| There's a time-tested way to curry favor with the permanent Washington establishment. That is, having David Broder praise you for being "responsible" and being considered a Very Serious Person by the Sunday shows. All you need to do is proclaim ominously that entitlements are a ticking time bomb, a looming storm on the horizon, a hungry beast ready to devourour nation's finances, or whatever metaphor you find most frightening. The more unpleasant the solution you propose -- tax increases are good, but benefit cuts are even better -- the more the Beltway Brahmins will approve. <snipped> If there is an "entitlement crisis," it's a crisis in Medicare. But as Ezra Klein explains so well, there really isn't a Medicare crisis, either. Medicare's funding problem is a problem of the ballooning cost of health care in general; fix that, and you've fixed the Medicare problem. The myth of the "Social Security crisis" is so pervasive and so pernicious//snpd//- witness the recent round of full-page newspaper ads featuring a looming iceberg and screaming headlines about the $56 TRILLION!!! we're supposedly in the red (these are funded by hedge-fund billionaire Pete Peterson, the Daddy Warbucks of the entitlement fear factory). So let's examine what the crisis-mongers say, and what the truth is. For years, we've been told that Social Security is "going broke."/snpd/ This is simply bogus. The truth is that the system is quite healthy and can meet all its future obligations with only minor adjustments/snpd// Before we get to that, let's remember how Social Security works. The payroll tax on today's workers is used to pay out benefits to today's retirees. When you retire, your benefits will be paid by people working then. (Of course, to many conservatives, a system built on this kind of mutual obligation is redder than Joe Stalin's underwear.) For some time now, the taxes being paid in have exceeded the benefits being paid out. What's left over goes into that famous "Social Security trust fund," also known as the Social Security surplus. The trust fund is still growing; in 2007, $179.3 billion wasadded to the fund, bringing its total to over $2 trillion./snpd/ 2017, remember it, because they'll always bring it up -- is when the sky will tear loose from its moorings and begin hurtling toward our heads. But here's the thing: The period of benefits exceeding tax payments that is supposed to begin that year is exactly the reason why the Social Security surplus exists in the first place. We keep adding to the surplus every year precisely so that it will be there to draw on when we need it. And the baby boomers' retirement is when we'll need it. But ah, you say, what happens when the trust fund is exhausted? Isn't that when all hell breaks loose, as the system truly "goes broke"? No. The system will never "go broke."/snpd//And what happens if you accept that low-cost projection? When does the Social Security trust fund run out in that case? Never. It never runs out (here's the graph, if you're interested). The Social Security trustees aren't the only ones who have tried to crunch these numbers; the Congressional Budget Office estimates that the trust fund will be exhausted in 2049, not 2041, and that at that point tax revenues will cover 84 percent of benefits, not 78 percent. But looking at all the various projections, one has to conclude the following: At some point, somewhere between 30 and 70 years in the future, the Social Security trust fund may be exhausted. If it is exhausted and taxes are not raised, beneficiaries will see a reduction in benefits that will be meaningful, though not catastrophic. If that's how you understand the issue, it suggests that a fix to ensure that benefits end up where they're supposed to needn't be anything radical. You could raise the cap on Social Security taxes, for instance (the tax is only paid on the first $106,800 of income, meaning most people pay it on 100 percent of their salaries, while Alex Rodriguez pays it on less than 4 percent of his salary). If, on the other hand, you think the system is in crisis and is going broke, you're going to favor much more painful solutions. Thankfully, President Obama seems to understand the difference between a manageable problem and a looming calamity. "Social Security, we can solve," he recently told The Washington Post with a dismissive wave of his hand. But we know that the conservatives will continue to harp on the myth of the Social Security crisis. /snpd// The real problem is not that the solution to the crisis is unpalatable. It's that there is no crisis. Don't let them tell you otherwise. //snipped for brevity// | 
