One of the GOP's long-standing dreams has been to destroy Social Security -- partly because they want to parcel out its money to their Wall Street buds, but also because it proves their "government is evil and inefficient" thesis to be feces.
Sadly, at least one person who should know better has been spewing GOP talking points on how Social Security in a crisis. However, Social Security is actually doing quite well and will continue to do quite well if we keep the privatizers and disaster-capitalist carpetbaggers away from it. Follow me past the jump to see why -- or just click here.
Here's the deal:
Bush and his Cato/Heritage/Club for Growth privatizing buddies use two wildly different economic forecasts, depending on what they're trying to argue. When they want to diss Social Security, they use the extremely pessimistic (and usually extremely wrong) projections of the SS Trustees, who assume that the US economy will grow at 1.9 percent per year for the next 75 years. By the way: The average growth per year over the last 75 years -- years that include the Great Depression -- was 3.6 percent, almost twice what the trustees project for the next 75 years. In other words, in order for the 2042 "doomsday" number to hold, we'd have to be in a depression for the better part of the next century. Do you really think that will happen? (Well, under Bush, it could.)*
But wait! When the privatizers want to talk up private/personal accounts, they claim huge rates of return of 7 percent or more per year. Those are rates seen only during the height of boom times, such as when the budget-balancing, not-afraid-to-tax-rich-people Bill Clinton was in office -- and they're predicting them for the next seventy-five years.
And they're predicting the Big Boom at the same time they predict the Big Depression.
So which is it, Permanent Boom or Permanent Depression? You can't have both. (Really, you can't have either, but let's humor the privatizers a bit and pretend it's possible.)
If it's a Permanent Boom, the economy grows so much that Social Security is solvent forever. (Actually, so long as we average 2.7% growth per year over the next 75 years, which is below-average growth, Social Security is solvent. In other words, there is no crisis. Period.)
If it's Permanent Depression, then who the hell wants their money in the stock market?
Oh, and this doesn't even take into account that Social Security's overhead costs are less than 1%, whereas any privatized plan, such as those of the UK and Chile, will be nearly twenty times that (the UK's and Chile's plans average around 14% for overhead costs). Even Bush officials admitted that their privatization plan, even with big cuts in benefits, will have overhead costs ten times that of Social Security as it now stands. This is why the UK has been looking longingly at adopting a plan similar to our very own Social Security!
One final note: Social Security is not the same as Medicare, though its enemies never tire of conflating the two.
*
01/02/08 update: In the comments,
Roger Fox points out that
the not-so-trusty Trustees don't count as part of the SS Trust fund the current interest earned by the trust fund money! See how hard they have to fudge the numbers to get the Doomsday projections they want?