Suppose our top generals described the growing threat from a hostile Middle East power. The country has tens of billions of oil dollars, a growing army, chemical and biological weapons, and is in the process of developing nuclear weapons. After carefully describing the risks posed by this country, our generals suggested an immediate attack on Canada. They explain that combating this Middle East country would be difficult, but defeating Canada is easy.
This is essentially the story of the latest attack on social security. Everyone who looks at the projections agrees; the scary budget stories being hyped in the media and by the Wall Street crew are driven almost entirely by projections of exploding health care costs. But instead of proposing ways to fix the health care system, these deficit hawks want to attack social security. They tell us that fixing health care is hard. By contrast they think that cutting money from social security will be relatively easy.
The facts on this are straightforward and known by everyone involved in the budget debate. The US health care system is broken. We pay more than twice as much per person as the average for other wealthy countries.
And it is projected to get worse. In three or four decades we are projected to pay three or four times as much per person for health care as people in countries like Germany and Canada. Since more than half of our health care is paid through public sector programs like Medicare and Medicaid, this explosion in health care costs will bankrupt the government if it actually occurs. Of course it will also devastate the private sector.
On the other hand, it is easy to show that if we contain health care costs then our budget problems are relatively minor. In fact, the current projections of enormous budget deficits two or three decades out would flip over to projections of enormous budget surpluses if our health care costs were comparable to those of any other wealthy country.
Logic would dictate that our top priority should be getting our health care costs under control. But fixing health care is difficult because, as we saw in the health care debate, this means confronting the health insurance industry, the pharmaceutical industry, the medical supply industry, highly paid medical specialists and other powerful lobbies.
The deficit hawks don't want to fight this fight. Defeating these powerful interest groups would be a hard fight. And for the deficit hawks it would likely be an especially painful fight since these are their friends.
By contrast, the Wall Street deficit hawks don't have friends who depend on social security for their income. Wall Street investment bankers like Peter Peterson and Robert Rubin are unlikely to associate with such people. This is why they see attacking social security as easy.
Of course attacking social security makes as much sense as our generals' plan to attack Canada. The Congressional Budget Office's projections show that the program can pay full benefits until the year 2044 with no changes whatsoever. Even after that date the program would always pay a higher benefit than what current retirees receive, even though somewhat less than the full scheduled benefits.
The long-term problem is not that anything improper has been done with the program; the reason that social security is projected to eventually face a shortfall is that future generations are projected to live longer than we do. This raises costs since our children and grandchildren are projected to enjoy longer retirements than we do. In short, there is no story of generational inequity here, contrary to what the Wall Street deficit hawks say.
If our deficit hawk generals are too scared to take on the health care industry then we also have to also make them too scared to take on social security. If we need to reduce the deficit the best place to start is a financial speculation tax. A modest set of financial transactions taxes, like the 0.5% tax on stock trades in the United Kingdom, can easily raise $150bn a year. This would go a long way toward addressing future budget shortfalls and it would raise money from people who can afford it: the Wall Street crew whose financial shenanigans led to the meltdown.
Federal Reserve board chairman Ben Bernanke recently suggested cutting social security because: "that's where the money is". That's not true, the real money is on Wall Street. Let's go get it.
This country goes a trillion in the red every year. Why? What is the major problem with our country's financial system, that the people in charge of budget and so forth just can't bring themselves to say 'no'/
The number of workers paying into the program was 6.1 per retiree in 1960; this declined to 3.2 in 2008 and is projected to decline to 2.1 by 2040.
Further, life expectancy continues to increase, meaning retirees collect benefits longer.
The number of workers paying into the program was 6.1 per retiree in 1960; this declined to 3.2 in 2008 and is projected to decline to 2.1 by 2040.
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I keep hearing these numbers -- "Only 2 workers supporting the retirees by 2040."
What about after that?
Got any numbers for 2060? 2080?
