Minnesotans For Sustainability©
Sustainable Society: A society that balances the environment, other life forms, and human interactions over an indefinite time period.
TESTIMONY OF DELL H. ERICKSON
BEFORE THE HOUSE COMMITTEE ON WAYS AND MEANS
CONCERNING PROPOSALS GUARANTEED TO
Mr. Chairman and Members of the Committee, thank you for the opportunity to submit Testimony regarding plans to reform Social Security.
In the Senate, Mr. Moynihan and Mr. Kerry last January introduced legislation in the form of S. 21 with the objective of reducing Social Security payroll taxes and to assure the long range solvency of the system. In April of this year Chairman Archer and Mr. Shaw introduced legislation also with the intention of remedying the long-term solvency of the system. (Indeed, it is the reason for this hearing.) In addition, the Clinton Administration's new Budget offers four options to resolving our Social Security/Medicare dilemmas: using the budget surplus, increasing fertility- i.e., more babies, doubling immigration, and shortening Boomer life spans.
That there are varying proposals being laid on the table, suggests the impending calamity confronting this nation if nothing is promptly done to alleviate the systemic problems.
Due to time and space limits, my Testimony will often only indirectly discuss several of these proposals while providing additional background information regarding population growth and the funding of Social Security.
I will begin by first presenting my recommendations, followed by background
information on the profound structural program flaws. I then turn to the
proposed remedies centering on adding additional enrollees and of population
growth with the towering role of immigration in that population growth.
The overarching question is how should Americans provide for their retirement and what is the appropriate role of the government? My response is that the current retirement system should be withdrawn because of its numerous inequities, unconvincing financial benefits, and fundamentally self-destructive program design. Regrettably, previous legislative remedies have only served to postpone the inevitable Social Security/Medicare collapse. The recommendation is to rapidly transition the government's retirement system to an all-encompassing private individual retirement account (IRA and/or ROTH type IRA). Proposals to fund Social Security from rapid population growth, especially immigration, are counter productive and ill-advised. Its welfare aspects must be funded from general revenue sources.
The tremendous opportunity cost of not being able to invest in an IRA has been noted elsewhere. Here it is sufficient to say that anyone with an IRA, rather than Social Security, would have had the means and opportunity to have saved and earned a substantial retirement nest egg. For example, if all deposits were to a single comprehensive private individual retirement account, as little as three to five percent of annual wages would provide a very pleasant retirement fund. Even a worker earning as little as $20,000 to $25,000 per year could have at retirement an inflation adjusted pension of around $75,000 per year indefinitely and upon death the balance would go to the family. On the other hand, under the government plan the payments are dramatically less and any remaining amounts are frequently lost to the worker's family. Not only is the Social Security system counterproductive to achieving retirement security, it eliminates or substantially reduces the ability of workers and families to fund their own retirement programs.
Every individual must have a private individual retirement account with deposits from all sources (individual, company, and government sponsored) flowing into it. The IRA (or ROTH type IRA, taxable and non-taxable types as today) is an asset of the individual so the owner has full responsibility for investment decisions (with limitations, as in current IRA's and Keogh plans). Because the goal is an individual's retirement, there should be no age limit for the initial set up nor is an earned income requirement appropriate. Earned or unearned income should be acceptable deposit (as now, only earned income should be tax deductible) and non-owners (i.e., Grandma) should be able to add a non-deductible $500 per year to any person's IRA (and be a gift beyond the reach of the gift or death tax). If under age 35, the maximum annual deposit by the owner should be the greater of $1,000 or 65 X age (adjusted for inflation) while those over 35 should be able to deposit to their IRA 100 X age. Similar to current practices, employers should have the option of matching and depositing 2% to 3% of an employee's wages each year.
All current workers and retirees in the Social Security retirement program should earn a Social Security annuity based on their past deposits and current rules, and then be removed from further FICA payments or benefits, thus ending the program over time. This is where the proposal to use much of the "budget surplus" to help fund Social Security comes into play. Rather than purchasing government bonds (and continuing the self-destructive cycle only under a different name) those excess funds should be paid now, directly to an individual to retire prior contributions into an individual's IRA, including a return on investment. This "buy-out" process removes the otherwise compounding system liabilities from the system. I recommend it begin with the young worker and move up the age ladder (and everyone should have the option). In this way individuals and associated liabilities are rapidly removed from the system. Without the onerous FICA tax, the ability to fund their own retirement program, and if necessary, to pay a slightly increased income tax rate, is significantly enhanced.
