 Jun 2003 - (The Russia Journal)

What has been called Russian ‘reform’ is really no such thing

The economies of poor nations work differently from those of prosperous ones. The Russian population does not have a social-security net, savings, real healthcare or pensions, access to lending or venture capital – and yet their government behaves as though it really deserves a seat among the world’s most powerful countries. It is an irony that the Russian president should participate in discussions among rich nations where the size of one pension fund could equal the Russian GDP.

Somehow, the world has come to expect that, when talking of Russia and its economy, the key word is "reform." Implicit in that is the message it is a rich malfunctioning economy that needs to be reformed to work efficiently. Ever since former Soviet leader Mikhail Gorbachev gave the world words like "glasnost" and "perestroika," the public perception has been that Russia is going through a perpetual reform of its institutions, government, constitution and public life. Nothing could be further from the truth.

All the talk of "reform" is really a great deception. It shifts the focus away from the real tragedy of Russian economy – the abject poverty of a great many of its citizens and the lack of any hope that they can get out of it soon.

Successive Russian politicians have placed their personal enrichment and interests above those of the country, and there have been bitter turf fights among the ruling elite for control of the nation’s vast resources. Real Russian reform started and ended with Yegor Gaidar’s freeing of prices in 1992 – governments since then have merely been privatizing national assets and stuffing their own pockets with the proceeds. That is the sum total of Russian "reform."

Hey, that blockquote wasn't a snaggletoothed Kate O'Beirne sea-hag explanation. Well, anyway, better luck next time. I have to go now and do something else weird with my free time but don't forget that the military dictator Augusto Pinochet, [Chilean Court Upholds Pinochet Indictment ] the crazy sadistic unapologetic Chilean fascist, is one of America's newest founding fathers! Praise Jesus and predatory investment management fees. Thank the American Neo-Republican Falangista and our vapid airhead mainstream country-club television "news" media for reporting all "miracles" as they roll off the free-market assembly line of free-market miracles or are like totally bestowed upon our nation by the miracle workers in the miraculously appointed Bu$h White House.

And thank God Dick Cheney now has his own DINA, I mean CIA, I mean National Security State Intelligence Apparatus. Why it's all just one big miracle in motion.

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