The "Baby Boomer" generation was born between the years of 1946 and 1964. In 2040, the youngest of the Baby Boomers will be 76 years old, the oldest will be 94. SOME of these people would have died off by then; what will that do to the numbers?
It looks to me like the 2040 figures are a low point that will then go back to "normal" levels soon thereafter. Wasn't that what the "trust fund" was supposed to be for, anyway?
Raiding social security & medicare using deficits as a Red Herring is "Shock Doctrine" in action. Why do conservatives want to do this "radical" thing while they don't want to change most of the other things (healthcare, income inequality etc). Yet another example of why conservatism is incoherent & contradictory and hence nothing good can come out of it.
Give me a break.
50% of Americans in 2009 paid NOTHING . . . 40% received more from the Government than they paid in . . .
Having 40% of Americans, and growing, on welfare is a terrible problem.
Again, it is ironic that the focus in this country is the "bread crumbs" to the less fortunate, as opposed to the chunks of bread for the very well off.
Why didn't Obamacare address costs? A tragic missed opportunity.
Did anyone think of cost when I came to Iraq??? When has any country won or made a difference in the Middle East? That is an area ruled by religion, caste, family, tribe and bribery: always has been and always will. The previous administration and the father before introduced us to mercenaries.. who cost taxpayers more than we will ever comprehend.
I suggest we put many feet to the fire.. and make those who put us in this mess fiscally responsible for paying us back.. they worked for us and apparently stole from us..
Ignoring the why, this is WHY I will never vote for Obama or any of his camp followers again.
If some people want to give the government their money for retirement let them. Let's give the people a choice. Afterall, aren't progressives all into that choice thing anyway?
Who is "Guy" anyway?
Again, what about choice? Let those that want the government to "invest" in their future have it. I'd prefer it if I wasn't held at gunpoint by the government every paycheck.
I not so sure about that. With childhood obesity at pandemic levels and the little lovely's sitting around playing video games all day. I'm sure the little fat asses won't beat us.
Go Boomers!!!!
Wall Street, banks, corporations and lobbyists have high-jacked our Democracy making our votes invalid.
They buy contact time with elected representatives to further their own personal agendas and personal interests which void our votes with their ability to put undue influence on elected officials.
Until the public makes it known they are tired of their greed and their attempts to influence our representatives it won't stop.
Wall Street acts like they aren't even part of America but they are the first with their hands out for a bailout or tax cuts.
Tax cuts to any corporation regardless of industry should come with strings attached to job creation.
If they can't act like Americans and provide the economy with jobs they should not be allowed to profit from downsizing, shipping jobs overseas, and taking American tax payer dollars.
I suspect most Americans are oblivious to the fact that high wage earners pay social security tax only for a short time each year. It is the most regressive tax around and Democrats (if they had any cajones or were not too obligated to corporate fat calfs themselves) should campaign to raise the cap on incomes. This could be a very popular/populist issue that could help split the lower socioeconomic realm of the Tea Party movement away from the Republicans!
"Federal Reserve board chairman Ben Bernanke recently suggested cutting social security because: "that's where the money is". That's not true, the real money is on Wall Street. Let's go get it."
Indeed.
But funny you should mention health "care" reform in your article without mentioning the precedent it is setting:
Mandated financial services - propping up an unsustainable private industry (the health insurance industry) with taxpayer subsidies. An old "Republican" concept, those mandates, put into action by a Repub-, excuse me, Democratic executive branch. Ben Bernanke, an old Bush appointee, put back into play. What they really want to do is redirect those automatic deductions to WS for them to gamble.
They will promise you big returns, but crash and burn is what you'll get. Americans can barely manage their "mortgage" - as we've seen. A BASIC investment in most cases. WS KNOWS that they have no rules, being essentially unregulated and they are READY TO FLEECE you.
In short sightedness, there is your groundwork for the filthy WS financiers getting their hands on Social Security (no matter HOW health care is reformed or changed from this point on - that precedent is still there).