Social Security

The Washington Post and New York Newsday has an Op-Ed by a guy named Steve Rattner, who is identified as "managing principal of Quadrangle Group LLC, a private investment firm" and who, no doubt, stands to make a giant carload of money should Social Security be privatized.

Among other various pieces of fecal matter, he says the following:

"We can debate endlessly what constitutes a 'crisis' but not that Social Security faces a major financial challenge. According to actuarial estimates by the system's trustees, Social Security costs will begin to exceed revenue beginning in 2018 - not so far off."

"Costs will begin to exceed revenue beginning in 2018."

But under Bush's proposal, costs will begin to exceed revenue in 2006 - twelve years sooner. Bush "solution" includes having the trust fund pay off more than it takes in IMMEDIATELY, and running a two trillion dollar deficit .

In addition, Rattner says,"We can debate endlessly what constitutes a crisis."

No, we can't. The fact that one party is in denial doesn't mean that there is endless legitimate debate. Rattner would like to pretend that the question of whether or not there is a crisis is a matter of reasonable debate. But it isn't. There is no crisis - period. The fiscal health of Social Security is guaranteed until 2042. It will take in 80% of it's funding after that, and that is based on extremely pessimistic projections. That is not a crisis. It isn't anything like a crisis.

Not only is Social Security not in "crisis" - it's in better shape than damned near any Federal Government program. It runs a surplus; most of the others are running deficits. In fact, the surplus from Social Security is used to fund OTHER programs that aren't IN such good financial shape.

If you use the word "crisis" to describe a program that is in the black, but MIGHT be in the red 37 years from now if things go extremely badly - what word do you use to describe all those government programs that are running deficits right now?

Ten years ago, Social Security trustees predicted that the system would become insolvent in 35 years - 2029. Five years ago they said it would happen - in 35 years. Insolvency was put off till 2034. Today, they're predicting insolvency in 37 years, in 2042.

That's because they base those projections on extremely pessimistic assumptions. Assumptions that - if they should prove true - would make investing your retirement money in private accounts disastrous. As Paul Krugman has pointed out, the snake-oil salesmen use ONE set of projections - pessimistic ones - for prediciting the future of Social Security; and a DIFFERENT set of projections - optimistic ones - for predicting the future of private accounts. This ploy is so obvious that it's perpetrators SHOULD be laughed out of the room. And they WOULD be, if we actually had a real press.

The Republicans don't dislike Social Security because it doesn't work. They don't like it because it DOES work, and therefore demonstrates the falsehood of their economic philosophy..