by Dale Coberly


There is yet time, brother. But not much.

The Social Security Trustees have issued their annual report. It is not much changed from last year. In fact it is a little better.  Last year’s Report projected that by this year Social Security would have reached “short term financial inadequacy.” This year’s projections put that off for another year or possibly two.

Short term financial inadequacy means that in ten years the Trust.  Fund reserves will fall below the level of one full year’s benefits if no action is taken.

This would not be a catastrophe, but it does mean we really ought to take action now. If we raise the payroll tax by one tenth of one percent per year until the total raise reaches about two percent of payroll, we would make Social Security solvent (financially adequate) forever: fully able to pay the benefits necessary for the people who paid the tax to live in reasonable comfort for their longer life expectancy… longer than that of their parents and grandparents. One tenth of one percent of payroll would be about a dollar per week subtracted from the paycheck of a worker earning $50,000 dollars per year. Or about fifty cents per week for a worker earning $25,000 per year. This is not money that goes into a government black hole, but money that comes back to the worker with interest when he needs it most. Enough money to pay for basic needs in retirement no matter how long he lives.  Or pay for his family’s needs if he dies with dependents or becomes disabled.

Meanwhile, the Committee For a Responsible Federal Budget does what it can to make the new Report sound like a Catastrophe in the making… as they have been doing for years. They do this by screaming about Big Numbers without reminding the reader that these big numbers are big because they are about 2% of the wages of 250 million people over a period of 75 years. If you read CRFB you have to be on the watch for this kind of misdirection. It is their stock in trade.

Worse, perhaps, is they imply that Social Security is a driver of the National Debt. Social Security has nothing to do with the National Debt.  It is paid for entirely by the people who will get the benefits.

That is essentially the case from the far Right.  Lately there has appeared a new case from the far Left. They say that the projected shortfall is not a problem because it can be solved by “making” “the rich” pay their “fair share.” The fact is that “the rich” already pay their fair share for the insurance benefit they receive. But they will not pay for your retirement, and you can’t “make” them. Nor should you. Your parents and grandparents were proud to be able to say “I paid for it myself.” And the man who invented Social Security designed it that way: designed it to be not welfare but worker paid insurance “so that no damn politician can take it away from them.”

The bottom line is this:  you need to get it fixed in your  mind first that you can save Social Security… a secure retirement… for yourself and your children and grandchildren by raising your own payroll “tax” (retirement insurance premium) ONE DOLLAR PER WEEK while your wages are going up ten dollars per week per year.   And second,  IT’S NOT GOVERNMENT MONEY. It has nothing to do with government deficits or the national debt. YOU PAY FOR IT YOURSELF and it is wisest to keep it that way.

If the one tenth of one percent payroll tax increase per year does not begin this year or next, the rate of tax increase would need to be faster.. not much faster, but if we wait until 2034 or so, the tax would need to be increased about 2% all at once. Still not a big deal when you think about it, but likely to be shocking to some, and politically dangerous.

There is a sort of middle ground. The tax could be increased about one full percent (according to the Trustees 1.42% for the worker and 1.42% for the employer) this year, and that would see us through the next seventy five years without another tax increase. After that, about another one full percent would see us through the “infinite horizon.” None of us will be alive then, and things may have changed, but the enemies of Social Security call that distant extra 1% “not solving the problem”.  They are sure we have to solve all possible problems forever before we can solve the problems we face today and for the reasonably foreseeable future. The one tenth percent per year “at need” proposed here actually does solve the problem over the infinite horizon… or at least past the 75 year actuarial,window,  but they don’t want you to even think about that.

So, think about it and see what you come up with. If you don’t think about it, and don’t DO something about it, the bad guys will win. And if you “demand” the rich pay for your retirement, the bad guys will win.