Don’t Believe Wall Street Hype About Social Security

[Better Believe It]

by Mike Hall, Mar 28, 2008
AFL-CIO Now Blog

Lets take a step back from the mainstream media headlines about “Bleak Outlooks” and “Grim Reports” and look a little more closely at where Social Security actually is and where it will be down the road.

Robert Greenstein, executive director of the Center on Budget and Policy Priorities (CBPP), and CBPP chief economist Chad Stone analyzed the Social Security trustees’ report and say that while there will be some challenges down the road, we are far from crisis mode. Instead, it’s more likely the real 800-pound gorilla in the nation’s financial future is the Bush administration’s tax cuts, aimed mostly at the rich. Greenstein and Stone write:

The program will be able to pay 78 percent of full benefits when the trust fund is exhausted in 2041 (compared with 75 percent under last year’s projections). At the end of the 75-year projection window in 2082, Social Security will still be able to pay 75 percent of full benefits.

Anyone concerned about Social Security’s long-term shortfall ought to be equally (if not more) concerned about the long-term fiscal impact of extending the 2001 and 2003 tax cuts. Making the tax cuts permanent will cost more than three times as much, over the next 75 years, as the 75-year shortfall in Social Security.

Greenstein and Stone point out that just by ending the Bush tax giveaway to the top 1 percent of Americans—those making more than $450,000 a year—the government could make up nearly the entire cost of the projected Social Security 75-year-shortfall. The say the additional revenue coupled with other modest changes cold restore Social Security solvency.




Please read the entire article at:
http://blog.aflcio.org/2008/03/28/dont-believe-wall-street-hype-about-social-security/

[Cassandra]

1. The trust fund is SUPPOSED to run out...

when the baby boomers do. It was designed that way. Then the program returns to the generational shift in money that it was before.

[FreakinDJ]

5. Its too easy to fix

raise the cap to 150K and there is no shortage

[speedoo]

2. K&R, and bookmarked.

Thanks for posting. Medicare is the more immediate problem.

[glowing]

9. And medicare would be fixed if all people in US were contributing to the system.

It takes healthy people paying into the fund to cover those that will carry the most costs... I use maybe 2-300 a year in medical costs. I pay the ins. co a lot more than that for coverage. We need healthy people contributing to the pile, instead of poor and old (who tend to cost more) just pulling out from it.. Its the easiest and most simplest solution to cover every American with healthcare. A few of the bugs and systems need to be worked out, but in general, its there.. more healthy bodies need to help contribute to the system.. shoot I already pay into the system.. instead of paying medicare and private insurance.. I'd just up the amt of medicare and pay one place and never be denied for access to any healthcare. Its a win-win.. Anyone who doesn't understand this concept or holds up a candidate who wants to keep the status quo in regards to healthcare, can be assured that that candidate is receiving big bucks to kill Americans.. I wish to God we can bring law suits or murder charges against our politicians for not upholding our right to life...

[Hotler]

3. Thanks for sharing this and...

welcome to DU.

[mac2]

4. You have to be careful when making a tax limit on SS

because many older folks have huge amounts of savings, stocks, etc. They need it to live on the rest of their lives. They don't get a cost of living increase which would help them.

I agree the few top elite should pay more SS and taxes. We now have a new aristocracy in America. The division of rich and poor very extreme.

When women pay $4,000 for a purse and all too many Americans have 10,000 sq.ft.houses something is just not right. That's not what America is about.

[nichomachus]

12. And bigger

A guy a few miles from me had to bribe/threaten city officials to let him build a 44,000 square foot vacation home.

Another guy has a 250-acre estate (vacation home), with an 18-hole golf course and a permanent staff of 120 people.

[still_one]

6. what we should be concerned about is their push to privitize it

After all the deregulation from the eighties and ninties, we are paying for the consequences of that with the collapse of the financial industry

More than ever people should keep Social Security and Medicare away from prvitization

bush and company have been chomping at the bit to get a hold of that money and throw it into the stock market, and they know they don't have much time

Just look at everything they have touched what happened to it

[SharonAnn]

10. "Privatization" is just a ruse to transfer taxpayer money to Wall Street to "manage" and

get fees for "managing" it.

In Chile, privatization has not worked out so well. Of those workers who could save up to 10% of their wages (obviously not the low-income families), they found that bank "fees" have eaten from 25% to 50% of their money. And, the stocks they were invested in haven't necessarily done well, either.

But the banks made lots of money of this and companies made lots of money selling their stock for pension holdings.

Just another scam to set the pipeline with taxpayer money pumping into the pockets of the wealthy and well-connected.

[Orsino]

7. They're using their own coruption and incompetence...

...to sell you the financial equivalent of managed health care. "We have stolen your financial security. Are you worried? Better trust us to handle your financial security."

[pinto]

8. Good find. Thanks for the post. n/t

[Omaha Steve]

11. K&R

Thanks for an AFL-CIO post!

[Kurovski]

13. K&R.

We're always fed nonsense about social security. The right wing just wants to get rid of it.

[slipslidingaway]

14. Thanks and welcome to DU. n/t

[Hannah Bell]

15. The tax cut thing is true. But the idea that there's anything at all

that needs "fixing" is not.

The SS Trustees' projections are cooked.

The real numbers have come in better than even the "optimistic" projections 8/10 of the last 10 years.

The "optimistic" projection (you never hear about that one in the media) shows SS paying its scheduled benefits into infinity, & a never-ending surplus in the Trust Fund.

The trap on raising the cap above the 90% of national income it was designed to cover is that you turn it into "welfare," with the rich paying in disproportionate to what they get back.

Political vulnerability.

SS is self-funded workers' retirement insurance. It's the most financially sound gov't program there is. There's no problem.

[Better Believe It]

16. Any More Opinions On This?

Kick

[Hidden Stillness]

17. There IS No Problem With Social Security

Social Security has never had anything but a surplus, which is why Republican Presidents from Nixon to Reagan to both Bushs have raided the fund to try to make their disastrous deficits seem smaller. There is no problem with the trust fund, and any future projected shortfalls of any kind, are easily solved with unnoticeable tax increases to the higher levels of payroll tax, increasing the yearly income-level that can be covered by the Social Security pay-into law. A few minor adjustments that no one will even notice will again correct the problem, which as always, is overstated by those who want to kill it. Social Security has been re-adjusted many times over the years; this is not even new or different. Anyone who wants to learn about this, should read the book "The Battle for Social Security--From FDR's Vision to Bush's Gamble" by Nancy J. Altman; she explains it very well, clearly, and has the solutions.

The deficit appeared July of 2001, after Bush and the Republicans enacted two huge tax cuts for very wealthy people; it had nothing to do with Sept. 11th, Medicare, or anything else. Later, they cut rich people's taxes again, and tried over and over to kill the estate tax for even wealtheir rich people. This has caused the crisis. The more the stock market explodes and implodes and collapses by the weight of its own deregulated corruption, destroying the lives of all but the wealthiest predatory investors, and Social Security goes safely on and on, the clearer it becomes that a guaranteed Government program is the only safe thing.