Dean Baker On Social Security: The Good News And The ‘Bad’ News

Dean Baker, an economist typically on my side of the political spectrum, reports on an allegedly nonpolitical assessment of Social Security by its trustees… as Baker emphasizes, not the SSA’s professional economists, but the appointed trustees (including three by Obama, one by Bush and one “independent” member who was in fact one of Bush’s privatizers [privateers?]), who are not bound by the recommendations of the professional staff.

Here are some samples of Baker’s thinking:

This bad news about the program is also the good news. The main reason that the program’s finances deteriorated between the 2010 report and the 2011 report is that, in the 2011 report, the trustees assumed that we would enjoy substantially longer life expectancies than they did in the 2010 report.

They increased their projected life expectancy for men turning age 65 in 2010 from 18.1 years to 18.6 years, a gain of 0.5 years. The trustees increased their projected life expectancy for women turning age 65 by 0.3 years. Remarkably, virtually no one in the deficit-obsessed media even noticed this projected increase in life expectancy, simply highlighting the bad news about Social Security’s finances.

and

Even accepting the 2011 report at face value, the picture is hardly as dire as many politicians in Washington are claiming. We have seen much worse before. For example in 1997, the trustees projected a shortfall that was equal to 2.23 percent of payroll. At that time, their projections showed the trust fund first being depleted in 2029.

and

… They are fond of reporting things like the program’s $17.9 trillion shortfall over the infinite horizon.

The focus groups show that this one is really good for scaring people. After all “trillion” is a really huge number and $17.9 trillion must be really, really huge. Of course no one has any clue what “infinite horizon” means. So, no one knows that this is a projection of what the program looks like in the 23rd, 24th, and 25th century and beyond, if we never change it in any way.

The vast majority of this $17.9 trillion shortfall comes in years after 2200. Social Security does have a long planning period, but if anyone thinks that we are actually making policy for the 24th century then we should keep this person far removed from the levers of power.

The best way to make the size of the projected Social Security shortfall understandable is to put it in context. Relative to the size of the economy, the projected Social Security shortfall is equal to 0.7 percent of GDP. By comparison, annual spending on the military increased by more than 1.6 percentage points of GDP between 2000 and 2011. So, the burden imposed by the wars in Iraq and Afghanistan is almost 2.5 times larger than the money that would be needed to eliminate the Social Security shortfall.

(All emphasis mine.)

Has anyone yet hired Harry Potter and his classmates to use one of those devices that allow them to look into (or even visit) the future? I can think of no other way that any member of Congress could claim to know what Social Security policy will need to be in the year 2200. Good grief. Plan through 2100… that’s only prudent… but leave longer-term decisions to future Congresses who will have more facts at their disposal. And meanwhile, remember that Harry Potter is a fantasy.

The biggest battle conservatives in our government are fighting right now is not the War on Social Security as such, but the War to Keep The Wealthy Wealthy. There are no problems with Social Security that cannot be solved by a fairly small tweak. Most of what the public believes is catastrophically wrong with Social Security is a suite of willful misrepresentations, focus-group-tested to persuade the public that there is a problem. Do not be fooled: the problems are nowhere nearly as bad as Obama and too many in Congress, Democrats as well as Republicans, are saying… falsely, and for their own political purposes. Do not let them get away with it.

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Comments

  • Kay Dennison  On Monday May 16, 2011 at 7:51 pm

    Thank you!!! It verifies what I suspected and that what I learned from my 3rd grade teacher was true: Figures don’t lie but liars figure. And if the GOP got a ride to the future, what wizard took them there? Voldemort. Need I say more?

    • Steve  On Monday May 16, 2011 at 9:27 pm

      Kay, somewhere there’s a video of “Rovemort” doing evil wizardly things in the Harry Potter universe our universe. I’ll try to see if it’s still around, and if so, I’ll link from this comment.

      HERE IT IS!

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