Monday, August 16, 2010

There's no problem with Social Security until 2037 then - whoops! - there's a problem

I'm so tired of Enron advisors like Paul Krugman who not only insist that Social Security is in great shape but that, if you disagree with that statement, you just want to destroy the program for ideological reasons. Stephen Spruiell counters the little guy's latest in "Flimflam from the Master Himself."

Spruiell lays out the simple and undeniable fact that the way the program is structured demands large payments from the general budget: "...the money has to come from somewhere: QED, higher taxes, fewer benefits, or a combination of both." This year we're seeing the first taste of Social Security's imbalance as the program cashed in $41 billion in Treasury IOUs. Where's the rest of the money going to come from once Baby Boomers start hitting the golf links in droves? It's a question begging for real answers, not empty political rhetoric.

Extra - WashPost: "Whatever the deniers say, Social Security needs reform soon." Why "soon"? Because if we take reasonable steps like raising the retirement age to scale with life expectancy, it will give younger workers a chance to adjust accordingly. Otherwise, in 2037 or so, it's "sorry, here's an automatic 25% cut in benefits."

In other words: there's an iceberg ahead. What say we start turning the wheel now?

More - Dean's World: "That is a real crisis, and when Krugman claims otherwise he isn't merely making a bad argument, he is delusional."

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