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750,000 Americans Take 50% Drop in Social Security

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Don’t worry about losing your Social Security benefits in 2040 or 2050. Three quarters of a million American citizens are already losing theirs.

Every month, the Social Security Administration (SSA) either mails off or direct-deposits payments to American retirees living overseas. Apparently, more SSA checks are sent to Polish-American recipients in Warsaw, Poland than any city in the world except Chicago. Huge numbers of foreign-born Americans retire back to their country of origin after a working life in the United States. Hundreds of thousand of others choose to live in countries where the cost of living affords them (or used to) a sustainable lifestyle.

And all of them are being skinned.

Consider someone who retired to the Czech Republic, the former Czechoslovakia, thinking he could make it there on his Social Security. Born in America, a series of late-life reversals left him without savings or a private pension. He came to realize that George Bush didn’t believe in those kinds of possibilities, but then he didn’t have lifelong access to George's family bail-outs either.

As Rumsfeld would say, stuff happens. Not to everyone, but stuff happens occasionally to more ordinary folks.

What our intrepid retiree didn’t plan, was Bush following him to Europe to take away half of what little the government promised to pay him--about a grand a month. That’s just about the average, by the way. $1,000 will make a car payment in America or maybe pay the rent, but there won’t be much left for food. And medicine? Forget it.

Which is one of the major reasons Americans are driven from their own country in their old age. With an income at half the poverty level, who can afford to stay home? Everyone knows (god knows they've been told often enough) not to depend on Social Security as an only source of retirement income, but sometimes stuff does indeed happen.

To get down to the nitty as well as the gritty, a retiree moving to Prague just at the end of the Clinton administration found the dollar was convertible to 42 Czech crowns. Renting a flat in Prague, if you were careful, cost about 10,000 crowns--$238 bucks a month. Dinner out could be had for $4 and that included a glass of house wine and a tip. A movie was $1.25, an unlimited tram/metro pass for a whole year cost $60 and walking the incredibly beautiful streets of one of Europe’s most famous and historic cities was not only safe, but cost not a dime.

You could live well on a grand a month, travel a bit and never worry about making it.

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It will come as a shock to most Americans who don’t venture outside the country, but all is not well with the dollar abroad. It still buys 30% of a Big Mac or a Starbucks coffee of the day in America, but it’s worth 19 crowns in Prague, 70% of a euro and less than half a British pound. Our good old American buck, that used to be the standard of the world and its most sought-after currency, is as broken as our military.

Alan Greenspan thinks it will be okay. Alan didn't see the dotcom bubble or sub-prime mortgages as a problem either. He cheer-led the tax breaks and now writes that he regrets them. Nice timing, Alan.

During six years in Prague, Czech prices have gone up about 20% (a moderate 3% annual increase) and the dollar has dropped by half, while Alan wasn't looking. The combination of those circumstances have boosted the $238 flat to $631, the $4 dinner to $10.60, a movie to $3.30 and a yearly tram pass to $159. Suddenly travel is out of the question and those casual stops at the bookstore are a thing of the past.

Make a quick note of what shape your family finances would be in if, during the past six years, everything you need to pay for had increased by over two and a half times. You might want to take George and Alan out to the woodshed.

That’s what’s happened outside the country. That’s why travel agents warn you to get ready for $400 hotel rooms in Europe, $6.50 a gallon for gas and (heaven forbid you need it) $9 a quart for oil. Nine bucks a quart!

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We don't talk about how this happened in America, because we mostly don't know that it happened. But we began this little trip down Ruination Lane by giving $2.5 trillion to the already unconscionably rich in tax breaks. It didn’t matter, because Starbucks coffee was still $3.50. Then we blew another $1 trillion (well on its way to $2 trillion) for the Iraq thing, without raising anybody's taxes to pay for it. But again it didn’t show up on the public’s radar because Big Macs still cost pretty much the same and someone else’s kid was being called up—and called up—and called up.

Who knew? I'm coming to that.

A funny thing happened on Wall Street, where they don’t eat many Big Macs (the same cannot be said of Starbucks). The guys who make their hundreds of millions (and get tax breaks on them) were all selling the dollar short—that’s street-speak for betting it was on the way down—and down is where it went.

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Jim Freeman's op-ed pieces and commentaries have appeared in The New York Times, Chicago Tribune, International Herald-Tribune, CNN, The New York Review, The Jon Stewart Daily Show and a number of magazines. His thirteen published books are (more...)

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make the dollar worthless, then the "Amero&qu... by Stanimal on Friday, Oct 19, 2007 at 3:38:53 AM
is that when I hear that the 'elites' want... by Jim Freeman on Friday, Oct 19, 2007 at 5:25:15 AM
...believe that the corporation ang big money indi... by RLAnchors on Friday, Oct 19, 2007 at 3:45:38 PM
an article I wrote in May of last year, Taxes Are... by Jim Freeman on Friday, Oct 19, 2007 at 5:18:51 PM