SPRING BREAK BLOG: “Social Security fears baseless”
(Ms.)Froma Harrop
March 31, 2008
The stock market hasn’t been this nasty since the 1970s. House prices continue their dive, and consumer confidence has gone splat. The rocketing federal budget deficit will probably orbit Mars by the time the government finishes cleaning up the mess left by the housing bubble it so blithely let fester.
Good job, fellas. The Bush administration doesn’t have a heckuva lot of credibility left on economic matters. But some members think they have one little ideological game left to play. Scare people out of their wits about Social Security.
For Americans up to their eyeballs in debt – or whose dreams of leisure rested on rising house prices – Social Security remains a star of stability in the rising gloom. Fortunately, Social Security is doing just fine.
But the financial geniuses in the Bush administration still want to mess with it. And the only way they can stampede the public into doing something stupid to Social Security is to portray the program as a very sick patient needing to be saved.
Economist Dean Baker has spent long years trying to save Social Security from its would-be surgeons. A founder and director of the progressive Center for Economic and Policy Research, Baker continually tracks the tireless efforts to undermine confidence in the program – often helped by liberals swept up in the phony panic.
Consider the comments following the Bush administration’s new report on Social Security and Medicare. “In fewer than 10 years,” Treasury Secretary Henry Paulson warns, “cash flows are projected to turn negative – meaning that we will draw upon general revenues to support withdrawals from the (Social Security) Trust Funds in order to pay current benefits.”
Paulson is referring to 2017, when Social Security payroll taxes may no longer be able to cover benefits owed retirees. To keep the program on track, he says, the tax may have to be raised or the benefits cut.
“I think this is really dishonest,” Baker told me. “2017 means zero to the program.”
True, the government must dip into the Trust Funds – which hold the Social Security surplus – in 2017. “But that’s the reason we built up the surplus,” Baker notes.
“When we got to 1982, the thing was literally out of money,” Baker recalls, “but no one missed a check.” Congress and the Reagan administration responded by raising the Social Security payroll taxes and starting to save for the future challenge. Enough money now sits in the Trust Funds to get us to 2041, the program’s trustees report.
That the government would someday have to “support withdrawals from the Trust Funds” hasn’t been a secret for 25 years. Nor is this merely a matter of Americans repaying themselves, as many conservatives argue.
The money in the Trust Funds, Baker notes, came from the very regressive payroll tax on workers. The general funds that support the withdrawals come from the very progressive income taxes – which also cover investment income.
What should we do about Social Security?
“I would just say, ‘Let’s sit on this,’ ” Baker answers. If come 2030 Americans see problems looming, he adds, “we can do something.”
Much could change in over 20 years. Productivity gains have helped fewer workers pay for more retirees in the past and could in the future. And longer life spans may also alter the dynamics.
“How long into their lives should someone born in 2020 work?” Baker asks. “I have no idea.”
If politicians want to agonize over retiree benefits, they have their hands full with Medicare. Paying for that program will be a bear of a problem. But they should keep their paws off Social Security.
Presidential candidates, please take note.
Social Security benefits the retired, disabled, and survivor’s families. Without this, these people face a great obstacle to overcome. Money that was always there has all the sudden disappeared. I constantly fear that I will work my whole life (supporting those older than me) and by the time I can retire, Social Security will just be something of the past. I view this as everyone waits their turn and when my group is done waiting we won’t get it (the constant trauma of class of 2008). During the Great Depression the Social Security Act was passed to save older Americans from poverty. Social Security is a major source of federal revenue. So eliminating it or altering it will have a great influence on obtaining such a great chunk of federal revenue. I don’t know exactly the direct affect it would have but I agree with Baker in stating “I would just say, ‘Let’s sit on this,’ ” Baker answers. If come 2030 Americans see problems looming, he adds, “we can do something.” The point of the Social Security Act was to prevent poverty during the Great Depression (a time where recession was even more prevalent than it is now). So I don’t know how messing with it during a time on recession. I believe it will only further the time we are in that recession.
