Social Security and the StarTribune

Today's StarTribune editorial is pretty vile. They write

Of all the lies -- let's call them by their right name -- that the Bush administration is spreading about Social Security, none is as vile as the canard Bush repeated last Tuesday, when he said, "African-American males die sooner than other males do, which means the [Social Security] system is inherently unfair to a certain group of people. And that needs to be fixed." That is an entirely phony assertion; it has been debunked by the Social Security Administration, by the Government Accountability Office and by other experts. Bush and those around him know that. For them to repeat what they know to be a blatant lie is despicable fear-mongering.

The editorial then explains why they think the claim is a lie: Social Security is a combination of three programs - a pension scheme (the biggest chunk), an insurance scheme (it pays benefits to the survivors of those who die before reaching retirement) and a disability program (it pays benefits to those who become disabled before reaching retirement). Black males may get a pretty raw deal from the pension aspect of Social Security but they get a good deal on the disability and insurance portions and these effects tend to cancel each other out, making Bush a despicable, vile lying liar who tells lies.

However, no one is proposing any changes to the disability or insurance parts of Social Security. All the proposed changes regard the pension program, the one where Black males really are getting a bad deal. If the pension part allows for individual accounts and the disability and insurance portions are unchanged, Black males will especially benefit. Of course, calling Bush a liar has worked so well for the last four years, why not try it for another four?

The editorial ends with

Social Security is a complex program, so it's easy to tell outright lies or make misleading statements about it with little fear of contradiction from the general public. All Americans should be on notice that the Bush administration, in its drive to start dismantling Social Security, isn't telling the truth on several fronts.

The system is not in crisis; it has money to last for about the next half century, and even then, if nothing is done the required benefit cuts would still leave retirees better off than those getting benefits today. Pay close attention to this debate, and don't get snookered. The crisis in Social Security is no more real than the "crisis" that led the United States to war in Iraq.

The Iraq mention is just galling. Do they forget even Clinton was sure they had WMD? The "no crisis" quote is bothersome as well. It caused me to write the following letter. We'll see if it gets printed.

Contrary to the assertion in yesterday's editorial, yes Virginia, there is indeed a Social Security crisis, even though there are many facts which might cause one to be incorrectly unworried. For instance, right now the Social Security trust fund is solidly in the black and becoming more so every day. Further, the problem is not that benefit payouts will exceed Social Security taxes starting around 2018, and thus benefits will have to be paid by dipping into the trust fund. There is nothing wrong with a system which in some years brings in more than it pays out and in other years pays out more than it brings in. That's what the trust fund is for. The problem isn't even that the trust fund will be exhausted sometime around 2040, or when today's twenty-somethings retire. If demographics were such that from then on, taxes would cover benefits, having nothing left in the trust fund wouldn't be a problem. But the demographics are NOT favorable in 2040. When today's twenty-somethings retire, not only will there be no Social Security trust fund, but the ratio of retirees to workers will most likely be so large that Social Security taxes will not even come close to covering benefits. Now the date 2040 is, of course, an estimate. Perhaps the day the system hits the wall will be later (and perhaps not). But our best estimates are that the system will hit a wall where nothing, not a trust fund, not Social Security tax revenues, but a big fat nothing is set in place to pay benefits to today's young workers. That is indeed a crisis.