Wondering if the Social Security issue is really a crisis?

Check out what some of these mainstream sources have to say about it:

New York Times (free registration required)
"Prudence dictates taking steps now to minimize the possible shortfall. This could include raising the cap, some modest cuts and tax increases and a gradual redeployment of the trust fund into assets that may not be tapped, willy-nilly, for whatever legislative purpose. But only a real crisis would dictate undoing an institution that has provided a safety net for retirees, that has helped to preserve in the social fabric some minimum of shared responsibility and that has been supported by workers in good faith. And, in looking at Social Security today, the crisis is yet to be found. "

Time Magazine
'At another appearance intended to promote federal standards for testing high school students, Bush went off script to warn a group of teenagers, "The system will be bankrupt by the year 2040."

That sounds pretty scary—except that it's not true. What will actually happen in 2018, according to the Social Security trustees who oversee the program, is that the money paid out in benefits will begin to exceed the amount collected in taxes. And since Social Security will run a surplus until then (and has been running one for some time), it has billions available that it can tap to fill the gap. Even under conservative estimates, the system as it stands will have enough money to pay all its promised benefits until 2042 and most of its obligations for decades after.'

Comments

[Mike]

I can remember not too long ago, maybe four years ago, when the democrats where crying that Social Security Trust Fund will be out of money if the current system is left in place. Do you remember the who "Lock Box" quotes? Now that the Bush administration is attempting to do something about it the Democrats, and the liberal media, start crying that there is nothing wrong with Social Security. What really is going on here is that the Democratic Party does not what the problem solved because they need this as an issue. If the Social Security System is healthy, it is one less talking point for the next election cycle. Say nothing about the fact that they would never allow a Republican administration take the credit for saving the largest entitlement program in the country

[Mike D]

There's a rather large difference between saying the system is about to go bankrupt (a lie) and saying the system needs to be fixed over time (which is true.) Bush is using exactly the same kind of scare tactics he used before we invaded Iraq, an "imminent threat" with "weapons of mass destruction." This time, the press is actually digging into the story, rather than taking everything Bush says at face value. If that's your definiton of liberal, than I proudly defend it. That's EXACTLY what a free press should be doing.

[Scott S]

The faulty analysis in the 'move along now, nothing to see here, there is a surplus' argument is that the money wasn't just sitting around; like every other time politicans get their hands on other people's money, it was spent. So yes, when SS stops taking in more than it requires, the billions that have already been allocated elsewhere will have to be reshuffled. And our taxes will have to increase to cover where they used to go.

It's sad that people put such blind faith into government programs, they are willing to excuse what normally would cause an outrage. The idea that people should have 12% of their wage taken away from them, so that they can get maybe a 2% return on their forced 'investment' when they retire is horrible. Let people keep the money they EARN (that's a foreign concept to politicans), to save how they wish - the stock market historically has 4x better rate of return, even including the lows.
But I know, people can't be trusted to save their own money for their own retirement, so let's take everyone's money and have an agency know for its fiscal responsibility dole out meager funds.

And as the first comment pointed out, the Democrats thought that SS should be dealt with, until the Republicans got into power. Now it's a non-issue.

[akaky]

I have to agree with Scott here. It's amazing how this suddenly became not such a big problem when the Democrats lost the White House. The problem is that even a complete innumerate like myself can figure out that lots of retirees plus a smaller work force to support those retirees means that something's got to give somewhere at some time, and that that time will be the worst possible time for millions of people. I get the distinct impression that the Democrats are in the same position as the bartender on the Titanic who told the passengers not to worry, that the ship had stopped for some ice for Mr Astor's martinis.

[Luke]

The problem with the argument that we can get a better rate of return if we all invest our money is that all we will be investing in paper stocks the prices of which are being driven higher by the speculators and not by sound strategies implemented by overpaid CEO's.
The real goal of Bush et al. is to gut the few welfare programs left and eliminate regulation of the corporations that support him among other things.
Americans are in for a rude awakening in a few years. We better stock up on Maalox and Asprin for the monstrous headache we are going to have after this party.
Me, I am investing in catfood companies, because that's what is going to be on the menu for a lot of retired people in the next few years.

