I’ve often wondered what Social Security means to me, but never expected to read the following, rather astounding, explication: “Unless action is taken soon to strengthen Social Security, in just 11 years we will begin paying more in benefits than we collect in taxes,” the letter said. “Without changes, by 2040 the Social Security Trust Fund will be exhausted.” Exhausted? I’ve been fairly pessimistic about the future of Social Security and tend to side with those who recommend not counting on those benefits when calculating one’s retirement. But I thought the Social Security Administration itself might hold out more hope for its own future – let alone yours and mine. Evidently, it doesn’t.
One would think with all the excellent discussions on the finances of the Social Security Trust Fund, Dunleavey would have more to say than to rehash the spin from the privatization crowd or better sources than Olivia S. Mitchell “who has served on the president’s Commission to Strengthen Social Security”. Dunleavey and Mitchell claim all one has to do is add and subtract. But add and subtract what? It seems there are aware of those Trust Fund reserves that will help fund Social Security benefits from 2017 to 2040, but then they drag out this canard:
True, those I.O.U.’s are a promise to repay, “backed by the full faith of the U.S. government, so people are right to see them as secure,” Professor Mitchell added. “But the Treasury goes ahead and spends that money, so although there is a promise, nobody knows where the money will come from to pay them back.”
I guess they believe that the Federal government MUST run General Fund deficits forever as if it were impossible to raise taxes. As far as the Social Security system becoming exhausted as of 2040 – that’s simply not the case as long as we pay payroll taxes. Of course, the real question is why are we paying payroll taxes? Are they contributions to our future Social Security retirement benefits or just substitutes for taxes that would have been paid out of the incomes of the very well to do?
I’m not sure about Brad’s claim that this is the worst article on this topic ever as it strikes me as a mere rehash of the incessant silliness on this topic we’ve heard for years.