Rob Knight

Social Security Intro

December 17, 2004

This one is for us.

Next year will begin a new congress featuring stronger Republican majorities in the House and Senate. Thus will begin our battle to keep Social Security in place and viable for our generation (twenty-somethings) to retire. Make no mistake, this will be a battle, and it will be a battle to keep Social Security.

I speak in those terms because the President is a wealthy man from a wealthy family and will not be using the program, and he represents the party that has always worked against the Social Security system.

Social Security works because we, the current workforce, pay for the benefits received by today???s retirees. As long as people are working, there is money for Social Security. It (potentially) goes into a trust fund that pays benefits to current retirees. Good thing. If the economy does not change from its current level, in 2018, the Social Security System will no longer cover 100% of its annual payments to retirees. At that point the Trust Fund that was set up during the 80’s to provide for the large number of retiring baby-boomers will be needed to cover Social Security’s annual payouts. The only problem is that since the trust fund was created, the government has been raiding it to cover budget shorfalls. So, the government owes retiring baby-boomers their Social Security payments. Does this mean the system will go bankrupt?

No.

It means that we will need other sources of revenue to pay the baby-boomers their due benfits. In this morning???s New York Times, columnist Paul Krugman writes:

…extending the life of the trust fund into the 22nd century, with no change in benefits, would require additional revenues equal to only 0.54 percent of G.D.P. That’s less than 3 percent of federal spending - less than we’re currently spending in Iraq.

And:

“…it’s only about one-quarter of the revenue lost each year because of President Bush’s tax cuts - roughly equal to the fraction of those cuts that goes to people with incomes over $500,000 a year.

Sound like a crisis? No. Sounds like with some fiscal responsibility, and careful planning, all of us twenty-somethings could easily retire with a healthy Social Security system. However, the current framing of the argument is that this is a broken system that needs an “overhaul.”

This is our fight. The proposed privatization will effect us. Its time to stop thinking of Social Security as an old folks issue and realize that we are the stewards of this system. This is about YOUR retirement. We can all strive to obtain the same wealth, but the reality is that the majority of us will rely upon Social Security when we retire. Social Security has served retiring Americans for more than 70 years. If we allow it to be pillaged now, what will remain when we turn 65?

I’m not willing to leave this precious program in the hands of a president who has shown little competence in anything but invading other countries (and I mean just the invasion part, not the aftermath).

Paul Krugman’s article is here. It is short, and frames the debate well.

This Washington Post article talks about how how Repubicans are already seeking ways to hide the costs of an overhaul (estimated at $2 Trillion), similar to the way they hid the true costs of the Medicare reform bill.