ocial Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund.
"So-called" is important, since it isn't really a trust fund. Its a government IOU to itself. Its essentially meaningless. As both the creditor and the debtor the government could arbitrarily set it to be 1000 times as big, or make it zero, or negative. The only difference would be that under the social security law when it runs out benefits have to be cut, so if it was bigger you would push off the cuts, and if it was zero the cuts would have to be made now. But if that part of the law where changed than having a "trust fund" with a quadrillion dollars would have the exact same effect as having a "fund" with $1. If your going to pay the money to the Social Security recipients, and the SS tax doesn't cover it, then it will come from other taxes whether the trust fund has all the money in the world or nothing. If your not going to pay the money (or are only going to pay part the way the current law calls for once the "trust fund" is exhausted, well you could make the same decision whatever level of money is in the "fund".
The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.
Their main headline figure estimate may be too pessimistic. It may also be too optimistic.
Meanwhile, an aging population will eventually (over the course of the next 20 years) cause the cost of paying Social Security benefits to rise from its current 4.8 percent of G.D.P. to about 6 percent of G.D.P. To give you some perspective, that’s a significantly smaller increase than the rise in defense spending since 2001
Only if your measuring percentage increase in the money spent on the program. Not if your measuring the percentage of GDP added to the program. And certainly not if your measuring the additional dollars being spent.
In particular, they rely on an exercise in three-card monte in which the surpluses Social Security has been running for a quarter-century don’t count
Because they don't. The "trust fund" is an accounting gimmick. Its as if I borrowed money from my retirement account to fund a sports car purchase, and then put IOUs in my retirement account and figure that means my retirement is covered.
The important figure is the total income and outgo from the government. Shuffling money between different parts of the government doesn't create an asset.
So think about it this way: In order to avoid the possibility of future benefit cuts, we must cut future benefits. O.K.
In order to avoid a sudden harsh cut of benefits, or alternatively a fiscal crisis, we keep benefits from rising as much as they otherwise would have, in a planned out way that lets people know what to expect. The actual amount spent would not have to be cut. Each year more dollars would be spent than the one before (at least until the baby boomers mostly die, then once again after that point as rising life expectancy drives up the number of people who are over the retirement age assuming its not indexed to life expectancy which it probably won't be) both in real and nominal terms. Also the payments for individual would continue to rise, they would not be cut. They just would not rise as much.
Conservatives hate Social Security for ideological reasons: its success undermines their claim that government is always the problem, never the solution
1 - Conservatives don't think that government is always the problem, even most libertarians (who after all are not anarchists) think its ALWAYS the problem.
2 - Social Security is essentially a ponzi scheme with the difference being that it can force new people in to the scheme. It is a problem. |
