If you haven’t been reading along, then make no mistake about it: I believe Social Security is an inequitable system of asset transfer that will end up bankrupting this country once the army of Baby Boomers retires. When Social Security started in the mid-1930s, benefits were paid at age 62 at a time when the life expectancy was 60; most older Americans are now living well into their eighties. Between rising life expectancy and the Baby Boom bubble, the demographics are inescapable. Where there were once dozens of workers per retiree, there are now only three workers supporting every Social Security recipient and soon there will be only two.
So I think it’s a serious problem, which is why this article in the Sunday Boston Globe strikes me as unserious – almost flippant – about the problems facing Social Security. Some manner of economic columnist named Charles Stein wrote “Scare tactics obscure Social Security debate” that included incisive factoids such as this:
But is Congress really likely to shut off the spigot? Social Security has been around since 1935. Even without change, the system will still be writing checks to seniors in 2035.This is like saying: “I’ve been driving my car at 60mph for 10 hours and there’s no reason to believe it won’t continue at this rate” as the gas tank empties, the radiator explodes and the wheels come off.
With snide asides designed to belittle personal savings accounts, Stein offers no incisive analysis of the Social Security issue. Instead, in what can only be called a “Krugmanian style,” Stein writes an economic essay completely void of numbers or statistics. But he wants to see those numbers!
I am looking forward to the Social Security debate. I am planning to focus heavily on the numbers.Here are ALL the numbers that Stein lists in his half-assed jeremiad against Social Security reform: 2001 (year), 535 (politicians), 1935 (year), 2035 (year), 401(k) – a retirement plan designed to generate personal wealth (heresy!). Has he never heard of the Internet? Look at all the cool numbers you can find about Social Security:
1. Social Security will begin running a deficit by 2018.
2. The average worker can expect a rate-of-return of less than 2% on his or her Social Security taxes.
3. The Social Security payroll tax rate has grown from just 2 percent in 1949 to 12.4 percent today.
4. Social Security faces an unfunded liability of more than $26 trillion.
5. "Saving" Social Security without individual accounts could require a 50% increase in Social Security taxes or a 27% cut in benefits.
6. The Supreme Court ruled in Flemming v. Nestor that there is no legal right to Social Security benefits.
7. Social Security taxes have been raised more than 40 times since the program began.
8. The maximum original Social Security tax was just $60. Today it is $11,000.
9. In 1950, there were 16 workers paying Social Security taxes for every retired person receiving benefits. Today there are 3.3. By 2030, there will be only 2.
10. 46 million Americans receive Social Security benefits, including 32 million retirees, 7 million survivors, and 7 million disabled workers.
11. Social Security pays more than $450 billion in benefits each year. If nothing is done, by 2060, the combination of Social Security and Medicare will account for more than 71 percent of the federal budget.
12. 18-to-34 year olds are more likely to believe in the existence of UFOs than in the future existence of Social Security.
13. According to Gallup, reforming Social Security is a top priority for 33% of investors.
14. Nearly 80% of Americans pay more in Social Security taxes than they do in federal income tax.
15. Every two-year election cycle that we wait to reform Social Security costs an additional $320 billion.
16. The full retirement age today is 65 years and four months. It rises by two months every year, gradually increasing to age 67 for people born after 1959.
17. By 2030, there will be 70 million Americans of retirement age--twice as many as today.
In this fact-deficient article, Charles Stein joins Paul Krugman in a chorus of “Who are you going to believe: those right-wingers and their so-called statistics or me?”