[maged taman]

Americans' Future In One Plan
I know that most of you are busy to read my book. As I explained previously that Taman Health Plan (www.trafford.com) takes care of all the health care, Medicare, Medicaid and social security. It will threw away all bureaucracies out of window. Let me explain shortly how it works:
1- there will be no more health care insurance companies, no Medicare, Medicaid or Social Security. My plan will take care of all.
2- Basically will be only one Big Health care organization (Taman Health Plan or THP).
3- The center of the plan will be in Washington while the health departments in every state will be the branches.
4- One organized body will be taking care of the Health Care and long term care of all Americans replacing 1500 insurance companies, Medicare, Medicaid and Social Security.
5- This will allow us to provide a uniform service to all Americans every where in both inpatients, outpatients and long term care.
6- When you go to any Duncan Donuts branch your expectation is to have a fresh coffee and a donut with no long wait. We will try to provide a similar predictable service everywhere as Duncan Donuts. With having only one body will be able to do that.
7- The Capital of the plan will be the funds of Medicare and Social Security (before the bankruptcy of both systems). The maintenance will be a yearly tax from each of us (will replace our yearly social security and Medicare holding taxes). A percent of each of us go to his account cards and a percent go to THP itself. The money of the plan will be invested by the investing sector of the plan very likely in Wall Street.
8- We will have 5 ATM cards with a corresponding accounts. Card A (children), Card B (working group 18-65years old), Card C (Medicare card >65 years old), Card D (Medicaid card), Card E ( expensive medicines or investigations).We will have the health cards devoted to health care and long term care. Thus we will have: health cards, banks with accounts to each card and credit card machines in outpatients care and hotelling part of hospitals and nursing homes.
9- Cards will pay for the outpatient medical care including doctors, emergency room visits, investigations, medical supplies, pharmacies and the hotelling part of hospitals and nursing homes. While the medical part of hospitals and nursing homes will be budget by the plan itself.
10- In the first year of issuing cards: Card B and C (most of people) will have a bonus it could be a percent of their Medicare and social security withholding (70 % or so). We will try to be fair to every one but every one has to now that most of us already lost a lot of money with the HMO's. For next year new comers to card B at age of 18 when first issued will have a bonus of 50,000 dollars. It will change every year by a percent a according to inflation.
11- every one of us will get a statement every one or two months of his card account. Card B account will phase in card C at the age of 65. If card C account is vanished Card D will be issued (hoteling part will be less luxurious). Only few of Card B will have card D if there account vanish most likely those with severe medical problems.
12- So basically most of us will have our own account Card B then card C. Say you are 45 and you have now in your account $ 200,000 you can take one or more years out of work, you Can retire early if you like and with your card you will control all the medical services and its prices.
13- With this card system we will end all bureaucracies of health care, Medicare and Medicaid. No one will stand between you and any medical or long term service (only your card). Shop around with you card, have early health care security and responsibility and invest in your health.
14- We will not need Social Security since after age of 65 we will be able to use our cards to stay in any nursing home each according to his account in card C or card D. So when you invest well in your health you will be able to enjoy a nicer nursing home when you get old (actually it will be also a kind of tourism).
15- The money in cards do not get inherited when we pass away but recycle in the plan to support the next generations.
16- The plan will have very positive effects not only in simplifying our care, save a lot of waste in health care, give early health care security and responsibility to Americans it will also have a positive effect on the economy, saving billions of dollars to Americans, creating jobs in health care and cutting outsourcing.
Very likely, you figure it out by now I could have sold the plan to one of the presidential candidates before the 2004 election for millions of dollars (they already spent 2 billion dollars). It is my gift to the American people (it will help the healing process of the two worlds America and the Muslim/Arabs).
Maged Taman.