Panic! Lose your minds! And above all .... Privatize! Privatize! Privatize! Because the entire Social Security system is about to crash and go belly up!
Except that it’s not.
Here’s our expert, Nancy Altman, in her sensational debunking book from 2005, The Battle for Social Security: From FDR's Vision To Bush's Gamble, discussing the 1980 panic over the future of the program and the use of the “bankruptcy” scare, the same zombie scare that's rearing its head again today:
Bankruptcy is a meaningless concept when applied to the federal government as a whole or any of its programs. As long as the federal government has, under the Constitution, “Power To Lay and collect Taxes” and the authority to issue and sell Treasury bonds, it and its programs will not go bankrupt. It is instructive to note that the reference to potential bankruptcy would be impossible to claim if Congress simply reinstated the authorization, present in the law from 1943 to 1950, to pay any shortfall in Social Security out of general revenue.
Out of all federal programs, Social Security was being singled out for alarmist claims about bankruptcy because it operated under the conservative principles of a balanced budget and long-range projections. No one ever pointed out that if deficit spending were the definition of bankruptcy in a federal program, then the entire federal government―other than Social Security―had been bankrupt for 20 years. During the prior two decades [to 1980], the government had run deficits every year with the exception of 1969.
Ask yourself this: Why this one program? Why, decade after decade, have conservatives fanned the flame of paranoia about this specific program when every other federal program, and the government itself, operates at a deficit? Why is the healthiest program on the privatization block? Who wins and who loses if wealth is transferred from this public insurance program into private hands?
It would be irresponsible not to speculate, wouldn’t it?
As you mull over that mutil-billion dollar question, just keep in mind the simple phrase: Social Security cannot go “bankrupt.”
This has been the third in a series of attempts to slay Zombie Social Security lies with the help of Altman’s book. Altman was Alan Greenspan’s assistant in 1983 when he chaired the panel on fine tuning the program, and her book has helped debunk two other zombie lies in the past couple of weeks: increased life span is dooming the program, and decreased worker-to-beneficiary ratio is killing the program.
Another great resource for any and all information about the health of Social Security can be found at Angry Bear, where Bruce Webb’s series has become a go-to resource on the attempts--and the zombie lies--to scare the bejesus out of Americans and get them to turn their wonderful safety net program over to private profiteers. (We’ve also been lucky enough to have Webb posting here and sharing his expertise.)