This is my first diary. It's kind of long, but it only scratches the surface of what I have to say regarding Social Security. Feedback is greatly appreciated.
After the baby boomers retire, what will be the ratio of retirees to workers? Will SS go back into surplus? If we consider the age of baby boomers from 1945 to 1960, the youngest of those boomers will be 82 years old. It would follow that, at some point, the worker-to-retiree ratio will rise and the system will again reach a balance, especially if, at a current ratio of 3.3 to 1 we are establishing large surpluses. What is the estimated worker to retiree ratio in 2042? What about 2060, when the baby boomers are dead?
When SS taxes were raised in 1983 to establish the trust fund, the purpose was that we boomers were putting this money in to pay for the coming demographic bulge. This being the case, it would make sense for the trust fund to be depleted when the crisis has passed.
Now we are told that the trust fund is full of worthless IOUs. In other words, the tax increase of 1983 amounted to an income tax increase foisted largely on the backs of the least wealthy, given the wage caps on contributions. If the trust fund had been off limits from day one, wouldn't the government have had to borrow the money elsewhere and have to redeem the outstanding bonds to other buyers? The fact that the general fund borrowed the money from SS is not a Social Security problem, it is a budgetary problem. We need to increase revenue to the General Fund, not the Trust fund.
Much has been said about how raising the income cap would do little to relieve the pressure on SS. But no one has estimated what the benefit would be. How high would the income cap have to go in order for it to become a significant part of the solution? What would be the difference if the cap were raised to $100,000, $150,000, $200,000? What if the cap was repealed?
Currently, payments for disability and survivor benefits amount to approximately one-third of SS expenditures. How will the implementation of private accounts impact the funding relative to disability payments and survivor benefits? There has been a lot of talk about possible benefit cuts, would those cuts be extended to disability and survivor's benefits?
Many opponents of President Bush's plan have said that the SSA and CBO use pessimistic assumptions about growth. What are the assumptions, and why are they criticized as being overly pessimistic? The SSA estimates 2018 as the year the trust fund will stop growing, and in 2042 the fund will be exhausted; the CBO estimates 2020 and 2052 respectively. Why have we completely disregarded the difference between the SSA and CBO estimates and what are the assumptions behind the differences?
Why is the administration focusing on SS when it is widely known that Medicare and Medicaid will become insolvent far faster? How will the debt assumed by the introduction of private accounts affect the possible solutions to the funding problems faced by these programs?
Given the daunting challenges faced by our nation, it is imperative that we face our most immediate challenges first. In this way, we will be able to more effectively gauge the solutions available to us.
These are a few questions that would greatly enhance the public discourse if they were addressed. IMHO the first question is very intriguing and could shed some light on the prospects for future solvency. Regarding the income cap, wouldn't hard, actuarial estimates of the benefits of raising or repealing the cap help to frame the argument instead of the general "it won't do enough answer? The same goes for the questions regarding survivor and disability payments and the CBO/SSA questions.
The last question is common sense. I believe that each time Republicans cry SS reform, we should bring up Medicare and Medicaid. There must be a way to educate the public regarding the immediacy of the problem. If we can get the public aware of it, maybe, just maybe, it might be brought up by the "liberal" press.