No Panacea for Social Security
The headline of this AP article as it appeared in my local newspaper today says it all: “Options for fixing Social Security all involve pain for someone.” The article does a good job of summarizing and comparing a number of options for partially or completely filling the $4 trillion Social Security deficit that is predicted over the next 75 years–although it doesn’t address personal accounts which, as many backers acknowledge, is not by itself a way to solve the OASDI budget problem over the next generation per se but rather a way to permanently address Social Security’s demographic problem and give people more freedom of choice in saving for retirement.
Of all the options mentioned in the article, it seems only fair to me that if today’s workers must endure a tax hike then today’s retirees should see some benefit cuts. In any case, the article should be a must-read for anyone interested in this debate.
4 Responses to “No Panacea for Social Security”
…it seems only fair to me that if today’s workers must endure a tax hike then today’s retirees should see some benefit cuts.
Sure. Fair enough.
But what about those of us who have been paying, and continue to pay, OVER the amount required to meet the needs of the system?
It strikes me that “fair” ought to have something to do with protecting at least that portion of our taxes, specifically tagged for Social Security, from misappropriation by a spendthrift Congress and administration.
And by the way, all those years that our FICA money was being used for the general fund, we were (and are) paying ade facto INCOME tax, from the first dollar earned, without the advantage of any deductions or exemptions.
If old timers don’t sit still for benefits cuts, this will be part of the background.
The big problem with the AP article is one shared with many other articles on it that try to fit what needs to be a rather lengthy in-depth analysis into a space too short for it. Nowhere does it mention that there are in fact several different projections by the SSA and what needs to be done to what extent depends on which one of these you wish to believe. The Bush administration takes nothing but the most pessimistic of these and then proceeds to ignore what this pessimistic view would also mean to the returns of the private accounts they are pushing as well as the amount of money coming into the Social Security coffers. If you can’t do something long enough to point out all of the facts (or at least most of them) then you do your readers a disservice.
I’m just not convinced that we particularly have a social security problem. It pays for itself a lot better than most other federal programs.
We do have a general fund problem. That’s what we need to fix. Either raise taxes or cut services or both. Quit borrowing. But, Nixon was the last Republican to balance a budget. So, I guess we can forget about a balanced budget until a Democrat takes the White House.
Although, if Bush gets his social security “reform” my hat would have to be off to Alan Greenspan for a remarkable bait and switch:
Presto! A more regressive tax has just been imposed to fund general expenditures. Bravo Maestro! Bravo!
I have a middle option:
1.) Cut future benefits
2.) Legitimize illegal Mexicans working in America, and have them pay into social security (to the degree they aren’t already)
This is a political win to the party that brings it about, and it doesn’t involve much pain without alot of gain for the participants. The only downside is that many illegals might already be paying into the pot, I’m not sure about that.