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Nbadan
08-15-2005, 03:16 AM
Social Security turned 70 yesterday. And to almost everyone's surprise, the nation's most successful government program is still intact.

Just a few months ago the conventional wisdom was that President Bush would get his way on Social Security. Instead, Mr. Bush's privatization drive flopped so badly that the topic has almost disappeared from national discussion.

But I'd like to revisit Social Security for a moment, because it's important to remember what Mr. Bush tried to get away with.

Many pundits and editorial boards still give Mr. Bush credit for trying to "reform" Social Security. In fact, Mr. Bush came to bury Social Security, not to save it. Over time, the Bush plan would have transformed Social Security from a social insurance program into a mutual fund, with nothing except a name in common with the system F.D.R. created.

In addition to misrepresenting his goals, Mr. Bush repeatedly lied about the current system. Oh, I'm sorry - was that a rude thing to say? Still, the fact is that Mr. Bush repeatedly said things that were demonstrably false and that his staff must have known were false. The falsehoods ranged from his claim that Social Security is unfair to African-Americans to his claim that "waiting just one year adds $600 billion to the cost of fixing Social Security."

Meanwhile, the administration politicized the Social Security Administration and used taxpayer money to promote a partisan agenda. Social Security officials participated in what were in effect taxpayer- financed political rallies, from which skeptical members of the public were excluded.

I'm writing about this in the past tense, but some of it is still going on. Last week Jo Anne Barnhart, the commissioner of Social Security, published an op-ed article claiming that Social Security as we know it was designed for a society in which people didn't live long enough to collect a lot of benefits. "The number of older Americans living now," wrote Ms. Barnhart, "is greater than anyone could have imagined in 1935."

Now, it turns out that an article on the Social Security Administration's Web site, "Life Expectancy for Social Security," specifically rejects the idea the Social Security was originally "designed in such a way that few people would collect the benefits," and the related idea that the system faces problems from "a supposed dramatic increase in life expectancy in recent years."

And the current number of older Americans as a share of the population is just about what the founders of Social Security expected. The 1934 report of F.D.R.'s Commission on Economic Security, which laid the groundwork for the Social Security Act, projected that 12.7 percent of Americans would be 65 or older by the year 2000. The actual number was 12.4 percent.

Despite Ms. Barnhart's efforts, however, privatization seems to be dead for the time being. The Democratic leadership in Congress defied the punditocracy - which was very much in favor of privatization - by refusing to cave in, and the American people made it clear that they like Social Security the way it is.

But the campaign for privatization provided an object lesson in how the administration sells its policies: by misrepresenting its goals, lying about the facts and abusing its control of government agencies. These were the same tactics used to sell both tax cuts and the Iraq war.

And there are two reasons to study that lesson. One is to be prepared for whatever comes next on Mr. Bush's agenda. Despite the tough talk about Iran, I don't think he can propose another war - there aren't enough troops to fight the wars we already have. But there's still room for another big domestic initiative, probably tax reform.

Forewarned is forearmed: the real goals of reform won't be as advertised, the administration will say things about the current system that aren't true, and the Treasury Department will function in a purely partisan capacity.

The other is that the public's visceral rejection of privatization, together with growing dismay over the debacle in Iraq, offers Democrats an opportunity to make an issue of the administration's pattern of deception. The question is whether they will dare to seize that opportunity, when for some of them it means admitting that they, too, were fooled.

Paul Krugman, NY Times (http://www.nytimes.com/2005/08/15/opinion/15krugman.html)

Krugman has publicly lamented several times that he hasn't been allowed to call Bush a liar- and was especially perturbed about an incident during the 2000 campaign where Bush's arithmatic was so blatantly false that a 6th grader could see it- yet the editors forced him to stay his hand....

I guess if a Republican lies enough- AND he isn't running for office- then it's OK to call him a liar in the Times these days....

Clandestino
08-15-2005, 08:43 AM
the average life expectancy in 1934 for males was 59 and 61 for females... they didn't actually expect to pay out much i'm sure by setting the bar that high.

here is the data from the CDC...

http://www.cdc.gov/nchs/data/dvs/nvsr52_14t12.pdf

SWC Bonfire
08-15-2005, 09:00 AM
the average life expectancy in 1934 for males was 59 and 61 for females... they didn't actually expect to pay out much i'm sure by setting the bar that high.

here is the data from the CDC...

http://www.cdc.gov/nchs/data/dvs/nvsr52_14t12.pdf

Well, It doesn't work that way. A large portion of the lower average life expectancy in 1934 was due to higher infant mortality rates and death in childhood. The actual life expectancy of a person once they reached adulthood was much higher than 59 & 61.

The reason that social security is "insolvent" is because the surplus in payroll taxes taken in for the last 70 years was replaced by Congress by an IOU to the OASDI (Old Age & Survivors Disability Insurance, aka Social Security) fund. Also, adding benefits to those who never contributed or contributed very little to the plan was politically expedient but not prudent in the least. In spite of this, if you count the IOU's, social security would be solvent until like 2086 or so (you can look that up, I may be off a few years).

So, if Congress pays back the IOU's, there won't be any problem. The problem is that there aren't many workers to pay it back, and the Congress has no alternative to raise induvidual taxes to pay social security recipients. As the population ages, that means fewer workers to pay back SS benefits for an increasing number of people.

So when someone says that SS would be solvent as is, technically they are correct. But all the money that should be in savings right now is in freeways, schools, shipyards, airplanes & other needed government projects. Some say that the money was squandered, but a lot of it was used to benefit a lot of people so that they could make money to pay into the system.