The Bushies are spreading alarmist doom and gloom scenarious about Social Secuity that are completely false. There is a good article on this in today's Los Angeles Times. In essence, the author of
Stop Sweating Social Security--the End Is Not Near shows that the solvency date has been continually pushed further and further into the future and is probably the end of the 21st Century.
Here is the link to the article (free subscription)
The current insolvency date is now 2042, assuming a 1.8% rate of economic growth in our economy and no immigration. When the current economic numbers are projected into the future, Social Security will remain solvent until the end of this 21st Century.
Here is a quote from the article:
Ten years ago Social Security trustees predicted that the system would become insolvent in 35 years, meaning 2029. Five years later they were still predicting that insolvency was 35 years away -- doomsday had been postponed to 2034. Today, they're predicting that insolvency is 38 years away, in 2042.
The answer is all in the numbers. For instance, the future of Social Security is highly sensitive to predictions of economic growth, and the trustees assume a very conservative growth rate of 1.8% per year. That compares with expected growth of 3.9% this year, a fairly average year for the U.S. economy.
Another example: Because young people are the ones who support the system, Social Security projections are also sensitive to immigration rates. Immigrants tend to be young, so the more immigrants, the stronger the system. But despite the fact that immigration to the U.S. has been steadily increasing for more than half a century, the trustees assume not just that it will stop growing -- itself a conservative estimate -- but that it will actually decline.
What this means is that every few years, as reality outpaces the previous year's predictions, the trustees move the insolvency date forward. What's more, there's every reason to think they're still making the same mistake.
Robert Gordon, a respected economist at Northwestern University, recently took a fresh look at long-term economic trends. His conclusion? The trustees are continuing to be far more pessimistic than the evidence warrants. His projections, based on recent increases in national productivity as well as more reasonable estimates of immigration, show an economic growth rate for the next two decades that's nearly a percentage point per year higher than the trustees' projections.
If you plug Gordon's more realistic numbers into the model that the trustees use to project the health of Social Security, it turns out that the program is solvent for the rest of the century. In other words, Social Security needs no changes at all. Everyone alive today, young and old, will be covered in full when they retire. Surprised?
Another scare tactic by the Bushies to get drive their agenda