Social Security was a great moral success of the 20th century, and we must honor its great purposes in this new century … The system, however, on its current path, is headed toward bankruptcy.This is simply untrue. Social Security will never be bankrupt. As long as there are workers and employers paying social security taxes, the system will have an income. Bankruptcy is such a dishonest term.
If you use the economic projections that Bush uses to promote his tax proposals, Social Security will continue to pay projected benefits forever. Apparently, though, this is a complex economic modelling issue. The worse case scenario is that half a century from now Social Security benefits will have to be reduced from what the are expected to be then to what they are now (in inflation-adjusted dollars). So the worst case is to continue with what we have now.
The reason this would be a reduction is that the average retiree then is expected to have a higher income level than the average retiree now. In the worst case Social Security may not be able to keep up with those increased benefit demands. So the average payment would be what it is now, but the average expected benefit would be higher than what it is now. So the system is not and will never be bankrupt. Bush is simply a liar.
Most people would be willing to talk about making Social Security, or any system, better. I strongly believe that If it ain't broke, don't fix it. is the wrong way to approach things. Social Security ain't broke. But that doesn't mean it can't be improved. See, for example, my posting on Social Security, negative income taxes, and forced savings accounts.
But to talk to someone as dishonest as Bush about anything seems like a losing proposition. He won't engage in an honest discussion. He will lie and mislead until he gets what he wants. He isn't an honest negotiating partner. He is a power-driven demagogue, who is attempting to remake the country in his own dishonest image — while telling misleading stories to his gullible followers.
Mark Weisbrot continually provides good coverage of Social Security issues. Here's one of his latest columns: WHAT CRISIS?. Here's another.
Finally, a few additional points.
- Bush wants to spend about $4 trillion to convert Social Security to some other system. Can you think of any federal program that we should commit $4 trillion to at this point?
- Let's assume that half a century from now, we will have to reduce Social Security benefits or fund them in some other way. What's the problem with funding them? As Weisbrot points out,
In fact the projected shortfall for the next 75 years is smaller than shortfalls covered by adjustments in each of the following decades: the 1950s, '60s, '70s, and '80s. It is also about one-third the size of the tax cuts enacted during the Bush administration.We have successfully adjusted to social security funding issues in the past. We can do so again half a century from now.
- The federal government counts social security income as part of its total revenue. If it were not for the excess being paid into social security, our official deficit would be a quarter of a trillion dollars higher than it is. Since social security can be considered part of revenues, it can be considered part of expenditures. Where is it written that no social security benefits may be paid unless they are funded by social security taxes? If payroll taxes aren't enough to meet the needs of social security recipients, let's use other sources of revenue. Payroll taxes are too regressive anyway. Again, see my earlier posting: Social Security, negative income taxes, and forced savings accounts.