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A Suggestion

In case I still have college age readers out there, let me suggest that one very helpful thing students could do regarding the Social Security debate is try and place op-eds in your campus paper making clear that, contrary to widespread belief, there is no "crisis" that will cause the program to go bankrupt or otherwise become unable to pay benefits to members of our generation. Students are normally considered a reliable liberal constituency, but on this issue they are, in fact, the core of the conservative coalition. Any measures that undercut support for Social Security abolition among relatively upscale young people could have a devastating impact on the abolition campaign. Key points:

  • According to the Social Security Administration, current revenues are sufficent to pay full benefits until 2042.
  • According to the Congressional Budget Office, current revenues are sufficient to pay full benefits until 2052.
  • After 2042/52 current revenues will be sufficient to pay around 70 percent of scheduled benefits.
  • Since benefits rise faster than inflation, even these post-2042/52 checks will be larger in real terms than those received by today's retirees.
  • The economic projections used by the SSA are very pessimistic and assume that the US economy will grow far slower in the future than it has in the recent past.
  • Currently, Social Security is running a surplus, unlike the non-Social Security portions of the budget.
  • The Bush privatization plan not only entails a guarantee of benefit cuts as large or larger than the cuts that are merely possible under the status quo, but will saddle our generation with $2 trillion in debt that will stifle economic growth and raise our taxes.
  • Students who believe Social Security will not exist when they retire have been taken in by a years-long disinformation campaign funded by financial services companies that will reap windfall profits in the form of administrative fees that will eat up much of the returns any mandatory savings accounts may earn.
  • The replacement of Social Security with mandatory savings has been tried -- and largely failed -- in countries as diverse as Chile and Sweden, where the government has been repeatedly forced to choose between large injections of new tax dollars and rapidly rising rates of elder poverty.
Happy trails! I know it's not the kind of thing young people tend to care about, but we're the ones who are going to get screwed by this scheme.

December 18, 2004 | Permalink

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Comments

Matt, privatization is going to happen no matter what. Do you think the Bushists give two fucks whether they have support for their scheme? They don't care.

Posted by: grytpype | Dec 18, 2004 5:40:16 PM

This is really sad to watch. Here we are with Iraq II: a massive disinformation campaign meant to gin up a fake crisis and support for a solution that will leave all but a few worse off. The facts aren't even unclear or ambiguous, as with Iraq. It's just an outright scam, playing out right before our very eyes. And our side won't be able to stop it. They're just better at this stuff than we are.

I'm getting pretty fatalistic.

Posted by: Realish | Dec 18, 2004 5:59:31 PM

Great points, Matt. grytpype, of course the Bushies are going to do whatever it is they're going to do, but it's important to establish that they're actions are not a necessary solution to a real crisis, but instead a kind of dumb idea which ignores rather than solves our real problems, driven by their ideological obsessions and neuroses.

Posted by: roublen vesseau | Dec 18, 2004 6:07:37 PM

Matthew, you are terrific!

Posted by: anne | Dec 18, 2004 6:34:07 PM

Way to encourage scholarship!

OK, just being a sarcastic bastard. Good idea.

Posted by: Adam M | Dec 18, 2004 6:45:01 PM

try and place op-eds in your campus paper making clear that, contrary to widespread belief, there is no "crisis" that will cause the program to go bankrupt or otherwise become unable to pay benefits to members of our generation.


Agreed. A further suggestion is that you try and use the following quote from Bill Clinton in your op-ed:

"And all of you know to a greater or lesser degree of specificity, every one of you know that the Social Security system is not sound for the long-term, so that all of these achievements -- the economic achievements, our increasing social coherence and cohesion, our increasing efforts to reduce poverty among our youngest children [of the Clinton era] -- all of them are threatened by the looming fiscal crisis in Social Security." -- President Bill Clinton, February 9, 1998 (emphasis added)

Oh, sorry, that may not actually be the best Bill Clinton quote for the point you are trying to make, is it?

Posted by: Al | Dec 18, 2004 6:47:28 PM

Does anyone believe the Republicans in Congress will kill Social Security, knowing they have to face the voters in two years? They will only if we don't keep up the pressure by making sure everyone knows there isn't a crisis in Social Security, other than the election of Bush. write letters to the editor regularly to help get this message across.

Posted by: Vaughn Hopkins | Dec 18, 2004 6:49:04 PM

Does anyone believe the Republicans in Congress will kill Social Security, knowing they have to face the voters in two years? They will only if we don't keep up the pressure by making sure everyone knows there isn't a crisis in Social Security, other than the election of Bush. write letters to the editor regularly to help get this message across.

Posted by: Vaughn Hopkins | Dec 18, 2004 6:50:03 PM

I'd add one more key bullet point.

If the Bush plan goes through, your Grandma will be forced to move in with you. And then you'll never get laid.

Posted by: praktike | Dec 18, 2004 6:50:47 PM

See, Al, if Clinton said something different, we don't care, because we don't worship the people elected to office under the Democratic party, so it doesn't catch us in a bind that might make our little heads explode -- unlike the followers of the current President Jesus and/or that earlier guy in the 1980s, Ron the Baptist...or should it have been Barry the Baptist, Ron Jesus, and St. G.W. Paul? Ah, analogies.