Please note, I am not advocating discarding the government welfare function
of the safety net, only that it no longer be funded from workers and their
families' retirement funds. I would like to now turn to the profound design
flaws of the system.
IN TWO FUNDAMENTAL WAYS SOCIAL SECURITY IS SELF-DESTRUCTING
First, it is designed as a pyramid "Ponzi" scheme, and second,
there is the false notion of a "trust fund."
PONZI PYRAMID SCHEME
The first self-destructing flaw is that the funding of the Social Security system is that it is a classic Ponzi pyramid scheme. The scheme is named after Charles Ponzi who in the 1920's used the method to defraud investors of millions of dollars. The term is given to any scam that bilks people by promising returns for money invested, but can only do so by using funds received from new participants to pay the earlier contributors, a "pay-as-you-go" system. The scheme is doomed to fail because its pyramid effect requires ever growing numbers of new participants and spiraling sums of money. The Social Security system, like the Ponzi scheme, crumbles from below when the inevitable numbers of new participants is insufficient to support those at the top, the retirees in our case.
The pyramid suggests the necessary demographic shape of a population requiring rapid and unending population growth in order to continue the ill-designed program. This was an absurd assumption then, and in this unsustainably populated country today is inexcusable. The truth of the matter is that the more people in the retirement system, the more unmanageable and intractable the problems. Any increase in the numbers of people in the system exacerbates the pyramid scheme nature of the system and merely postpones and intensifies the inevitable collapse; the irony of it is that the fewer enrolled in the program the less harm done and less politically awkward the ensuing remedy.
The proposals to increase enrollees, promote fertility increases, and legislation to open a floodgate of immigration are unseen and little known attempts to remedy the funding dilemma by rapidly increasing numbers at the bottom of the pyramid. This matter applies equally to the additions of workers (e.g., state employees) not now included in the program. The immigration legislation of the last nearly thirty years has been a continuing endeavor to force, in a manner unprecedented in history, population growth in the U.S. to mirror the excessive population growth in the baby-boom era, and as policy, to continue rapid and unrestricted population growth indefinitely.
These proposed and current demographic policies are not environmentally nor economically sustainable, are terribly socially disruptive, and will produce absolute chaos in the Social Security system.
Demographics plays an important role in shielding or aggravating the
self-destructive nature of the program. The Social Security cash flow (pension)
is generally paid by younger workers (the Ponzi effect) and that an increase in
payments is paid by increasing FICA taxes of current workers is a symptom of the
funding quicksand upon which the system is based. This observation underlies the
motivation to redesign the cost-of-living (COLA) portion of the system in order
to reduce annual inflation adjustments. Unfortunately, the process takes
advantage of the ignorance of the general public regarding compounding- unknown
to an unsuspecting public, even numbers as small as one percent overtime become
a very big financial deal!
THE "TRUST FUND"
The second self-destructing design flaw is the notion of a trust fund. In contrast to an IRA, employer funded pension plans, insurance, private annuities, and other pension plans, the Social Security retirement system is not a funded system; in reality there is no fund. To the contrary, there is a future tax increase of unimaginable proportions, a quietly waiting irreversible financial time bomb. The lack of funding is a legal inconsistency between the requirements of all other pension plans and the U.S. government retirement plan for its citizens.
(When hearing the following description, please bear in mind there are proposals to use much of the so-called "budget surplus" to purchase Treasury Bonds to shore up the Social Security Trust Fund. The reality of it is that this proposal is merely a minor change in name and bookkeeping location only. Thus, the dollars remain a government liability with the same, even at a higher rate, compounding interest paid by the taxpayers.)
