Wednesday, February 16, 2011

Catch of the Day

Kevin Drum explains Social Security to those who, somewhat bizarrely, are convinced that it won't be around when they retire. His catch is of a comment by the Economist's Erica Grieder, but I agree that it's a very widespread believe people have. Via The Polling Report, CNN polling last summer found a majority of 60% who do not expect Social Security to "be able to pay a benefit when you retire," and other polling going back to the Clinton administration found slim majorities or pluralities who believed some variation of that, although not surprisingly the answer seems to depend on the wording of the question.

Note too that Grieder calls Social Security a "pyramid scheme," which is also common usage and also totally wrong. Social Security, of course, has survived just fine for about 75 years, and according to projections will, as Drum points out, do just fine for the next 75 years. Yes, there's a projected gap between income and outflow, but it's not all that large in the grand scheme of things, and more to the point the projected gap is as Drum explain stable, not spiraling upwards (as, say, Medicare is scheduled to do). There are, of course, no pyramid schemes that survive for 75 years and then project to be stable for the next 75.

I'll note that I don't know whether people hold similarly pessimistic opinions about other things that might be similar, or perhaps if there's something in the question wording that elicits that kind of answer, but that wouldn't really account for Grieder's post.

Anyway: nice catch! And a very useful post.


  1. I have to admit that I thought Social Security wouldn't be around for me when I was coming out of High School in the mid-90's. My mother would casually talk about how even she might not get SS benefits for much of my remembered growin' up. I would hazard a guess that I'm a common occurance, and that my renewed interest in politics and then economics in my 20's was my only salvation from continuing skepticism.

    I think it's not so much a specific judgement of the facts (or even close to that), but much more a general skepticism about how "govt over spends, and it's always breaking" combined with a sense that it's unwise to plan your retirement around a politically contentious gov't retirement scheme. (so just expect it to be gone when you retire, and if it's still there, bonus!)

  2. Perhaps there are multiple reasons that a person would believe that SS "will not be around".

    "I believe Republicans will succeed in destroying this useful program" would be valid fear for a person to have, and cause them to be grouped with the people that believe SS is unsustainable.

    We witnessed a similar dynamic with the people that did not support ACA because it didn't go far enough...

  3. I think the impending disappearance of Social Security myth has been very strong in this country since Carter's administration. I grew up in a Reagan-worshiping family, and even when Reagan strengthened Social Security to deal with the Boomers (something that would get him excommunicated as a Communist-Nazi-Socialist-Kenyan-Muslim today), the myth persisted.

    There is a large contingent of conservatives in this country who want SocSec to die, and they actively try (and succeed!) to undermine people's confidence in the program. When people are convinced that the program will never make it to their retirement party, they're more open to reforms. Then you can start proposing things that would eventually kill SocSec, like privatization, while claiming to be the defender of the safety net while your opponent refuses to admit there's a problem (even if it is a very slight problem sixteen years away).


Note: Only a member of this blog may post a comment.

Who links to my website?