Reply #6: Social Security's "problems" [View All]

[Hannah Bell]

<<While fixing Social Security's problems, reform must be careful to preserve what works.>>

The statement takes for granted that SS has "problems". On what is this assumption based?

Why, on the 75-year projections of the SS Trustees, first mandated in the bi-partisan, Greenspan-led Reagan-era (1982) "fix" that jacked up SS taxes
above what was needed to fund current retirees.

The extra collections produced 25+ years of ever-increasing surpluses, surpluses that were borrowed into the general fund (as mandated by 1936 law, all excess SS collections must be borrowed by the gen fund in exchange for securities).

The super-rich, during the same time, received several rounds of tax cuts.

The Trustees' reports in fairly short order began predicting future crisis.

How accurate have the reports been? Stunningly inaccurate. The date of the impending crisis has been steadily pushed into the future, keeping it always impending, but just about the same distance away.

Not only that. The Trustees make 3 projections. The intermediate projection is the one used in the media. This is where the estimates of projected shortfalls come from.

But reality has, on average over the last ten years, not only come in better than the intermediate projection, it's come in better than the so-called OPTIMISTIC projection, and in that projection, SS keeps chugging along paying out scheduled benefits & running a SURPLUS, with NO tax hikes, no benefit cuts, & no private or "extra" accounts.

One wonders why this story is never told, though it's hidden in plain sight if you study the Trustee's reports.