Let's review the process as simply as possible. The "trust fund" purchases special Congress Treasury Bonds (this helps balance the current budget deficit) that pay interest. This interest is not actually paid into a fund, but is penciled into a ledger as an "IOU." The interest, now IOUs, compound over time. Compounding is a marvelous road to wealth accumulation were the fund an IRA and not a Social Security entity. However, it is circular: increasing interest payments (IOU's) produce increasing FICA taxes but increasing FICA also produces increasing interest payments (IOU's); in turn, increasing taxes, and so on. It is Congress spending now while lending to itself. In fifty years each $1 in the trust fund will compound to about $75 (e.g. Kerrey & Trustee Reports!). The wherewithal necessary to pay those staggering compounding obligations is at the heart of the dilemma.
If one considers the pyramid (Ponzi) nature of the design and then combines it with these massively compounding liabilities one will began to understand the magnitude of the design mistakes. Increasing the number of enrollees or even moving out the retirement age multiplies the existing design errors.
Similar to an IRA, the bulk of the so-called "trust fund" will be composed of compounding interest (penciled in IOU's). Unlike an IRA, this interest is paid by raising taxes. It makes little overall economic difference if tax increases are in FICA or general income taxes. As the 76 million Boomers retire, combine many individuals and institutions selling various securities saved for retirement with trillions of dollars compounding interest requirements in the misnamed "Trust Fund," and the result is the prescription for an unstoppable and frightening national breakdown, literally an American social Armageddon and economic apocalypse. The future is rapidly becoming the present.
The presumption underlying attempts to overcome the pyramid (Ponzi) scheme is that of requiring workers to pay more into the system than they receive in benefits. These Congressional attempts fall into two general categories: increase current cash inflows by increasing Social Security/Medicare taxes (FICA) or increase the number of young in the system. Second, to reduce cash outlays by recalculating the annual cost-of-living increases (COLA), decrease the number of eligible enrollees, and reduce the benefit levels.
Although the system currently predicts raising FICA taxes (or income taxes), raising taxes are less of a viable option because of its adverse economic implications and the likelihood of forcing more individuals into the growing underground economy. This would further reduce cash flows into Social Security while leaving the welfare burden intact. The decrease in eligible retirees is accomplished by pushing out the retirement age (more will die, and pay in more and longer —a variant of the proposed "die earlier" solution) and, increasingly, by using an income, "means," test to screen out individuals. Congress has increased the number in the system by adding workers not otherwise in the system —government, farmers, and religious employees— and, most notably, by increasing population growth, chiefly through mass-immigration.
The plan to remedy the funding dilemma by moving out the retirement age has been accomplished previously (i.e., removing people from the retirement program). Further aging continues to be a proposed remedy. The argument is that people are living longer. This is true, but avoids two misleading aspects. First, it is political doublespeak, for it literally means that people are not leaving the system in a timely fashion, i.e., not dying early enough —as stated in one proposal. Second, that there is a funding dilemma and the proposed remedy is to have the Boomers pay longer and more into the system, while delaying, reducing or removing the promised payments.
Because the Budget and other proposals emphasize the role of population growth in salvaging Social Security, the balance of my remarks will concentrate on population growth and briefly discuss several ramifications. I begin by briefly discussing population growth and the role immigration plays in that growth, then the worker to retiree ratio, attempts to increase cash inflows, and finally several unintended consequences of our current high immigration policies. The conclusion will be that these attempts to mitigate the ills of the program only serve to exacerbate existing problems and generate additional concerns as well.
When future historians write about U.S. population growth and the subsequent decline of America, they will write that the single greatest tragedy in U.S. history was the change in immigration policy in the mid 1960's.
Without over immigration the U.S. would be on a very welcome trajectory to achieve a stable population, sustainable economy, and cohesive society. The consequences of this road to stabilization is that the U.S. would have had the opportunity to ameliorate or avoid several extremely serious looming problems, including Social Security, would be in a much stronger position to assist the disadvantaged within the U.S. and to facilitate change in other nations as well.
Although it is an American tragedy of epic proportions, the solution is not difficult. That Americans want to stop population growth and reduce immigration is abundantly clear. Repeated polls show that over 80% of Americans from all walks of life favor a reduction in immigration and our population to stabilize by 2050. And nearly 60% want the U.S. population reduced!
