[The perennial SS crisis is kind an amazing testament to how the big lie repetition technique can create a reality as unquestionable as a concrete wall and then it can disappear, *poof*, when people stop blowing air into it. 10 years ago, talking to Doug, Rep. Jerrold Nadler said even though it was true that social security wasn't in trouble, it was impossible to start with that premise because you'd get laughed out of town. And today, without anyone noticing, nobody's noticing. It seems almost commonsensical to say there's no big problem because obviously nobody's very worried. And then the boogie man returns ...]
http://www.commondreams.org/archive/2007/10/02/4254/
Published on Tuesday, October 2, 2007 by CommonDreams.org
From WMDs to Social Security: More Bush Stories
by Dean Baker
You remember George W. Bush, the guy who tricked the country into a
never-ending war in Iraq with stories about Saddam Hussein's weapons
of mass destruction and links to Osama bin Laden. Well, he still has
16 months left in the White House and he's determined to do yet more
damage with his famous "Bush stories" before he leaves town.
The latest Bush story is the cry that Social Security is going
bankrupt and will impose an unbearable burden on our children and
grandchildren. Of course, this is not the first time President Bush
has gone after Social Security. Immediately after the 2004 election,
he tried to use his new political capital to privatize Social
Security. As a result of a massive nationwide organizing campaign,
the privatization drive soon hit a dead end.
But Bush is not through with Social Security. In an apparent effort
to lay the groundwork for a future president to privatize and/or cut
the program, the Treasury Department is circulating a new set of
Bush stories designed to convince the public the Social Security
program must be changed.
The main thrust of these Bush stories is the old massive burden
line. The first point highlighted in Bush Social Security Story I is
that the program faces a $13.6 trillion shortfall. That should make
everyone really scared.
This number looks considerably less scary if we examine it more
closely. The bulk of this projected shortfall is attributable to
deficits projected for the 22nd century and beyond. The problem is,
life expectancies are projected to continue to rise through time. If
we never change the retirement age, then we end up supporting
ever-longer retirements.
Somewhere down the road, our great-great grandchildren will have to
decide how much of their life they want to spend working and how
much they want to spend in retirement. Assuming our
great-grandchildren teach their kids arithmetic, this should not be
a very difficult problem. Remember also, in 2100 living standards
are projected to be three times higher than they are today; so we
probably should not shed too many tears if the Social Security tax
rate is somewhat higher in 2107 than in 2007.
If we retreat from the science fiction future to Social Security's
75-year planning period (ending in 2082), the Social Security
trustees project a shortfall of $4.7 trillion. This still sounds
very scary because almost no one has any idea how much money $4.7
trillion is over a 75-year period. If we express it as a share of
projected income over this period, the projected shortfall comes to
0.7 percent or 70 cents on every hundred dollars of income.
Still scared? Suppose we use the numbers from the non-partisan
Congressional Budget Office (CBO) instead of the Social Security
trustees, since four of the six trustees are political appointees of
the President. CBO tells us the projected shortfall over the next 75
years is equal to 0.4 percent of projected income. This is
approximately 40 percent of the current spending on the war in Iraq
and about one-fifth the size of President Bush's tax cuts. In other
words, if the projected Social Security shortfall has you worried,
you should be absolutely terrified about the cost of the war in Iraq
and paralyzed with fear by the revenue lost as a result of President
Bush's tax cuts.
Of course, the projected Social Security shortfalls are not trivial,
but at this point they are still relatively distant. CBO projects
the program can pay full benefits, with no changes whatsoever, for
almost 40 years. It is entirely possible the situation will have
improved somewhat by then so that any tax increases and/or benefit
cuts can be pushed even further into the future.
One of the main reasons Social Security is projected to face a
shortfall is the government has implemented trade and labor policies
that shifted income upward, away from Social Security-tax-paying
workers. If we reverse these policies in the years ahead, then we
could get a more equal distribution of income, and at the same time
eliminate much of the projected shortfall.
There are other reasons the shortfall may prove to be smaller then
currently projected, most obviously through more rapid growth.
However, the main point is there are no serious projections that
show Social Security facing any sort of crisis or a situation
requiring action anywhere in the next two decades. The country
already got led into a seemingly endless war by accepting one Bush
story. It would be an entirely preventable tragedy if another Bush
story played a role in dismantling Social Security.
Dean Baker is the co-director of the Center for Economic and Policy
Research (CEPR). He is the author of The Conservative Nanny State:
How the Wealthy Use the Government to Stay Rich and Get Richer (
www.conservativenannystate.org). He also has a blog, "Beat the
Press," where he discusses the media's coverage of economic issues.
You can find it at the American Prospect's web site.