Yesterday I wrote about the new rounds to come in the phony crusade to “save” Social Security from bankrupting the country and destroying the lives of our grandchildren. This manufactured crisis has gained new traction during the recession. It is likely to be used by conservatives (apparently with some cooperation from the Democrats) in a quest to cut old age entitlements–in effect taking money away from elders to pay for the Wall Street bailout.
I mentioned that, contrary to the overheated rhetoric, Social Security was projected to remain solvent for at least three decades (the exact number was 32 years, until at least 2041). Today, according to the AP, that figure has been downgraded to 28 years. The trustees for Social Security and Medicare now project that the trust fund could run out in 2037, due to the reduction in payments into the fund as a result of the recession’s job losses.
This means that in terms of solvency, the giant government program is still running 28 years ahead of Citibank, Bank of America, and the other behemoth private financial institutions run by the high-paid geniuses of Wall Street (and much longer, if you count the years when the bubble was expanding). In addition, the Social Security trust fund is still in better shape than it was a decade ago, according to the Center for Budget and Policy Priorities.
As for Medicare, which actually is in pretty bad shape–that cannot be “fixed” by even the mot draconian cuts to the health care of the nation’s elders. The only long-term solution to the Medicare shortfall must come through comprehensive reform that reduces the private profits of the health care industry.
In spite of these fact, the trustees’ report is already being brandished by proponents of entitlement cuts. Within hours of the report’s release, a new post on the Cato Institute’s blog was warning that it “shows that the program’s financial crisis is growing worse while Congress has continued to duck the issue.” As for the solution–even the financial meltdown that has decimated all of our 401(k)s is not enough to avert the likes of Cato from its true agenda:
critics of personal accounts for Social Security have pointed to the decline in the stock market over the last few years as an argument against allowing younger workers to privately invest a portion of their Social Security taxes. Yet as the new Trustee’s Report shows, the same poor economy that hurts the stock market, hurts Social Security’s ability to pay its benefits.
In the end, there are only three possible solutions to Social Security’s problems. Taxes could be raised (and the Social Security payroll tax would have to be nearly doubled to keep the program afloat). Benefits could be cut. Or younger workers could be allowed to invest privately.
And there we are: In two easy step, we’ve returned to the most cherished–and most discredited–domestic policy objective of the Bush Administration, the privatization of Social Security.