Today’s Washington Post Outlook section has a fascinating series of articles about Social Security and the Bush plans to change it. Nearly every article debunks the rhetoric coming from the president. James Randi would be proud; the White House continues to use carefully chosen language — a Republican triumph, this semantic discipline — to convince us all that Social Security is doomed.
The latest Social Security trustees’ report, whose numbers even the White House uses, predicts that the Social Security program can pay all promised benefits for the next 38 years — with no changes at all. The June 2004 estimate from the nonpartisan Congressional Budget Office projects that Social Security can pay all promised benefits without changes for even longer, until 2052. That’s nearly half a century.
And we are supposed to be worried about this? It brings to mind the image of Woody Allen as a nerdy young child in “Annie Hall,” becoming suddenly depressed because he has discovered that “the universe is expanding” and life on Earth is ultimately doomed.
Granted, 38 years is not an eternity. But even after 2042, the Social Security trustees say they will be able to pay an average benefit that is actually higher than what workers receive today — indefinitely. That’s in 2004 dollars — adjusted for inflation.
That article goes on to give specific rebuttals to all the claims of crisis given by the White House:
The disappearing trust fund: Some people say that Social Security will run into trouble in 2018. But this is like saying that Bill Gates will be strapped if he works only part time. He will still have $40 billion in assets, enough to keep him living well for a long time.
Similarly, the Social Security trust fund will have more than $3.7 trillion in today’s dollars in 2018. Combined with payroll tax revenues, that is enough to cover promised benefits until 2042, the trustees’ report says.
…“The baby boomers’ retirement will bankrupt Social Security.” Far from it. The first boomers actually begin retiring in 2008. Most of them will be dead before Social Security faces any financial difficulties.
… The bottom line is that Social Security is more financially sound today than it has been throughout most of its 69-year history, according to Social Security trustees’ numbers. If workers in 2050, who will be earning on average 68 percent more in real, inflation-adjusted dollars than they are today, have to pay 1 or 2 percent more of their income in taxes — as they have in the past — they won’t be able to complain much. They will still enjoy higher living standards than we do today. And Social Security will provide much larger real annual benefits for longer retirements when their turn comes.
The impending crisis of Social Security is a myth. Without it, however, Bush’s initiative to slash benefits and partially privatize the program wouldn’t have a prayer.
There are many more articles about Social Security: This one describes the White House’s proposed changes as conservative social engineering on a grand scale; in this article the author argues that the plan will dump huge costs onto future generations, possibly doubling their tax burden. Another article points out that private accounts can overwhelm people who are clueless about investment decisions. And, there are a couple columns in favor, including this one praising private accounts.