-Caitlin Barschig
This is news to me that we have enough money in the trust funds to get social security to 2041. I though it would be another 10 years or so before those baby boomers sucked up every last dime we have. This program called social security is doomed as long as people have a will and means to live longer and longer. What I think would be smart would be to base the age where people can now collect social security off of the average life expectancy. Because the life expectency has been increasing since the creation of social security, the government has been sinking deeper and deeper into debt. It simply means that more people are beyond that age barrier and now collecting money. Other things have adjusted accordingly in government, like the amount of money a person can contribute to a campaign. That amount adjusts according to inflation of the US dollar. A possible problem with this idea is that women and men have different life expectencies. Women tend to live a bit longer than men, so would men be able to collect social security before women could? That would be means for a whole bunch of turmoil.
Social security is a obviously a big problem that we as a nation keep putting off dealing with; politicians won’t touch it because the elderly are a large constituency, but by not solving the flaws in the Social Security program, we are just hurting ourselves for the future. I of course am a simple-minded, naïve, high school student who is probably looking at this issue in too simplistic a way, but I don’t quite understand why it is so difficult to solve the Social Security dilemma. Why can’t the age required to start receiving Social Security benefits by the elderly be raised? The Social Security Act was passed in 1935. In 1935, age 62 probably sounded like a pretty good age to start paying people their retirement benefits because, frankly, the average person didn’t make it much past their retirement age. But now, average life expectancy is in the mid 70s, as opposed to the life expectancy of late 50s and early 60s in 1935. Someone needs to do something, so they may as well try raising the age of eligibility and see what happens. It couldn’t hurt. But, like I said earlier, we will probably never get anywhere with Social Security because the senior citizens would freak out and any politician vying for their votes would most likely not do so hot in their next election.
We need to do something about Social Security before we develop deeper problems than what we are already dealing with. As we have learned from our books, Social Security is a big federal revenue, however, I think that the age limit for people considered eligible for these types of programs should be raised. America is already trillions of dollars in debt and it only seems to be getting worse. If we just sit back and see how things go then I think we will find ourselves in a much worse situation. Americans are living longer than in 1935, when Social Security was created. Our nation is changing rapidly with the development of technology and it has helped Americans to live longer. If we made the eligibility age older than America wouldn’t struggle so much to pay for all retired, disabled, and survivor families. The government already has other uncontrollable expenditures to provide for. The government cannot choose who they give money to because if they meet the requirements then they become eligible. Too many Americans are qualified for programs like Medicare, Medicaid, or Social Security. Our society relies too much on our government to provide for them and I think that people should take a little bit more responsibility or our nation is just going to go deeper into debt. Eventually we are going to have to deal with the issue of Social Security and sooner is better than later.
I like this stance towards social security. Let my kids deal with it. I think everything will work out fine if we let this thing take its course. Because I think this article is right when it says that if it gets really bad we’ll just raise taxes and that will sting a little bit but not too bad. And if that doesn’t work I’m sure we’ll figure out a way we always do. Worst case scenario it doesn’t work out, social security goes broke and I end living with my kids. I’ll be fine with that. Right now there are more important things to worry about like terrorism or America’s unemployment but right now I’m not too worried about if Palm Springs is in my future. And our other problems like financial deficit, is there a limit? From my knowledge of how borrowing works, as long as other countries are willing to give, then we can keep taking. We have always been in debt, we are in debt, and we will always be in debt, it just depends on how much we are in debt by. And until a country threatens us because of our debt, I don’t know how much of a time limit we have on paying this debt back.
