thoughtmechanics

I started this line of thought in considering a book entitled “The Impending Fall of the American Empire.” But, alas, it seems my constitution wasn’t bred to endure the rigors of endless research, organization and the dedication required to compose and submit a full manuscript. Besides, I really believe waiting three or four years to get this information before the public might well be too late. On the other hand, all the info I’ve found *is* available for public scrutiny for anyone with the time and inclination to pursue it so these rantings may easily pass just as ignored as those sources…. but at least I will, in my own small way, have tried to make a difference.

There are so many events and situations with which to take issue; the monumental failure of our country’s educational elementary and secondary education system, the decline of the nation’s social and moral compass, the growing apathy of the citizenry, etc. etc. ad nauseum that one scarcely knows where to begin. What better place, though, than with the graft, corrpution, waste and self-serving demeanor of the cornerstone of our nation - the body politic?

Enron, WorldCom, Adelphia, Tyco: The names of these once-giant corporations now strike loathing into the hearts of hard working Americans throughout the country. Their deceptions, lies and book-cooking accounting practices led - finally - to their downfall. Skilling, Lay, Rigas and company, though, were finally brought to task for their fleecing of the American public. Their respective companies lie in ruin and hundreds - thousands - of customers, clients, employees and investors are left with the task of recovering the fortunes and futures lost to these crooks. When these houses of cards were exposed and began to tumble it was our government who demanded investigations, tried the offenders, exacted retribution and, in the aftermath, passed the Sarbonne-Oxley act to insure such mischievous machinations could not be foisted on the American public again.

These companies departed the American business scene following exposures of their law-breaking deceptive accounting, executive waste of corporate funds, mismanagement, gross malfeasance of duty and (pardon my candor) screwing the public trust at every imaginable opportunity. How do these industrial crooks compare, however, to the governing body that passed the laws under which their reprehensible practices were called to answer and which passed even more strict legislation in the aftermath?

The Social Security Debacle

As with many excellent programs instituted for the public good, government mismanagement has brought this social assistance program into disrepute and impending failure while the caretakers enjoy lavish personal benefits and retirement umbrellas. While private sector industries have been abandoning pension plans at an alarming rate our civil servants enjoy a generous and secure pension plan while legislating, under penalty of prosecution, that the remainder of us not only fund their retirement with our tax dollars but also continue to contribute to an admittedly bankrupt institution! (Would anyone like to buy a couple hundred of my Enron shares??)

The Civil Servant Retirement program allows our congressmen and senators the following retirement benefits: Full vesting after five years with pension credit accrual at 2.5% per year for each year of service based on the three highest consecutive years of compensation. To put this in simple terms, a congressman retiring this year meeting the first two criteria and with at least three years’ service at the current salary of $133,600 annually and with fifteen years total service would receive a lifetime pension of $50,100 per year.

My own employer discontinued its defined benefits retirement plan in 2004, joining the ranks of the more than 80% of national corporations who no longer offer a pension plan in their benefits packages. Since I began working under the original plan however, I had the option to retain my plan throughout my career and did so rather than accept the expanded benefits of the coporate 401(k) plan. My pension benefits are as follows: full vesting after five years of service with 1.5% pension credit accrual for the first 10 yrs of service and 2% accrual for all succeeding years. My minimum retirement age is also 50 but to qualify for that early retirement package 20 years of continuous service is also required. If I were to elect the early retirement option, however, my pension would have been reduced nearly one-third to approximately $17000 per year. Projecting my earliest full retirement date at age 55 with 30 years of continuous full time service my pension is estimated to be approximately $24,500 per year - less than half that of my elected representatives after twice the years of service and with an expected salary at retirement slightly short of six figures per year.

And yet I am required, by laws passed by my previously mentioned elected representatives, to contribute 7 1/2% of my earned income to an almost certainly doomed investment vehicle - Social Security. To that, my employer is required to “donate” a matching amount. But are our investments socked away in stocks, bonds and money markets to insure a tidy nest egg for my golden years? Hardly. My contributions and those of my employer are immediately doled out in ever-expanding programs to current retirees, the unemployed, the disabled and their progeny. To add insult to injury, it has become common practice to borrow any excess current contributions to the system to place in the General Fund so our elected officials (corporate executives) can call it a “budget surplus” (profit) while our national debt (corporate liabilites) increase to the tune of more than $150 billion every year. Talk about your shady accounting practices!!!

and more about those in the next installment…..