Posted by: DonBoy | Dec 18, 2004 7:15:32 PM

Much like butter, Matt, you're on a roll today.

Posted by: Petey | Dec 18, 2004 7:19:06 PM

"This is really sad to watch. Here we are with Iraq II: a massive disinformation campaign meant to gin up a fake crisis and support for a solution that will leave all but a few worse off. The facts aren't even unclear or ambiguous, as with Iraq. It's just an outright scam, playing out right before our very eyes. And our side won't be able to stop it. They're just better at this stuff than we are."

Learn what to be fatalistic about, and what not to be.

The Iraq War was a done deal a year ahead of actual hostilities.

Social Security has a strong potential to end up as a quagmire for the Republicans.

Posted by: Petey | Dec 18, 2004 7:24:46 PM

Al makes an excellent point. Both George Bush and Bill Clinton also said Iraq had WMD. Thus, we know Iraq did. The claims of politicians are the ultimate arbiter of fact. There is no need to bring reality into it.

Unless... unless both parties saying something doesn't make it true! Unless both parties are capable of being deceptive!

Thank goodness, we know that's not true. Whew. Thanks, Al!

Posted by: A Tiny | Dec 18, 2004 7:40:36 PM

Courtesy of a blog I contribute to, Amendment Nine...

Ah, mid-winter... The big inaugural prelude. The goal now is to make it look like Bush's second term was a mandate for social security reform. When someone asks you what you think about the president's plan, here are few ways to re-center the debate:

(10) Yep, I guess Bush has to get it up above 11,000 somehow.

(9) Why, no, I didn't... did they lower the terror alert too?

(8) I guess it don't matter who steals our retirement cause if the dollar keeps sliding, its gonna be worthless anyhow.

(7) Let me ask you something, you think Sgt. Irizarry, you know, that father of four from the Bronx who died a couple of weeks ago... you think he went over there to fight in the desert so George W. Bush could make Wall Street rich off your grandma's retirement money?

(6) No, I didn't hear that, I was too busy figuring out how to afford medical insurance.

(5) If you believe there is a social security crisis, then I got a bridge in Baghdad to sell you.

(4) Yeah, I heard about that. I bet my broker is licking his chops.

(3) Jesus Christ.... Hasn't Ken Lay stolen enough?

(2) I did. I still haven't heard: "Bin Laden Captured" though. Have you?

(1) Well how else they gonna pay for Christmas son?

Posted by: Federalist X | Dec 18, 2004 7:52:04 PM

This is a time for demagoguery, which is what the taxidermists' delights on Meet the Press call truth.
Message: They want to steal your money.
After that, you need an alternative?

Posted by: Michael Gee | Dec 18, 2004 8:16:54 PM

Al -

Wait a sec. I thought Clinton was a LIAR. Republicans can't believe anything said by someone who's a LIAR. So why do you believe Bush when he parrots one of Clinton's endless lies?

The baby Jesus cries because of you.

Posted by: Alnonymous | Dec 18, 2004 8:20:04 PM

No need to listen to Clinton. Here's Paul Krugman, writing in the New York Times in 1996:
"Where is the crisis? Just over the horizon, that’s where … In 2010 … the boomers will begin to retire. Every year thereafter, for the next quarter-century, several million 65-year-olds will leave the rolls of taxpayers and begin claiming their benefits. The budgetary effects of this demographic tidal wave are straightforward to compute, but so huge as almost to defy comprehension."

Posted by: Frank Wilson | Dec 18, 2004 8:45:59 PM

Al--I take the fact that you've repeated this lame talking ponint (which is, alas, woefully ineffictive, since unlike you I'm not a hack) can be taken as conclusive evidence that you have no rebuttal to any of Matt's substantive points. No surprise there!

Posted by: Scott Lemieux | Dec 18, 2004 10:03:16 PM

Or we could just brainwash the kids, by having an Eric Cartman-like figure yell repeatedly at them "You will respect mah Social Securiteh!"

Posted by: roublen vesseau | Dec 18, 2004 10:16:47 PM

::yawn:: Whipping up fears over Social Security has been one of those annoying, lazy, and basically dishonest political tactics that my very own Democratic Party has been using for far too long. Molly Ivins was griping about it over a decade ago, as a matter of fact, because she considered it unconscionable. Not to say, mind you, that the old GOP cry-wolf favorites ("minorities are going to ruin your neighborhoods & make you lose your jobs!", etc.) are any better, but let's face it, their audience doesn't really ask for much in the way of depth or variety.

So I'm afraid that the Dems do have a problem, because it's too easy to convert the old talking-point complaint (which was mostly about the rest of the government resting easy on the SS surplus, anyway) into a GOP advantage. This can be stopped, though, but the question is whether anyone on our side will try.

