A few secure words

Okay, look. At this point we all know - or at least should know - that there is no "crisis" in Social Security. The fears of 20-somethings that "Social Security won't be there when I retire" are the result of deliberate misinformation - I love that expression, such a polite euphemism for "lies" - spread by people who hate the program, always have, precisely because it's not in crisis. In other words, because it works.

Doug Orr has an excellent article on Social Security and the vapidness of the claims about it in the November/December issue of the valuable magazine Dollars & Sense. It will take nothing away from your reading of the entire article if I toss out a few quick hits from it.

- Social Security was a pay-as-you-go system until the 1980s, when it was decided to raise payroll taxes to create a surplus in the trust fund to supplement tax revenues when the so-called "baby boomers" retire.

- Currently, the system's trustees estimate the fund will have a zero balance in 2042. But contrary to the claims, the system at that point will not be "bankrupt." It will merely no longer have a surplus and will be back to the pay-as-you-go status that it has had for most of its life. Even at that point, as John Miller points out in the same issue, it will still be able to fund 70% of projected benefits out of current revenues. Remember, that is with no changes to the system.

- Interestingly, in 1996, the trustees projected the trust fund balance would zero out in 2030, 34 years in the future. In 2000, it was 2036, or 36 years in the future. Now, they say the zero balance will come in 2042 - 38 years in the future. The date keeps getting pushed further into the future because the trustees use unrealistically pessimistic assumptions about economic growth and productivity improvement. For example, they assume GDP will grow at an average rate of 1.8% per year for the next 75 years. "In no 20-year period, even including the Great Depression, has the U.S. economy grown that slowly," Orr says.

- Which means that the 2042 date is suspect as well. Miller notes that the Congressional Budget Office, using less pessimistic but still conservative estimates, puts the zero balance date at 2052. Again, that's with no changes.

- If the economy grows at an average of 2.4% per year — a reasonably healthy but by no means heated level - the trust fund never goes to zero.

- Even assuming the trustees' gloomy predictions are right, Miller notes several small, simple changes that would close the shortfall. Orr says that a 2% increase in payroll tax beginning in 2030 would also do the trick.

- The "demographic timebomb" is also bogus. That's the argument that says that in 1960, the United States had 5.1 workers per retiree, while in 1998 we had 3.4, and by 2030 we will have only 2.1 workers per retiree, and we just won't be able to afford supporting retirees under the current system. But as Orr notes, "all current consumption must come from current physical output." That is, everything non-workers consume is produced by workers. So the issue isn't how many workers per retiree there are, but how many workers per non-worker there are. In the 1960s, there were 1.05 workers per non-worker; by 2030, there will be 1.27. So by the opponents' own logic, we will be better able to support Social Security in the future than we are now! The only thing that will change is the portion of the support going to the aged as compared to that going to the young.

So the claims of crisis are flatly false. And, in fact, nothing new: Orr says that the first prediction of a Social Security crisis came in 1936! (And more recently as well: FAIR, had an article entitled "The Myth of Social Security's Imminent Collapse" in its magazine Extra! in the summer of 1995.) They are made by people who oppose Social Security, again, precisely because it works. And the idea of a government program, especially a massive, income-redistribution program such as Social Security is, working is a heresy that must be crushed because it flies in the face of every article of faith they intone to justify their own selfishness.

Orr goes on to present a persuasive argument that what's really involved in the current calls to "reform" Social Security is to use cutting benefits as a means to pay for Bush's tax cuts for the rich permanent. I'll leave it to you to read that part, because I want to make a different point.

What the hell is this reform crap we keep hearing about? Everything is about "fixing" Social Security, about "reforming" Social Security.

re·form, v. - tr. 1. To improve by alteration, correction of error, or removal of defects; put into a better form or condition. 2.a. To abolish abuse or malpractice in. b. To put an end to (a wrong). 3. To cause (a person) to give up harmful or immoral practices; persuade to adopt a better way of life. - intr. 1. To change for the better.

re·form, n. 1. A change for the better; an improvement. 2. Correction of evils, abuses, or errors. 3. Action to improve social or economic conditions without radical or revolutionary change.

There is no "reform" in the proposals being touted by the Bush gang. There is no improvement, no correction of error, no removal of defects, no change for the better. The very word "reform" in this context is a flaming lie. They don't want to put the system in a better form or condition, they want to destroy it. Undermine it. Eliminate it. Axe it. But they can't say that directly, so they present themselves as the champions, the protectors, of Social Security, they flatter us with their concern for our futures and for our "freedom" to use "our money" as we wish - but the fact is they are still the spiders and we are still the flies. And they do not have our best interests at heart.