The explanation lies in the numbers:
The numbers are already unprecedented in U.S. immigration history, a further doubling, as proposed, is mind boggling! The most recent data indicate that over 1,300,000 immigrants entered the U.S. in 1997 and nearly that many last year. (The number could be considerably higher due to uncounted and illegal immigration, estimated at between 250,000 and 500,000 each year.)
Similarly, legislated attempts to promote increased fertility are equally counterproductive. For example, tax exemptions, the $500 per child tax credit, and tax credits for daycare also serve to compound the problems of U.S. population growth. The government pays to have babies. Significantly, it also has the regretful effect of reducing parental responsibility to provide for their own families, creates additional dependence on the government, and sends an erroneous message about a sustainable U.S. population.
The problem involving funding Social Security is that increased fertility aggravates the pyramid nature of the system while markedly increasing the dependency ratio. The effect is to actually reduce the wherewithal to fund Social Security.
The impacts of high immigration on our culture, society, economy, and
environment must be addressed. Nevertheless, there are other compelling
arguments against immigration as a remedy to our Social Security/Medicare
IMMIGRATION AND SOCIAL SECURITY: A DANGEROUSLY INCORRECT POLICY
In 1985 and again in the 1990's, because of overwhelming public support, it was widely expected that Congress would take the position of reducing immigration to traditional levels. Beginning in 1965, special interests and the retirement fund lobby mistakenly told Congress that our rate of domestic population growth was insufficient to maintain the solvency of the Social Security system. They were joined by an unlikely alliance —social groups, religious organizations, humanitarians and allied opportunists and economic and corporate powerhouses (and some also did with the objective of changing American society) to lobby Congress to thwart the wishes of the American citizen to pass this ill-advised legislation.
Instead of reducing, Congress doubled the legal immigration quota and turned a deaf ear to dealing with the millions of illegal immigrants. Evidently, the failure was in understanding the pyramid nature of its design. The legislation to open a floodgate of immigration became an unseen and little known Congressional attempt to remedy the alleged funding dilemma drawing near by rapidly increasing numbers at the bottom of the worker pyramid. Moreover, advocates assume they are willing to pay into our Social Security system and are deluded into believing there are no serious side effects. As described earlier, it was an inappropriate policy initially; the situation worsens with each passing day.
For a moment, let's step back to put the apparent demographic and Social Security complication in perspective. It is a passing predicament. The population "Boomers" are the well known visual depiction of a large "population" lump passing through a snake. The image also illustrates the ethereal nature of the demographic concern. At each stage of their lives, these baby-boomers required the economy and society to accommodate the necessary, but transient, demographic changes.
The point is that this passing phenomenon is just that, temporary and it is exceedingly unwise to make permanent government policy based on transitory demographic situations. The repercussions of any alleged short-term remedies are dreadfully frightening when considering the lasting affects of population growth.
The current budget and some proposals, like the immigration legislation of the last nearly thirty years, is a gallant legislated attempt to continue shielding the public from realizing the program may require wholesale modifications, if not total scrapping.
However, there is a more subtle agenda at work as well. It is a manifestation of the "die earlier" notion. These same immigrants have a life expectancy less than the citizens approaching retirement. Some proponents may say one thing, but they plan on a disproportionate number of these new immigrants, other minorities, and other disadvantaged, dying prior to receiving a retirement pension. Likewise, they overlook the millions of illegal aliens because, in addition to limiting wage demands, they may pay into the Social Security retirement program yet are precluded from claiming benefits. On the other hand, the Clinton administration and mass-immigration allies certainly understand this dilemma. The fact that they repeatedly grant huge numbers of illegal immigrants amnesty and health, and other benefits, suggest they realize it. On the other hand, those that survive to receive a Social Security benefit reap a windfall at the direct expense of native-born Americans.
Let's now examine how immigration is a perilously flawed solution to the Social Security/Medicare funding dilemma, notably the "worker to retiree" ratio and to the matter of increasing cash flows. Following that discussion will be a brief discussion several unanticipated impacts of excessive immigration on our culture, society, economy, and environment.
