You can fool some of the people all of the time, and all the people some of the time, which is just long enough to be president of the United States.
Top 5 Social Security Myths
Submitted by Sisyphus on Thu, 07/29/2010 - 1:57pm.
Consider this as another in my series providing election year ammunition. This one is targeted for the lies spread by deficit hawks gunning for Social Security. Send them an email.
Top 5 Social Security Myths
Rumors of Social Security's demise are greatly exaggerated. But some powerful people keep spreading lies about the program to scare people into accepting benefit cuts. Can you check out this list of Social Security myths and share it with your friends, family and coworkers?
Myth: Social Security is going broke.
Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.6 trillion surplus (yes, trillion with a 'T'). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever.1 After 2037, it'll still be able to pay out 75% of scheduled benefits--and again, that's without any changes. The program started preparing for the Baby Boomers retirement decades ago. Anyone who insists Social Security is broke probably wants to break it themselves.
Myth: We have to raise the retirement age because people are living longer.
Reality: This is red-herring to trick you into agreeing to benefit cuts.Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than did 70 years ago. What's more, what gains there have been are distributed very unevenly--since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half. But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit cut.
Myth: Benefit cuts are the only way to fix Social Security.
Reality: Social Security doesn't need to be fixed. But if we want to strengthen it, here's a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come. Right now, high earners only pay Social Security taxes on the first $106,000 of their income. But conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.
Myth: The Social Security Trust Fund has been raided and is full of IOUs
Reality: Not even close to true. The Social Security Trust Fund isn't full of IOUs, it's full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States. The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts. President Bush wanted to put Social Security funds in the stock market--which would have been disastrous--but luckily, he failed. So the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be.
Myth: Social Security adds to the deficit
Reality: It's not just wrong -- it's impossible! By law, Social Security funds are separate from the budget, and it must pay its own way. That means that Social Security can't add one penny to the deficit.
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doggone facts
"Retirees are living about the same amount of time as they were in the 1930s."
While "about" can cover any amount of variation you like, this claim didn't sound credible. Googling turned up one believable source that shows a steady increase in life expectancy at age 60, 70, 80 for each of the subgroupings shown, and therefore for "all." Which is what I'd expect, given the advances in medicine (and nutrition, etc.) in the last 60-70 years.
I hate to see errors weaken the argument, since the other points made are relevant and valid.
Their source is
here. You can knock yourself out here as well.
My point survived
First one is not so much a "source" as an argument against raising the retirement age, which I think can be made on its own merits.
It's not a "myth" that people are living longer, and enjoying longer retirements. Yes, life expectancy at birth has increased by more than expected life in retirement.
I can certainly agree that raising the retirement age amounts to a reduction in benefits... which I hear Republicans are way against now, so they shouldn't want that, eh?
You will be assimilated
Sure its a source. Its their source, footnoted and everything. Therefor it must be true. Even though it makes no sense whatsoever.
I'm not sure it "amounts" to a hill of beans.
How About Later?
But what about after 2037? Or later, when my kids might want to collect? By then, there will be 2 workers paying into Social Security for every beneficiary; since the Trust Fund will be gone, they'll need to make changes before then.
Saying the rich need to pay their "fair share" doesn't really pass the smell test, unless you'd agree that they should get correspondingly higher payouts when they retire. Otherwise, if they're contributing without any hope of recovering what they put in, it's just a tax. If that's what people want to do, that's fine, but I think calling it their "fair share" is a little bit of a rhetorical stretch. If you want to tax us, call it a tax.
I would hold that paying interest on the Treasuries held by the SSA in fact does increase the deficit -- the money used to pay that doesn't come from payroll taxes (actually, it might, since there's no "lockbox"), so it seems like it would have to come from somewhere -- like selling more government bonds (i.e. "the deficit").
Also, starting in 2016 and lasting through 2037, Social Security will be able to draw on regular budget funds (which is why they'll be able to pay full benefits until then), so your last point, while valid now, won't necessarily be true by the end of President Obama's 2nd term -- not too far away.
Saying that Social Security doesn't need to be changed might result in short-term political gains, but I'm not sure that the "reality-based party" needs to make that their centerpiece.
"When all else fails, revel in the absurdity of it all"
HOW to adjust it is of the essence
The Bush/Repub concept was that we should change it into some sort of defined contribution plan, where we all have pension accounts.
Even if the market's tanking hadn't exposed what a bad idea that could be for an unlucky wave of retirees, it would have failed to recognize the essential insurance function of the Old-Age, Survivors, and Disability Insurance program. (Maybe that's why "Insurance" is in the name, I don't know.)
If you ask me, it's crazy easy to fix. Raise the OASDI wage limit, or eliminate it. Means test the payout. All it takes is a sensible hand at accounting. The reason we're having this discussion is the unresolvable hatred certain parties have for the idea of the "social" element of Social Security. For them the question is not about "adjusting" it's about "killing."
The new 3-Mile Island
Fear of Social Security going broke is the new 3-Mile Island.
When the reactor at 3-Mile Island failed, no one was injured or contaminated. 34 years later, no evidence of radioactive damage, to humans or environment, has bee found. But the fear that worse could happen, even with the facts that shutting down a worst-case reactor accident safely was accomplished and planned for, made no difference. Fear, nothing but unreasoning fear, killed the U.S. nuclear power industry.
The fact that the facility's other reactors continued to pump out power, and continues on to this day, made no difference in the fear factor... the notion that nuclear energy was safe was gone forever because we all knew A-bombs kill people. The vast distinctions between reactor and bomb made no difference.
That's what's going on now with Social Security. It has been so safe for so long that it's security was a given. As soon as the possibility of threat emerged in the Great Crash, the same unreasoning fear took over, and no amount of facts are going to assuage it.
Fear is a Republican staple. Fear is what created the rise of the party, fear has sustained it for a half-century, and now, fear is all they have. The picture of Grandma dying, starving ins the cold and dark, simply overwhelms any rational thought, especially when Grandma is doing the thinking. Changing that makes changing the beliefs from 3-Mile Island pale in comparison. I don't know if those fears can ever be dispelled, but when more Americans go back to work, they will fade, hopefully.
My kids, all in their prime productive years, are very pessimistic about Social Security failing. If we as Democrats can find some way to re-assure them, and create a more optimistic view of America's future, I believe this is where the real Democratic Party's potential lies. We are never going to take the fear away from the older voters, so we have to go out and aim for the younger ones, who are less fearful, simply because they're young.
Quantifying the R's proposed cut to SocSec
NYT's "Your Money" feature: Social Security Jitters? Better Prepare Now
The dapper and slightly off-color John Boehner has no worries about a 20% cut in Social Security benefits. His retirement is well covered... by that same government he loves to sneer about.