12/22/2004

There Are Five Lights

It appears clear that President Bush is going to make Social Security reform a central theme of his second term. A key facet of his plan is to allow individuals to put some of their Social Security contributions into individual retirement accounts; a plan that Democrats and the media deceptively refer to as "privatization".

Opponents of the president's plan are many, and their arguments are varied. During the campaign, John Kerry called it a "rip-off". But everyone seemed to agree that something had to be done to fix the program. That is, until now.

Now that Bush has made his intentions clear on Social Security, Democrats are claiming that there is no problem with Social Security.

President Bush's entire plan for Social Security privatization rests on the premise that the system is in severe crisis. But a careful look at the numbers suggests that the financial crisis is largely a myth.

Republicans are counting on younger voters to support privatization. Polls show that the young have been so swayed by the talk of endless crisis that many young workers doubt whether they'll ever get anything back from the current system. To them, getting some money in the form of private accounts is at least half a loaf.

In the coming debate, defenders of Social Security need to educate the public on just how solid the existing system is and just how exaggerated is its supposed crisis. If they fail to do that, and get bogged down in a debate about how to "fix" a system that isn't really broken, the privatizers will win, and Social Security will be needlessly pillaged.
"What crisis?" appears to be the new tactic of the left. CNNMoney quotes Mark Weisbrot and Dean Baker as saying that "Social Security can pay full benefits as promised until 2042" without mentioning that it will have to borrow to do so. CNNMoney also didn't see fit to find any "experts" on the other side of the argument. Who are Mark Weisbrot and Dean Baker? They're the authors of Social Security : The Phony Crisis, and may have some financial incentive to paint a rosy picture of Social Security.

The The 2004 OASDI Trustees Report is crystal clear on this matter:
Projected OASDI tax income will begin to fall short of outlays in 2018 and will be sufficient to finance only 73 percent of scheduled annual benefits by 2042, when the combined OASDI trust fund is projected to be exhausted.
In fourteen years, the program will be in the red. In 38 years, it will be flat broke.

Anyone who argued during an election cycle that Social Security "isn't really broken" would have been laughed out of the primaries. In September of 2003, John Edwards said this about the program:
We have a train wreck coming. We have the onslaught of the baby boomers coming.
No one accused Edwards of inventing a crisis for political purposes.

First we had Michael Moore saying "there is no terrorist threat!" Now, the cult of hatred that surrounds President Bush is telling us "there is no Social Security crisis!" What's becoming increasingly clear is that there is no credible opposition party.