Dean Baker: Social Security Solvent Through 2038, Obama Wrong

Dean Baker debunks the conservative myth about the alleged insolvency of Social Security and the necessity of “shared sacrifice” (which appears to mean that ordinary citizens sacrifice and the wealthy gain the results of their sacrifice):

The determination to cut Social Security is especially strange given the finances of the program. Under the law, Social Security is financed by the designated Social Security tax. It does not contribute to the deficit,

And the date where this could be an issue is still relatively distant. The Congressional Budget Office just released new projections showing that the Social Security trust fund is fully solvent through the year 2038. Even after that date, the program would have enough money to pay 81 percent of scheduled benefits for the rest of the century. …

Furthermore, this gap is not hard to close. Currently, the tax on the wages subject to the tax is capped at $107,000. The upward redistribution of income over the last three decades has caused a large share of wage income to escape taxation, …

Most people would be surprised to know that 5 percent of the wage growth projected over the next three decades would be sufficient to keep Social Security solvent.

(Bolds are mine.)

Unfortunately, Obama is one of those wielding the largest shovel on this issue. Do not believe him. Do not believe the GOP BS slingers. Washington… Republicans and Democrats alike… no longer has our interest in mind. Scream like bloody hell about this every chance you get.

 

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Comments

  • MandT  On Monday August 22, 2011 at 8:39 pm

    There are roughly 70 million Baby boomers out there and apx, 55 million of us are on Medicare and Social Security. No senior democrat in her/his right mind should vote for O’Bozo second time around.

    • Steve  On Tuesday August 23, 2011 at 9:43 am

      MandT, Baker’s work, and indeed the CBO’s analysis, reveal nothing new. It has been well established for many years that SocSec is on a sound financial footing, and will be so for a couple of decades, more with only minor tweaks to the funding mechanism. The whole conflict over SocSec originates from a baldfaced lie repeated over and over by greedy people in the financial sector, who want to get their hands on OUR money for their own nefarious purposes.

      I think that will eventually happen. And I think that may be the trigger event sparking violence in the streets. Anything that results in huge numbers of homeless and/or starving Americans would probably do that, but somehow the greedies don’t see the almost certain outcome.

      If I get hungry, I plan to eat the rich. Literally. 👿

  • MandT  On Tuesday August 23, 2011 at 8:06 pm

    If we get hungry lets go to Fallenmonk’s and volunteer for garden weeding. The eats are verrrry good there. 🙂

    • Steve  On Wednesday August 24, 2011 at 8:19 pm

      Fallenmonk’s place sounds good to me! Who will call him so we can invite ourselves? 🙂

  • NTodd Pritsky  On Tuesday August 23, 2011 at 9:20 pm

    Eliminate the cap and it’s done. I’m sure Super Congress will do that.

    Also, tax cap gains an additional 12.4% payroll tax. Why the hell is that kind of income not subject to FICA?

    And somebody buy me a unicorn.

    • Steve  On Wednesday August 24, 2011 at 8:24 pm

      NTodd, I believe you’re right. IIRC, the income cap now is about $107k, and as the income gap widens, more people are above that today… recover what those (ahem) “unlucky duckies” are no longer paying, and that will probably take care of the shortfall. Now the problem is how to render that into law… the Super Committee ain’t gonna do nuthin’ useful.

      Why is capital gains not subject to payroll tax? I’d bet on the obvious reason: the very rich, who no doubt have the greatest capital gains income, don’t want to pay it, and it’s obvious who has Obama’s and Congress’s ear these days.

      Regarding the unicorn… in the old old days, Rice U. and U. Texas were rivals in football. By my day at Rice, not so much… Rice often went an entire season w/o winning any games, and UT was rival to Texas A&M. But people still attended the Rice-Texas game. UT of course chanted “Hook ’em, Horns!” and made the appropriate sign. We poor Rice students replied by chanting “Hook ’em, Unicorn!” … and made the appropriate sign. 🙂

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