Your Opinion: Two vital points on Social Security
Sunday, December 4, 2011
In every discussion about Social Security you need remember only two things. First, there will be a Social Security shortfall in 2038 which is some time in the future. Secondly, any remedy to this problem would be minor. All other discussions are about technicalities or are completely bogus.
Don Fleener continues to write letters expressing immediate concern. That concern is misplaced. The system is working just as Ronald Reagan and Alan Greenspan established it in the 1980s to deal with the baby boomer generation.
While Fleener’s arguments are false the sources for these arguments are many. There has been a virtual war by conservatives against “government” programs for decades. The best example is former commerce secretary and hedge fund manager Peter G. Peterson. Peterson has given a billion dollars to establish a think tank dedicated to propaganda against SSA and Medicare. Yes, I said a billion dollars and his ideas are spread through all media.
The intergenerational giveaway idea is a basic and old Peterson argument. Economists like Dean Baker say it does not make any sense. They say that money coming in today is used to pay the immediate draw of SSA recipients. Yes but that is far different than saying SSA is dependent entirely on this transfer. We are talking ab out cash on hand. The surplus is put in the trust fund. We all agree with that. Fleener would be assured if dollars today were all put in the trust fund and the exact monies you and I put in previously were withdrawn for current needs. Why would SSA operate any differently than a bank?
In Fleener’s Nov. 27 letter he says the courts have declared you do not own the money in your fund. That means you cannot just withdraw all your contributions. You can only receive your money as a monthly Social Insurance program. That is a forced savings that keeps the monies for the purposes Social Security was established. That purpose was to provide a modest income for citizens in their old age. Tens of millions of citizens rely on this process.
The problem President Reagan and Greenspan failed to address was the need to continue the payroll deduction after the ceiling reached $106,800. To simply begin increasing the payroll tax each year for incomes above $106,800 would secure SSA for more than 75 years and maybe for all time.