Seth Masket has a nice post up today knocking Mark Halperin for promoting inane Beltway fantasies of bipartisanship. Good catch! The part I'm most interested in, however, is that Seth hits Halperin for accusing the Democrats of "using Social Security scare tactics," which is somehow dirty pool even though some GOP candidates are explicitly running against traditional Social Security (not to mention that the only time the GOP had unified control of government for more than two years since Hoover they attempted to end traditional Social Security, so it's not as if it's completely unprecedented for them to attempt to act on that rhetoric). I've commented on this before: Republicans act as if it's some sort of ultimate slur to accuse them of wanting to cut Social Security, even thought they claim that they want to cut Social Security. And, for whatever reason, a lot of reporters buy the spin.
To be a bit more evenhanded about it, I think there's another side to this: if Republicans come too close to actually saying that they are against Social Security, they are written off by the press as freaks and weirdos. You're allowed (almost required!) to say that Social Security cannot be sustained in the long run (even though that's not really true), and that Something Must Be Done, and that All Parties Must Come Together to implement a solution, and that Everything Should Be On The Table, and even that Democrats Are Refusing to Consider Necessary Adjustments...but if you actually say that you are for cutting Social Security, and certainly if you don't say you support it, you're a kook. So there's some sort of rough, if incredibly foolish, justice. In a way. Sort of. Still, I'd love to hear a justification for why it's unfair for Democrats to accuse Republicans of wanting to cut Social Security.
(I think there might be a similar dynamic the other way around with defense spending, although I'm not sure whether it's close enough to really count. Anyone have thoughts on that?)
Do you have any good links on it being not really true that Social Security needs changes to survive (absent taking tons of money out of the general fund)?
ReplyDeleteThe simple story I've always heard is that demographics make the long-range future bleak, simply because the model was based on population growth and shorter post-retirement lifespans.
nvm, I found Krugman's piece.
ReplyDeleteCan't say I'm fully convinced by him, because he's essentially saying "don't believe their assertions; they're biased!" while conveniently saying "believe my assertion; I'm biased in favor of it!"
For more, go to CBPP's debunking of SS myths:
ReplyDeletehttp://www.cbpp.org/cms/index.cfm?fa=view&id=3261
Basically, it's fine for the next ~30 years. After that, predicted revenues cover 75% of predicted payments. That's an issue, but not really "needs changes to survive," IMO.
I was reminded of Krugman by this as well; but haven't found this particular piece (blog post I think), where he says roughly the same thing - "I'll stop accusing Republicans of wanting to dismantle social security when they stop wanting to dismantle social security."
ReplyDeleteActually, even at 75% of scheduled benefits in 2030-2040, it isn't that big of a deal.
ReplyDeleteInitial Social Security benefits are indexed to Wage Growth. After you're entitled, benefits are indexed to inflation. As a result, new retirees see real benefit growth vs. priorgeneration. Any plausible predictions for our economy would see compounded real benefit growth over the course of the next 35 years, greatly minimizing the impact of a 25% cut.
The fact that this seems counter-intuitive just goes to show how poorly most liberal media-types have done on this issue. Even generally reasonable, reliably left types like Chait and Ezra seem to think that raising the full retirement age to 70 is a good idea.
Which isn't to say that something shouldn't be done. Consumption patterns change and the cost of the basket of goods that seniors buy tends to outpace inflation.
As to the post, this all has the ring of the mid-90's Medicare debates with the refrain of, "We're not cutting Medicare, we're just slowing the rate at which it grows!"
So, going off of CBPP's numbers (and some back of the envelope math):
ReplyDeleteMaking SS fully funded through 2085 would cost about 6.75 trillion in current dollars. (using their 0.7% of GDP and the 2007 estimate of GDP, and summing it up over 75 years) If we started paying that now, about 90 billion a year, or about 1/8 of the defense budget or 1/5 the budget for the social safety net (excluding SS & medicare). If we only took care of the problem once they shit hit the fan, that'd be about 135B per year.
To me, a person who values SS, these seem like reasonable and affordable costs. But, you have to admit that is a lot of money, and getting that through Congress seems tough. Demographics aren't going to kill Social Security, but it ain't going to be pretty politics.
Matt,
ReplyDeleteOr maybe the population will get a lot younger (through immigration, presumably) and the problem goes away. Or maybe life expectancy shoots up over the next thirty years, and the whole concept of retirement changes radically. I mean, one does want to be prudent and all, but predictions about 2040 are pretty dicey, and predictions about 2085 seem to me to be just a step about a ouija board. Yglesias had a very nice post about this a couple weeks back, and I had a fun follow-up, but neither of them seemed to make much of a splash.