Did this author say social security is fine? Social security is probably fine for this person, and the next few decades or so, but when it is time for my generation to start withdrawing for it there will be no more and it will have collapsed. Fairly soon there will be more money taken out then being put in and the funds will run out. The baby boomer generation is going to take all the money. Something needs to be done to fix social security; however we should not have messed with it in the first place and it would have been fine for a long time but at this point it does not look to promising. It also seems a lot of people are saying this isn’t a real big problem, and a putting it off. Well we really should take care of it now or else in forty years we might have a bunch of homeless old people living on the street begging for food (that might be a little bit of an exaggeration). People don’t want to worry about thing if they are not a problem right now, but if we don’t do something now it will be too late. We have talked about Social Security a little in class, one thing that came up as a solution was to euthanize all the old people. Since that might be a little extreme I think we should just raise the age at which people can start withdrawing at, especially with the life expectancy going up and everything. Other than that I really don’t know what would be a good solution at this point. Or we could just start discriminating against certain people and only offer social security to the people who really need it and not those who could do without.
Honestly I’m rather confused over what is going on with Social Security. Everywhere you turn there are conflicting reports over whither or not Social Security is on the right track. This article seems to go against everything I have heard about SS. One point that the author brings up that I haven’t heard anything about is the “Trust Funds – which hold the Social Security surplus”. I am really quite curious about these funds, I mean how much surplus can we be talking about? Social security is an uncontrollable expenditure, (meaning that the government must continue to pay regardless of whither or not they have already used the funds appropriated for it) so if there really are major surpluses that means we are way over budgeting right? If what the author and her sources claim is true, and the program really can last until only 2017 before pulling money from surplus trusts then it seems to me that we should start looking at solutions sooner rather than later, when we really run out of money and options. The trusts should be a backup incase something unforeseen happens, not our primary plan. If we know things are going south why should we wait until it goes bust before beginning to revamp it?
Andrew Barnes
Social Security, should we or shouldn’t we be worried about its future? It seems as though the outlook on this issue differs with every individual you talk to. Maybe we shouldn’t worry about it until this “problem” becomes a little bigger and more serious. In the mean time, we are just worrying ourselves over something that may not even be a huge problem to begin with. At the moment, we still have the Social Security program up and running, helping the elderly pay off medical expenses and providing money for decent living. Sometimes I think that people just look to far ahead and make predictions that nobody knows will play out for sure; and this gets us nowhere. Sure, it is obvious that the number of retirees is, and will continue to be, higher than the amount of workers due to the “baby boomers”, but no one knows what to expect beyond that. As a source of federal revenue, this is truly an important source financially so we should do whatever possible to keep it around. What we pay may increase along with the retirement age, but these are changes that we all will need to adjust to in order to keep Social Security going. If I have to begin paying a little bit more and have to work a few years longer in order to know there is a secure retirement waiting for me, then I will; sometimes there are just some things that you need to do to benefit people now and yourself eventually.
Social Security is definitely a major problem for the future. For as we have learned, more individuals are receiving social security benefits, with less people paying for those individuals. At this rate, the nation will be unable to support the growing number of recipients of the program and there for major changes need to be done in order to sustain the program. I believe that in order to control social security and keep it running smoothly, the minimum age in which you may withdraw from it needs to be raised and taxes need to be increased in order to compensate for the extra money required. This is because since individuals are living longer than they did in 1935, the prior regulations on receiving benefits needs to be up dated and modified in order to fit today’s changing world. I also believe that social security needs to be tightened and that less money should be awarded to people. This is because the nation is sinking further into debt and individuals should take responsibility for them and invest their money better, in order to help them get through the times ahead. This would help ease the burden from the government and help relieve adding more money to the nation’s debt.
I think that we all know that Social security right now is a problem. I think that an unforeseen and unmentioned problem that social security will see is the effect of the baby boomers. Pretty soon the baby boomers will start to retire and then that will be a huge portion of money that will need to come out of the Social Security fund, and I don’t think that the current program can handler it. Let alone I don’t want to have to pay into the Social security program and then be not get the money back that I paid into it over the years that I worked. If the system does end up failing I don’t have a problem with my parents living with me because they supported me all these years that I think I can return the favor. The only problem with taxing more for social security means that people will have less money to spend and as a result the economy might go down hill. (This is assuming that we would start taxing more for Social security in 2017) I think that it would be a good idea if we set a limit on who can get Social Security money, and only the people that really need it can get it. I think that might solve some of our problem.