WORKER TO RETIREE RATIO
The alleged problem most frequently heard is that there won't be sufficient workers to support the retirees, the worker to retiree ratio, will be inadequate. Simply put, they argue our population is aging. This is often cited as an excuse to increase immigration.
Those asserting that population growth through high immigration is a solution miss the mark in using the simple relationship of retirees to workers. The more meaningful and appropriate item to examine is the dependency ratio. This ratio is the number of young plus the number of old as a percent of the total population. Thus, the dependency ratio reflects the ability of workers, the entire labor force, to provide for total dependents, young and old. (Note, of course underlying much of this is the extent of government programs.) Recall that a proposal was for the Boomers to die earlier. From the standpoint of the dependency ratio and Social Security, the ratio is enhanced by removing the elderly from the system. Although this proposal is more of an academic than actual position, we should also be aware that subtle legislative changes in the provision of health care would serve the identical function.
What is seldom acknowledged are the more significant possibilities at the other extreme, of reducing the number of young. This is where the greatest enhancement to funding Social Security lies. With our highly pro-natalist government policies this action seemingly would be met with some resistance. However, Americans have had an environmental friendly, economically sustainable, and socially desirable fertility rate for many years. Thus, there is little, if any problem associated with native-born Americans.
The difficulty remains with recent immigrants and their excessive birthrates. For the most part, the problem would be quickly settled by minimizing immigration. After minimizing immigration, expanded programs for recent immigrants must be passed to arrange rapid assimilation —and that process includes family planning services.
The dependency ratio of a stable population is 39%. Immigration proponents and their Social Security allies seem to think that this ratio is something to fear. Really? In 1960 when John F. Kennedy was president, the ratio was 39% and there did not appear to be any social or economic trauma associated with that ratio. During the 1970's the ratio was about 38% and during the 1980's (due to the Boomers) the ratio was around 35%. Currently the ratio is about 33% primarily due to the relatively few (now elderly) parents and grandparents of the Boomers and the "birth dearth" immediately following the Boomer generation.
This somewhat reduced dependency ratio in part explains the booming success of the current national economy. If policy were modified to limit annual immigration to our traditional 150,000 the ratio would less than 38% in 2050. This is, as stated previously, is a prudent level and no cause for alarm.
Several observations can be drawn from this data. First, the dependency ratio has varied without creating Social Security unique funding problems, around the mid to upper thirties percentiles. Second, the effect of the baby-boomers moving up the demographic ladder temporarily reduced the ratio below the average range, yet without significantly nor permanently benefiting the funding of Social Security (again see "Trust Fund"). Finally, even under a slow growth or sustainable population scenario, the ratio does not climb appreciably, remaining within the historical non-problematic range. The data clearly indicates that there is no genuine case for taking action.
To clearly demonstrate how circular and preposterous the immigration approach is, let's extend this logic further out in time. To maintain a consistent ratio, the projected 2050 population of over 500 million will require immigrating 2.5 to 3 million fresh immigrants each year instead of the approximately 1.3 million of today. (Canada? In this short period Canada will merely become a subdivision of the U.S.!)
If one assumes the worker to retiree ratios we often hear of 4,5, or 6 to 1, the immigration numbers become irrational —5, 10, 15 million or more additional immigrants every year! Who will pay their Social Security? Who will want to?
If there is any legitimacy to the claim that immigrants will bail out the Social Security/Medicare systems, any further immigration must be postponed until just prior to the predicted collapse when those fresh cash inflows will provide funds to retirees. In the interim, in order to save and preserve Social Security, the numbers should be minimized and the immediate burden reduced by revising current immigration policies to be based on the former policy of U.S. labor needs (that is of only already educated, skilled workers, certainly no older than 45, and without regard for "family unification").
On the other hand at no time in U.S. history have there been so many educated and skilled American workers, the Boomers, over a succession of years, continuing to enter their most productive years and period of highest earnings. They are extremely productive and well-off, invest, buy SUV's, larger and second homes, damage the environment, and generally propel the economy like never before and, as a group, unlikely to repeat. However, this boom will pass and the economy and society will return to a balanced and trendline rate of economic growth.
