Now, I'm sure that there is a bias to this site and that people on the right are going to yell that I should immediately discredit it for X, Y, Z. Instead of doing that, I'd like to have a discussion about the facts at hand.
Can someone point me to a good resource that shows, with evidence, why we are in a crisis? It seems to be "common knowledge" but I'm not sure that I know the underlying details.
Let's not make this a political finger pointing. I'm not trying to call republicans liars or do any sort of social security fear mongering tactic. I'd just like to see the evidence for both sides of the issue so that I can have an informed opinion.
//edit: I'm not looking for sites like this: http://www.ncpa.org/pi/congress/pd092600b.html These are the same "facts" i've seen many times, but there is no evidence presented to back any of them up. These are statements, not facts.
(edited by Guru Zim on 7.1.05 1404) Willful ignorance of science is not commendable. Refusing to learn the difference between a credible source and a shill is criminally stupid.
Like many topics, perspective is almost everything.
Sure, I'm just a biased mathematician who can pick which numbers I want that prove my point, but in general the actuaries tend to work hard at finding meaningful data to help in the analytical process, so all sorts of questions can be at least discussed in some context.
These are both pretty unbiased sites. FWIW, my personal opinion is that Medicare is going to be a much larger problem than Social Security, at least in terms of the federal budget, future benefits and future taxes.
One extremely huge flaw in the CEPR study is that they are assuming that the goverment has saved every dollar of surplus (i.e. the amount by which SS tax collections exceed SS payments) for the history of SS and will not 'run out of money' until that 'account' (or lock box, to use Al Gore's phrase) is empty. I hate to use scare quotes, but I think that it's pretty obvious to everyone that Congress has not saved one dime of that money and the fund will be in deficit the first day that SS expenditures exceed SS tax collections.
Anyhow, if I looked at the survey in more detail, I could probably give more substantial criticism, but that jumped out at me immediately.
From what I've found, the US Government has borrowed that money from the account, but has to pay it back with interest. To date, the government has not failed to pay back any of the principal or interest. This was from here: http://www.justfacts.com/socialsecurity.htm I have not been able to validate any of this information yet.
I'll read a few of those links later.
I went to the actuary site, but I couldn't find anything that was helping me.
Willful ignorance of science is not commendable. Refusing to learn the difference between a credible source and a shill is criminally stupid.
One of the reasons that I have always advocated Social Security reform has nothing to do with a "crisis", just a philosophical belief that people shouldn't be on the dole just because they reach a certain age, and I shouldn't have to pay payroll taxes to fund it.
To be fair, and I don't have numbers on hand this second, there will be something like two workers for every person on Social Security by the year 2020 or something like that...
Well, just as an attorney, as a human being, I would have thought that if there were recommendations that were so blatantly and flagrantly over the line in terms of torture, that you might have recognized them. I mean, it certainly appears to me that water boarding, with all its descriptions about drowning someone to that kind of a point, would come awfully close to getting over the border, and that you'd be able to at least say today, There were some that were recommended or suggested on that, but I certainly wouldn't have had a part of that, as a human being. - Senator Ted Kennedy, confirmation hearing of Alberto Gonzales, 1/7/2005
From what I've found, the US Government has borrowed that money from the account, but has to pay it back with interest.
Well, they have lent money to the social security administration, so it is debt that has to be paid. My objection is referring to this money as saved money; itís a loan that the government will have to repay at some point in the future. At some point in the next 10-20 years, the social security account will run a deficit rather than a surplus. At that point, the government will have to cut spending someplace else, increase taxes, cut benefits or finance that deficit. So, itís no different than any other government program. The problem is that the arguments about social security tend to fall along one of two main, flawed lines:
1) Social security will run out of money in 2015 (or at whatever date they project social security to run a deficit rather than a surplus). Therefore, we wonít be able to pay all the benefits due to the recipients. This is not true; the government will just have to fund that deficit somehow.
2) Social security has enough money to last until 2046 (or whatever date they project the social security fund to be exhausted), so there is no crisis. This ignores the fact that social security will begin to be a drain on the budget in the next 10-20 years, so it will require some additional government resources because the government has already spent the money saved by social security. Itís not like an individualís retirement account where the money is sitting there available to be withdrawn when needed. The government will have to come up with the funding.
In general, I agree with Grimis in that social security is definitely not a crisis right now. And, the government doesnít have to do anything because it certainly has the means to meet future obligations, if need be, they have the ability to change those obligations. I think the more fundamental issue is what we think social security itself isóis it some type of national retirement fund (as per Bushís plan), is it some type of welfare for the elderly or some combination of the two.
There is a really interesting 10 page article there about social security. Registration is required, but it is free.
That is an interesting article. There is an article (much shorter) in yesterday's WSJ that is pretty interesting as well. The difference is that the NYT article's bias is towards keeping the pay as you go system and the WSJ article's bias is towards allowing individuals to invest a portion of their social security tax payments. Additionally, as pointed out in the NYT piece, the real rate of return on private accounts is around 4.9 percent while the real rate of return on securities is around 3.5 percent (but I'd like to see some type of documentation for those numbers). He presents it like that's no big deal, but it's a huge deal when you consider the amount of money being discussed, the relevant time frame and especially the compounding of interest.
One key difference is that allowing workers to invest part of their social security contributions would increase national savings to the extent that workers save/invest a portion in the stock market. On the other hand, the government issues a bond, then takes the proceeds and spends it.
Moreover, I don't know what they mean by saying that the trust fund received Treasury Bonds. That's a very general statement (sort of like saying I have an insurance policy--that really doesn't tell you anything about the type of insurance policy). And, the longest term T-bond is 30 years. So, I wonder if they redeem the old bond and purchase a new bond upon maturity, or if they simply hold the old bond. If they hold the old bond, then it stops earning interest (obviously). That's a big deal when you talk about 75 years of surpluses.
To reiterate my earlier point--what is the purpose of Social Security? Is it a retirement account? If so, let workers invest a portion of their money. Is it insurance or a social program? If so, have means testing so that people who don't need it don't receive it (that would also help its solvency).
Lastly, another relevant question is do we want to pay adjustment costs up front, in the next couple of years? Or, do we want to wait until 201x or 202x when SS payments exceed SS tax revenue and fund the increasing deficit over a longer time frame?
Would it be wrong of me to be just as suspect of anything coming from the NCPA as you would be if I were posting something from Greenpeace? I'm sorry, but when you advertise a weekly column from Pete (Dammit your name's Pierre!)