What if tomorrow never came?
Do you know something I noticed in this article—sorry, scratch that—Do you know something that I missed in this article? Maybe the year 2008! There were dates laid out about 2017, 2020, and 2041. Great! That is so amazing that we have enough money for the people in 2041 and that we will eventually have to withdraw money from the Trust Fund in 2017 that supposedly has enough money up to 2041. Honestly I’m disillusioned by this optimism with Social Security. Do they not realize we have a debt rising to 10 trillion dollars? Do they even care? “I would just say, ‘Let’s sit on this,’ ” Baker answers. If come 2030 Americans see problems looming, he adds, “we can do something.” Wait until 2030? Great, so we will wait until we are so far in debt that our country will be overrun by China and Russia in exchange for our debt that we owe them. Honestly we deserve to be punished for our debt if it continues to escalate like it has. Do we realize that the majority of debt is from areas like the Middle East, news flash: Muslim countries call us the Greater Satan, or China: Communist, or Russia: with Putin indirectly putting up puppet governments. Maybe the puppet government can’t be proved and you may call me paranoid, but honestly let’s think about it. What is the number one focus of all people in elected office—reelection. Hypothetically, if everyone for the next 20 years only focuses on reelection, where does our debt problem play into all of this? Social Security? Immigration? Terrorism? Our country is lead by a group of people selfish men and women who will only deal with the problem when it is “convenient.” (I can say they are selfish because I’m human too and I know I am selfish.) I guess it will be “convenient” when the enemy—whoever it may be—is already on top of us with no escape. I’m afraid to ask, but, what if 2017 never came and our economy wasn’t going to get any better by 2013? 2010? I once read this in quite an amazing book: Do not worry about tomorrow, but focus on today because tomorrow may never come.
Danny Porter
Everyday tt seems even harder to know what is right about Social Security these days because of the ambiguity and red tape that the government puts on Social Security. Many “experts” say that our generation is basically hosed and the money will dry out well before we are ready to retire, yet then other “experts” have their reports like this come out and say that we are going to be set until the year 2041. So I don’t really know what to believe anymore. I mostly think this is some what connected to the lame duck President, this one especially so that we can get out minds off of the failing war in Iraq and Afghanistan. I guess it is working because we and other people are talking about it. I don’t know if it will all work out in the end like some people will believe that will magically happen or what else could happen so I guess I will just try and save for myself just in case Social Security is not there and so I won’t have to rely on the government to save my hide especially when I’m about ready to croak.
Social Security benefits every American citizen in the United States from the retired to the disabled. Social Security was developed as a safety net program for these people and without this program many people would find themselves in poverty. You read so many contradictory articles about Social Security these days that it is difficult to know who to believe. I wonder if Social Security will be there when I decide to retire. Just watch, I will work my whole life and when I decide to call it quits, Social Security will be no more. My mom told me that I will have to work until I am about 68 years of age until full Social Security benefits kick in for me. I was looking forward to playing golf at 63 and now I will have to work longer if I want full benefits. We have to remember that Social Security is a major source of federal revenue for the government. If we got rid of Social Security or if we altered it, where would federal revenue come from then? I think we will have to play the “wait and see” game with Social Security. I, however, believe that some of the solutions offered to “save” Social Security for the future generation have merit and deserve investigating in the meantime. Why not raise the age that people can first start to collect benefits from 62 to 65? Or why not raise the income level on which social security taxes can be imposed? Or how about even raising Social Security taxes another ½ percent? I don’t believe the social security trust fund needs to run out of money if Congress is proactive. Congress and the President just need to act.