If the increase in life expectancy (forecasted to between 83 & 87 years)
is also considered, even a higher dependency ratio is not cause for alarm.
Unlike the young, workforce veterans are valuable to the productive capability
of the economy. Aging workers can continue to work, retire later (as Social
Security already recognizes) and be productive citizens over a longer period of
time. Finally, because the aging Boomers are the most educated and experienced
labor group in U.S. history, it would not only increase tax receipts, but
support other social concerns if government were to eliminate disincentives to
their continued employment.
IMMIGRATION & CASH INFLOWS
Let's now turn to the apparently correct, "common sense," component of their proposal, fresh cash. There are two errors in this approach. The first is that because recent immigrants have significantly reduced education and skill levels, their contributions to the system are minimized even though their systemic liabilities disproportionately increase. In addition, the unprecedented numbers compel our communities and state governments to otherwise unnecessarily raise taxes and spend vast sums to provide for them —diminishing the wherewithal of local citizen taxpayers to fund other needs.
Second, is the serious timing factor. This asks the question, "why increase immigration beginning in the 1960's, then open a floodgate, and another (proposed) doubling now, when the collapse will be forthcoming after the turn of the century, around the year 2020?
Immigration of the last twenty-five years has created additional funding demands on the system at precisely the wrong time. These millions of recent immigrants will be retiring and thus create increasing cash demands on the Social Security system, just when the additional cash inflow is most needed!
How bad will it be? Data show that fully fifty percent of immigrants currently in the U.S. will reach retirement age by the year 2020, in the heart of the feared crunch.
Compounding the error is the income redistribution and trend toward reliance on further income redistribution using, for example, a "means" test for Social Security recipients. The means (income) test, in addition to unfairness (workers believe it's their money!), will remove additional "average" American's from the system. The changing definition of "average" also results in ever increasing numbers of Americans being reconsidered as benefit recipients. On the other hand, the average income of immigrants is considerably less than that of the average native born American, thus their funding contribution to the system is disproportionately less than their numbers would otherwise suggest.
Moreover, because of the income redistribution aspects, they will have accumulated significantly greater unfunded system liabilities than the average American while contributing substantially less.
Taxation of the Social Security pension when a retiree earns over some small threshold amount is commonplace, but ill-advised. More subtly, taxation of non-inflation adjusted benefits is another example. The point is that by increasing the number of immigrants, income redistribution aspects, and further means testing will result in exaggerating the direct transfer of earned income from native born Americans to immigrants. Once this mechanism is recognized by the public, there is very likely to be further erosion of support.
In short, the ill-considered immigration policies of the last twenty-five years, rather than assisting, have actually magnified the funding problems of the Social Security system. In other words, although on the surface it appears counter intuitive, in order to help save Social Security/Medicare, immigration must cease at this time, with the option of revisiting the issue in twenty years.
Despite the inclination of Congress to solve U.S. and world problems, this unprecedented influx of immigrants will further destabilize American society and economy and provoke ethnic and intergenerational conflicts. The promise of the Social Security system to Americans, notably the Boomers, is rapidly becoming a embellishment due to immigration.
These Boomers are the only group in history to have funded the system
throughout their lives. Now, as they approach retirement, they are in line to be
abused in order maintain a failing Social Security system.
UNANTICIPATED CONSEQUENCES OF RECENT IMMIGRATION LEGISLATION
The magnitude of immigration raises several items overlooked in the proposals. One must wonder if the Clinton Administration and Congress are prepared to sacrifice so much of America for this oversight? The unparalleled influx of immigrants also creates turbulent social problems such as a nagging high unemployment rate (only now in the final boom economic stage, subsiding), reductions in average wage levels, widening income gaps between the lower skilled and higher skilled worker —and calls for social legislation to redress this apparent development, and that many migrants arrive with an allegiance and purpose of a foreign nation in mind are also important considerations.
Furthermore, the population induced ecological damage will be massive, expensive to repair, and sometimes irreparable to the U.S. and world environments. It is policy not destiny.
