I'm sure you've all seen the blizzard of Social Security "crisis" stories in the media over the past several weeks. Those who believe the endlessly repeated Bush soundbites about a "flat bust[ed broke]" Social Security system may not know that the current trust fund surplus is over $1.5 trillion, growing to an estimated $6.6 trillion in 2028. Dean Baker, co-author of Social Security: The Phony Crisis, offers a succinct summary: "President Bush has been working hard to promote belief in a Social Security crisis. Unfortunately for him, the numbers refuse to cooperate." The facts don't have to cooperate with Bush, though, as long as the press continues to cooperate by credulously spreading his message. To date, they have been almost perfectly compliant, repeating his "crisis" mantra, his "ownership society" slogan, and his fuzzy math (more on that later) while skipping those pesky contradictory facts.
Bush's plan, phrased as always in attractive-sounding slogans, really amounts to nothing more than "a guaranteed cut in benefits and $2 trillion in debt, plus the possible burden of supporting our parents if the stock market underperforms" (Matthew Yglesias, "There is no Social Security crisis." Harold Meyerson summarized Social Security's impending revenue shortfall as constituting:
"just 0.7 percent of national income, according to the trustees, or 0.4 percent, according to the Congressional Budget Office. That still amounts to a real chunk of change, but it pales alongside the 75-year cost of Bush's Medicare drug benefit, which is more than twice its size, or Bush's tax cuts if permanently extended, which would be nearly four times its size."
In order to present Social Security in the worst possible light, Bush's fuzzy math uses two different estimates for future economic growth: a pessimistic one (1.7%) for growth of the Social Security surplus, and an optimistic one (7%) for the growth of private accounts. Then he ignores the costs of replacing Social Security's non-retirement benefits (such as survivors' benefits and disability insurance) with private policies.
For those conservatives who truly want to fix Social Security rather than "reform" (destroy) it, there are two simple actions to take: raise the income contribution limit (so Bill Gates pays the same rate as his groundskeeper), and stop raiding the Social Security piggybank when trying to hide the true size of the federal deficit. The real crisis of Social Security is that, ever since the 1983 Social Security tax hike (with the exception of the end of Clinton's second term), Congress has squandered the Social Security surplus and used a "unified budget" to obscure that fact from public attention.
Michael Kinsley not only provides a logical proof that - on a macroeconomic level - privatization can't work as advertised, and he also points out that the budgetary reasons for tinkering with Social Security are bogus: since "Republicans control the entire federal government. If they want to cut government spending, they should do it. They don't need to trash Social Security along the way."
For more details, the best websites are American Prospect's Special Report on "Saving Social Security" and The Social Security Network. Others include the "Myths and Misperceptions" section of the "Truth about Social Security" website, Jason Furman's analysis at the Center on Budget and Policy Priorities, and Robert Kuttner's analysis from the Boston Globe. For the heavy-duty policy wonks, Gene Sperling's proposal from the Center for American Progress is well worth reading.
Even conservative pundit George Will admits, "The president says Social Security should be reformed because it is in 'crisis.' That is an exaggeration." and - more tellingly - that "the philosophic reasons for reforming Social Security are more compelling than the fiscal reasons." This indicates the neo-cons' antipathy toward Social Security. Thomas Frank analyzed this mentality ("Get Rich or Get Out: Attempted Robbery with a Loaded Federal Budget," Harper's Magazine, June 2003) in context of Bush's 2004 budget:
"The real problem with Social Security, of course, is that it is a popular and successful program. Its existence confirms that there are economic functions better served by government than by business, and as such it provides a foundation for the activist government that pro-business conservatives like the current president have dedicated their lives to destroying."
Why is there a seemingly endless amount of money available to invade other countries, but such a reluctance to help our own citizens out of poverty? Why does Iraq in 2005 bear such a resemblance to Vietnam in 1967? Why don't politicians ever learn?
Thanks for reading.
Quote of the Day:
"A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death. America, the richest and most powerful nation in the world, can well lead the way in this revolution of values. There is nothing, except a tragic death wish, to prevent us from re-ordering our priorities, so that the pursuit of peace will take precedence over the pursuit of war. [...] If we do not act we shall surely be dragged down the long, dark and shameful corridors of time reserved for those who possess power without compassion, might without morality, and strength without sight."
Dr. Martin Luther King Jr. ("Declaration of Independence from the War in Vietnam," April 1967, Manhattan's Riverside Church)