Thursday, March 24, 2005

Bush Again Dishes Fear About Social Security

Misleading, fear-stoking numbers were issued yesterday about Social Security by Trustees of the Social Security Administration.

I'm not surprised. Four of the the six Trustees are top Bush appointees or members of President Bush's cabinet....Treasury Secretary John Snow, Labor Secretary Elaine Chao, Social Security Commissioner JoAnne Barnhart and Health & Human Services Secretary Mike Leavitt.

Starting with his second term, the President required all cabinet members and top appointees to sign loyalty oaths, stating that they would neither issue nor utter any opinion contradictory to the President's.

And President Bush is stubbornly determined to force his expensive brand of privatization on American taxpayers, regardless of the admitted fact that it does nothing to solve Social Security's long-term funding concerns.

Remember, there is no crisis in Social Security.
A New York Times editorial today on the same subject.....About That Number

The Social Security trustees issued their annual report yesterday and said that by one measure, the shortfall in Social Security's finances jumped from $10.4 trillion last year to about $11 trillion this year. Eleven trillion dollars! The trustees, in service to President Bush's alarmist warnings about the need to do something drastic about Social Security, are dishing up some misleading numbers.

It's bad enough that the trustees began some of their calculations with that $10.4 trillion figure. It's arrived at by projecting the system's shortfall over infinity, rather than the usual 75-year time frame - as if the system's finances 10,000 years from now are a legitimate policy concern. Moreover, no less an authority than the American Academy of Actuaries is already on record debunking infinite projections as conveying "little if any useful information about the program's long-range finances" and "likely to mislead anyone lacking technical expertise ... into believing that the program is in far worse financial condition than is actually indicated."

Compounding the subterfuge is that the difference between this year's $11 trillion eyepopper and last year's number - $600 billion - is being used as evidence of a scary deterioration in Social Security's finances. That's just wrong. The two monster numbers are actually the same quantity - different ways of expressing an unchanging level of debt at two different points in time. If you owe someone $1,000 in 10 years, for instance, you could retire the debt now with $500, or next year with $530. Your level of debt doesn't change, just the time point.

Some people who interpret the numbers as a deterioration appear to be confused. But others, like President Bush, are being deliberately alarmist. Mr. Bush's persistent misstatements on Social Security leave little doubt that he wants Americans to believe that the system is irretrievably broken so that they will buy into his unnecessary privatization plan.

Fortunately, the unpoliticized numbers in yesterday's report are not overly dire. Using a 75-year time horizon, the trustees project that the system will be able to pay full benefits until 2041, at which time it will be able to pay 74 percent of the promised benefits, falling to 68 percent by 2079.

That works out to a gap of $4 trillion, which could be bridged with modest tax increases and benefit cuts, phased in over the next few decades. If people try to tell you different, they need to be set straight.

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