Social Security is worse off than you think

How bad off is Social Security?

Well, apparently there are people on death row with a better long-term chance of survival.

Without using those words, that’s pretty much the conclusion of Charles Blahous. He is a senior research fellow at the Mercatus Center at George Mason University and a public trustee for Medicare and Social Security. He wrote a piece recently that argues things are a lot worse than people understand. (Read the full piece here.)

Blahous said we’re rapidly approaching the point where a political solution to Social Security’s woes is no longer possible. As it is, such a thing would require huge concessions by both sides. That means, “either progressives must accept substantial benefit growth reductions, conservatives substantial tax increases, or both.”

Because neither party is expected to hold a veto-proof majority in the near future, compromise is essential, but it’s also politically impractical.

Blahous uses figures and charts to argue that even the toughest solutions proposed today no longer will work.

“Individuals now planning their financial futures, whether as taxpayers or as beneficiaries, should be pricing in a substantial risk that the federal government will not be able to maintain Social Security as a self-financing, stand-alone program over the long term,” he wrote. “If Social Security financing corrections are not enacted in 2013, or at the very latest by 2015, it becomes fairly likely that they will not be enacted at all.”

Instead, the program might have to proceed as one that relies forever on subsidies from the general fund.

But that means it also would have to compete each year against other national priorities, rather than exist in its own dedicated trust fund (which until now has been routinely plundered to pay for other government expenses).

He paints a bleak picture, indeed. Most public reports are that the program’s real problems won’t begin until 2033. This, Blahous says, makes it seem as if the problems are remote and easily solved. That is not true.

Unfortunately, what is true is that neither party is coming to grips with the idea that, when it comes to the nation’s elderly, dithering is the cruelest act of all.

About the Author

Jay Evensen

Jay Evensen is the Senior Editorial Columnist for the Deseret News. He has 32 years of journalism experience covering politics and a variety of other assignments at news organizations ranging from United Press International in New York City to the Las Vegas Review-Journal and the Deseret News, where he has worked since 1986. During that time, he has won numerous local, regional and national awards. Most recently, he was given the Cameron Duncan Media Award, given annually in Washington, D.C., by the advocacy group RESULTS, to the journalist judged to have done the most to further the cause of the world's poorest people.

2 comments

  1. Ronald D. Hunt

    The projection from the trustees report that puts SS running out in 2033 is frankly delusional. It depends on continued wage stagnation, a somewhat higher unemployment rate(5.5%ish), lower immigration, and higher retirement rates having no upwards pressure on wages.

    If wages continue to grow at half the inflation rate for the next 25 years, SS won’t be the primary concern on your mind, the 80% or so of Americans making around $15,000 2011 inflation adjusted dollars per year and all of the problems with such wide spread poverty will be.

    Either way its delusional, as the retirement rate picks up over the next 10 years or so we will hit full employment and demand for immigration and wage pressure will go up and fill much of the projected hole in SS. This likely isn’t the case for Medicare, but that is a different problem related to the cost of medical care across all sectors public and private, we either get the cost of delivering care down or at current growth rates the cost of a basic health insurance plan will exceed the median wage around 2030 anyway and won’t be affordable for anyone regardless of what is done with medicare.

  2. Joseph Atwater

    Nobody questioned Rumsfeld or Hayden or Mr Black about how much monies were pilfered out of the Social Security and tax revenues of Amenricans to fund the multi Trillion dollar war of Iraq that is a “State Secret”
    That expenditure would have funded every woman man and child in America until maturity. 300 Million persons divided by 10 Trillion dollars. It doesnt take a combat artillary specialist to do the numbers. War dollars will always get precedence over the welfare of the individual. Life is expendable and cash inexhaustable in the eyes of its perpetrators; the Military and the politicians who extoll Patriotism

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