Current excess immigration policies has the worrisome attribute of reducing access to or even diminishes social programs and economic opportunities for the less well-off American citizen, most gravely Blacks. Those "Great Society" programs, for example, intended to facilitate Blacks and other disadvantaged Americans transitioning into mainstream America are increasingly utilized by immigrants. It is quite disconcerting that proponents disconnect the problems associated with high immigration with its effects on American Blacks and disadvantaged. Over immigration directly disadvantages the poor in U.S. society.
Wouldn't it produce a much more pleasant and well disposed society if our government policy changed from educating and encouraging immigrants to educating and building skills for disadvantaged native born Americans?
These more skilled individuals, I will add, would increasingly contribute to Social Security without many of the environmental and social repercussions. Moreover, in reaching out to the other disadvantaged native born American citizens', this action would decrease welfare costs and provide additional cash flow into Social Security, meanwhile reducing income inequality and increasing overall standards of living.
Furthermore, it is sad to note that when our immigration laws were changed in the mid 1960's, the standard for unemployment was three percent and only when the three percent level was breached did economist and the government become concerned about rising unemployment.
Beginning in the 1960's, on the other hand, the unemployment standard was raised to an incredibly high five-percent, for the most part, in order to accommodate the revised immigration legislation. That two percent (or more) difference represents large numbers (millions) of American poor and disadvantaged, often Black, having their futures obstructed by Congress with its ill-conceived immigration policies.
I am certain that our Congress (and the current Administration) failed to comprehend the disastrous racial overtones connected with their ill-conceived effort to rescue Social Security via high immigration.
There is another complication as well. Our mass-immigration policies since 1965 are inconsistent with traditional American immigration policies of moderation, preserving the American culture, and of balance. The dissimilarities can be seen if one compares our traditional and more recent source nations. The impact on the demographic structure of America is quite illuminating, revealing that the United States is quickly losing its European heritage.
The misguided efforts to salvage a self-destructive retirement system sets up a less than pleasant scenario. Can the Committee members imagine how these immigrants and their descendants will react when the system which used them as instruments to save it, now crashes upon them, in no small measure because of them?
Contemplate the implications as Boomers retire, 10, 15, 20, 25 years from now and how it will be acted out by those frustrated and less well off but rapidly growing masses. Picture in your mind large numbers of relatively well off whites plus some Blacks and Asians (i.e., today's native born Americans), now absolutely and relatively declining in numbers receiving a Social Security retirement pension from an enormous and rapidly growing much less well-off largely immigrant and disadvantaged population highly envious of the elderly (Boomer) generation and very likely coming to understand a Social Security (and political) system that has seduced and coerced them into paying for the Social Security retirement pensions of the system that is destined to betray them.
The ability of immigrants and their supporters to influence legislation is being felt today; in coming years, that influence will be powerfully expressed in a variety of outcomes.
This observation may help to explain why Americans of all kinds, feel it in
their and the nation's best interest to return to traditional immigration
policies. If the Boomers and Generation "X'rs" of today are skeptical
of receiving their Social Security/Medicare contributions, consider the
impossibility of future generations and that they, unlike today, will be fully
aware that their promised pensions will be but delusional dreams of a well
intentioned but exceedingly ill-advised Congress.
I want to thank you again for an opportunity to present this Testimony and hope this information will make a useful contribution to your deliberations.
My remarks began by noting that the fundamental design of the Social Security/Medicare system was profoundly flawed and provided illustrations clearly demonstrating that proposals to increase U.S. population were ill-advised and in great measure multiplied the existing predicament. I also mentioned that any increase in enrollees, especially using high immigration is a dangerously flawed notion. The current and proposed immigration policies are deleterious to the nation and to its economic, cultural and social fabric and will result in chaos in Social Security.
An approach contrary to the current one of unprecedented population growth is appropriate and necessary: minimizing new enrollees such as workers currently not enrolled and limiting further immigration while also assisting recent immigrants to rapidly assimilate is a critical first step. Protecting our environmental legacy, increasing national cohesiveness, and providing a thriving economic platform can only be accomplished with a population balanced across age groups.
Programs and current proposals undertaken by Congress to remedy Social Security have often worked in opposition to achieving these sound national goals while further destabilizing Social Security.
I will be happy to answer any questions you may have or to provide additional information.
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