Most people around my age don’t sit around talking about Social Security benefits. But when the subject comes up, everyone always agrees that we will likely never be able to take advantage of the program. Either the treasury will have been emptied to pay the entitlements owed to our parents’ generation, or the system will have been reformed beyond recognition.
We understand how Social Security works. The money deducted from our paychecks underwrites the benefits claimed by today’s retirees. There are no individual retirement accounts, and there is no guarantee that we will realize even a penny of what we have contributed to the system.
Knowing this, it is amazing that a generational conflict is not erupting. The relative calm among young people is probably due to the fact that they don’t spend much time thinking about the subject. We are not actively concerned about how to make ends meet when we are retired.
But what if we are the first generation to spend our lives contributing to a program that gives us nothing in return when we reach the entitlement age? If anything, young people today are likely to live longer than any previous generation, which will make it even more difficult to finance our retirement.
President Bush is capitalizing on this kind of anxiety to promote his privatization scheme, which would create the kind of individual accounts that don’t exist today, allowing workers to invest part of their Social Security contribution in the stock market.
Supporters of this idea contend that Social Security is on its way to insolvency anyway, so this would be a way to ensure that people my age get something back. They also point to a higher long-term rate of return for market investments, and insist that eliminating the government bureaucracy would cut costs.
It’s a simple, compelling argument that appears to be rooted in common sense. However, it is predicated on false assumptions and overlooks some serious consequences.
The primary false assumption is that Social Security is in crisis. That’s not actually true, especially as it applies to my generation. I have been in the workforce for roughly five years, and under the current system, I would be eligible for benefits in a little less than 40 years, in 2041.
According to a study this month by Center for Economic and Policy Research (CEFR), a progressive think tank, the Social Security trustees report indicates that the program can cover all beneficiaries through 2042 without any changes, and even after 2042 the system would pay retirees a higher benefit (in today’s dollars) than what current retirees receive. The non-partisan Congressional Budget Office is even more confident, projecting that Social Security can pay all benefits through the year 2052 with no changes whatsoever. CEFR concludes, “By either measure, Social Security is more financially sound today than it has been throughout most of its 69-year history.”
If today’s young people still consider that an unacceptable risk, they need to realize that the Bush privatization plan clearly takes advantage of us. We would continue paying into a system that slowly would be phasing out, ensuring that the retirees before us receive their benefits. In return, we would be given our measly investment accounts, which would not nearly make up what we would have been guaranteed if Social Security remained in its present form. As the CEFR study notes:
“A worker who is age 35 can expect to see a cut in the guaranteed benefit of approximately 25 percent. A 15-year-old who is just entering the work force can expect a benefit cut of close to 40 percent. For a 15-year-old, this cut would mean a loss of close to $160,000 in Social Security benefits over the course of their retirement. Private accounts will allow workers to earn back only a small fraction of this amount. For example, a 15-year-old can expect to make back approximately $50,000 from the $160,000 cut with the earnings on a private account. If this worker retires when the market is in a slump, then it could make their loss even bigger.”
And even though our benefits will be far reduced, the money diverted to our individual accounts will put the overall program into debt, forcing the nation to borrow to cover the obligations to ongoing entitlement recipients. One of Bush’s senior economic advisors, Joshua Bolton, admits that the shortfall, which could exceed $2 trillion over 10 years, would likely “require additional borrowing,” at a time when we already have massive budget deficits. The effects of all of this debt, in the form of higher interest rates, inflation, and a weaker dollar, will inflict far worse long-term economic damage on my generation than anything the Social Security privatization advocates can dream up to scare us.
Social Security is a good program that needs to be protected, not destroyed. With decent fiscal management, today’s young people can realize the same level of retirement benefits as previous generations. We need to resist the temptation to fall for what sounds like a sweetheart deal, and we must always remember to read the fine print.
According to a press release we just received: The Donald W. Reynolds Campus of the Arkansas Sheriff’s Youth Ranches (The Ranch) located near Fort Smith was vandalized overnight Thursday. Items stolen during the break-in included all of the children’s saddles, food, tools and supplies from The Ranch’s carpentry shop and all equipment from its auto shop. An investigation is underway with the Crawford County Sheriff’s Office.
Next week a series of meetings on the use of technology to tackle global problems will be held in Little Rock by Club de Madrid — a coalition of more than 100 former democratic former presidents and prime ministers from around the world — and the P80 Group, a coalition of large public pension and sovereign wealth funds founded by Prince Charles to combat climate change. The conference will discuss deploying existing technologies to increase access to food, water, energy, clean environment, and medical care.
So fed up was young Edgar Welch of Salisbury, N.C., that Hillary Clinton was getting away with running a child-sex ring that he grabbed a couple of guns last Sunday, drove 360 miles to the Comet Ping Pong pizzeria in Washington, D.C., where Clinton was supposed to be holding the kids as sex slaves, and fired his AR-15 into the floor to clear the joint of pizza cravers and conduct his own investigation of the pedophilia syndicate of the former first lady, U.S. senator and secretary of state.
There is almost nothing real about "reality TV." All but the dullest viewers understand that the dramatic twists and turns on shows like "The Bachelor" or "Celebrity Apprentice" are scripted in advance. More or less like professional wrestling, Donald Trump's previous claim to fame.
One reason why the South remained solidly Democratic during the mid-20th century was the enduring gratitude to President Franklin D. Roosevelt, who brought electricity to the poor, rural parts of the region.
According to one historical account, “Althou