Social Security doing just fine...

Social Security doing just fine

http://www.pww.org/article/articleview/4776/

You may have heard that our Social Security system is headed for

trouble when the generation known as the baby boom begins to retire.

You heard wrong.

In fact, the first baby boomers will begin to draw Social Security benefits

just four years from now.

Maybe then this ridiculous urban legend will finally be put to rest.

You don’t have to take my word for it. Anyone with a computer and a modem can go to www.ssa.gov
and read the Social Security Trustees’ report. It shows that the program can pay all promised
benefits through 2042, without any changes at all. That’s nearly four decades.

Most of the baby boomers will be dead by then!

If you’re the type who likes to worry about unlikely events that may occur in the far-off,
science-fiction future, you’re still going to have to find something else to worry about.

The Social Security Trustees plan for 75 years, and even for this immensely long period

of time, the much-hyped gap in financing is quite small relative to our economy.

In fact it is less than three-quarters of one percent of our income.

To put this in perspective, consider that the average wage will be about 45 percent higher –
after adjusting for inflation – in 2042 than it is today. Will we be willing to pay a little
more for our most popular federal program, in order to finance the retirement of people who
are living longer? I would guess yes, because our population has been aging for decades and
Americans have always been willing to come up with the money. The additional funding would be
less than our payroll tax increases in the 1950s, 1960s, 1970s, or 1980s.

But in any case this will be decided by future generations. In the mean time there’s no cause
for concern. The Social Security Trustees are not trying to paint an overly-optimistic scenario.

The numbers above are assuming less than 2 percent annual economic growth, the slowest in our history.

And four of the six trustees that signed off on these projections were appointed by President George W. Bush.

The Bush administration has tried to paint as dismal a picture as possible of Social Security,

in an effort to partially privatize the program.

A number of verbal and accounting tricks have been used to convince millions of Americans that
Social Security needs “reform.” One is to lump the program together with Medicare, which has
costs that are projected to rise explosively.

:bluebox: But Social Security is a separate program from Medicare, financed by different taxes. :bluebox:

And even Medicare’s problems are not due to the government program itself. Nor are they primarily
a result of demographic changes, such as the baby boomers’ retirement. Medicare’s cost increases
are driven by the cost of health care in the private sector, which is rising once again at an unsustainable rate.

In fact, the United States now spends 15 percent of its income on health care – almost twice
as much as the average for other high-income countries. This is a serious problem that will have
to be fixed in the not-to-distant future. But it has little to do with demographics, and nothing
to do with Social Security.

There are other disturbing economic trends: besides rising health care costs and an
increasing share of the burden being shifted to employees, most Americans are facing
increasing job and retirement insecurity. Over the last 30 years we have also suffered
the most massive re-distribution of income in American history, in which most of the
labor force barely shared at all in the gains from economic growth.

There are plenty of economic problems to worry about, but Social Security is not one of them.

Mark Weisbrot is co-director of the Center for Economic and Policy Research (www.cepr.net), in Washington, D.C.
Reprinted from Knight-Ridder/Tribune newspapers with the permission of author.

Obama is committed to ensuring Social Security is solvent and viable for the American people, now and in the future. Obama will be honest with the American people about the long-term solvency of Social Security and the ways we can address the shortfall. He will work with members of Congress from both parties to strengthen Social Security and prevent privatization while protecting middle class families from tax increases or benefit cuts. As part of a bipartisan plan that would be phased in over many years, he would ask those making over $250,000 to contribute a bit more to Social Security to keep it sound.
...
Social Security and Pensions: In the midst of the 2005 debate over Social Security privatization, Obama gave a major speech at the National Press Club forcefully arguing against privatization. He also repeatedly voted against Republican amendments that aimed to privatize Social Security or cut benefits. Obama has also voted to force companies to properly fund their pension plans so taxpayers don't end up footing the bill.

http://www.barackobama.com/issues/socialsecurity/

Obama also said McCain wants to privatize a portion of Social Security. McCain has praised the notion of letting younger workers place a portion of their Social Security taxes into a package that is invested and follows them to retirement, but he has not made it a campaign promise.

http://ap.google.com/article/ALeqM5hyEHa5vNXXyk_a13jhW9zJeN7m8QD9318FHO0