Posted by: latts | Dec 18, 2004 11:32:00 PM

""Where is the crisis? Just over the horizon, that’s where … In 2010 … the boomers will begin to retire. Every year thereafter, for the next quarter-century, several million 65-year-olds will leave the rolls of taxpayers and begin claiming their benefits. The budgetary effects of this demographic tidal wave are straightforward to compute, but so huge as almost to defy comprehension.""

Yes, but of the projected 72+ trillion dollar shortfall for boomer entitlements, social security benefits account for less than ten trillion, a sizeable sum no doubt but a burden that is manageable through means testing, modest tax increases (or spending cuts elsewhere), and raising the retirement age by seveal years.

The real bitch is still medicare and medicaid, and let's face it no one has the slightest idea what to do about that.

Posted by: Green Dem | Dec 19, 2004 12:07:35 AM

This is too much like Iraq -- Saddam Hussein without effective sanctions and with oil revenue was a threat to a region. Bush and co. took a real but manageable medium to long term threat and turned it into something that had to be taken care of immediately. Result -- a short-term nightmare leading most likely to a longer-term nightmare. Don't know if this is going to help the debate much, though.

Posted by: Buck | Dec 19, 2004 8:29:03 AM

It is interesting to see that 'liberals' have been sounding the alarm about the diversion of the Trust Funds for quite a while. We have seen a complete inversion, with the 'liberals' now being the party demanding fiscal prudence and the maintenance of constitutional law. In any world other than George Orwell's 1984, today's 'liberal' would actually be called a conservative.

So we should really be thanking Al for reminding us that this 'crisis' is not a sudden development, but actually the result of decades of out-of-control spending by Republicans.

Posted by: serial catowner | Dec 19, 2004 8:52:06 AM

Yes, but of the projected 72+ trillion dollar shortfall for boomer entitlements, social security benefits account for less than ten trillion, a sizeable sum no doubt but a burden that is manageable through means testing, modest tax increases (or spending cuts elsewhere), and raising the retirement age by seveal years.

And Democratic calls for such modest measures, are, where?

For the record I'd prefer the straightforward approach you indicate here, but I don't see the political calculus coming together.

The 25% benefits cut in the offing from Bush is a similar, moderate measure. And, yes, I use the word "moderate" on purpose. It's not radical, like the wholesale privatization in Chile that the CATO folks would prefer. Matt's college friends will still get 75% of what they will under the status quo's projections. They will have to deal with somewhat higher deficits for a couple of decades, but even this is not set in stone. If productivity projections are genuinely pessimistic, as is alleged, the economy will generate more tax revenue than under even the ravaged post-Bush tax code. Moreover, it's not impossible that some savings could be effected via spending cuts.

And, unmentioned by Matt's rosy predictions is the almost certitude that increases in job-destroying, wage-reducing payroll taxes are coming to college students' near future under the current plans. This is because, contrary to our host's asertions, Social Security's revenues are not sufficient to pay benefits until 2042. It is true that intergovernmental IOUs exist, and that these intergovernmental IOUs supposedly will not be exausted untl 2042. But this simply means the growing diversion of general revenue required to pay Social Security's costs will be "claimed" via these IOUs. Indeed, there's nothing substantive about them. In fact the only real difference between 2041 (the last year there are intergovernmenatal IOUs remaining for Social Security) and 2042 (when they're exausted) is that in 2041, the 25% of the cost of Social Security paid by general revenue will be explicitly claimed by these otherwise worthless bits of paper, and in the 2042 this 25% will be diverted due to the political infeasibility of letting old folks starve.

This ever-larger (after 2018) diversion of general revenue means ever-larger canibalization of the rest of the budget, which means, if the past is any guide, irresistable pressure for increases in payroll taxes.

By contrast Bush's plan, by giving people the option for private accounts, "locks in" a moderate, prudent, cost-curbing approach whose temporary extra costs sensibly and fairly rely on income taxes.

Posted by: P.B. Almeida | Dec 19, 2004 9:36:50 AM

PB Almeida:

The 25% benefits cut in the offing from Bush is a similar, moderate measure.

Where are you getting this number from? There is no Bush plan as of now. However, the most likely plan proposed by his commission called for cuts in guaranteed benefits close to 40% for people not yet in the work force.

This ever-larger (after 2018) diversion of general revenue means ever-larger canibalization of the rest of the budget, which means, if the past is any guide, irresistable pressure for increases in payroll taxes.

There's never been a trust fund this size in the past, so the past is not any guide.

However, I agree there will be pressure to raise payroll taxes -- not from Americans generally, of course, but from Americans with the highest incomes. The choice is between paying the shortfall out of income tax revenue (of which about 80% is paid by the highest quintile and 50% by the top 5%) and sticking lower income Americans with the bill, via higher payroll taxes High income Americans would far prefer to raise taxes on lower income Americans.

That's why there's the PR offensive saying the trust fund is "meaningless IOUs." The hope is it will lay the groundwork for some type of default by the highest income Americans.

In sheer volume, this would probably be the greatest financial scam in world history. But that certainly doesn't mean the Republican party (and certain lovely Democrats) won't give it a shot.

Posted by: A Tiny | Dec 19, 2004 4:26:58 PM

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