Over at Angry Bear, that great defender of Social Security, Bruce Webb, has declared that he is taking a vacation until next spring because Social Security is safe for now? Is he right? The obvious answer would seem to be "yes," with the most recent financial crises seriously undermining the argument for privatization that Republicans have pushed so relentlessly, including both President Bush and candidate John McCain, whose plan has not been well defined, anymore than was Bush's was back in 2005, when he made his big failed push.
Of course, this leaves the question of what Obama might do, with a Dem more in the position to actually do something to Social Security. I used to worry that Hillary would get in and follow her husband's former desire to "reform" SS. However, it seems that Obama's position has improved. I, like Bruce Webb, am a hardliner that nothing needs to be done, disagreeing even with Dean Baker, who says nothing needs to be done, but who buys into CBO projections that say the system will be "bankrupt" in the late 2040s. Bruce and I are skeptical. Obama has proposed putting a fica tax on wage earners above $250,000 per year income, but more recently has said this should be done only "if necessary," thus putting it off. This is an improvement.
Actually, at this point, I agree with Paul Begala. Given the financial crises and McCain's incoherent pro-privatization position, I think Obama should use the issue and hit hard on McCain over it. Heck, time to play for Florida for real.
Obama has proposed putting a fica tax on wage earners above $250,000 per year income, but more recently has said this should be done only "if necessary," thus putting it off. This is an improvement.
ReplyDeleteWould you support a revenue-netural shift in fica taxes upwards from low-wage earners to higher-wage earners? The intention is to make the system more durable by spreading the costs over a broader base and better matching the ability to pay with the responsibility to pay.
Well, if that were to be done, I would prefer that benefits also be altered as well, the lack of doing so being a potential problem with the Obama solution, although a pretty minor one. Part of the political logic of the current system is that there is this appearance, not totally unreal, of a link between what people pay in and what they receive, thus saving it from being perceived as a "welfare program" where the well-off pay for the ("undeserving") poor.
ReplyDeleteof course it's not safe. there has never been a connection between reason and the assault on Social Security. they don't need to privatize it directly; they can just weaken it by cutting benefits or raising the retirement age so that it no longer performs the function it was designed for... allowing working people a chance to retire before they are turned over to the great American last days health care system.
ReplyDeletemeanwhile, raising the cap or therwise jiggering the formula just turns Soc Sec into welfare... which is bad for the workers. Welfare is fine in an emergency, it is not the way you want to run a normal part of the economy (retirement).
but the whole discussion here depends on the fallacy that something needs to be done at all.
Social Security is not broke. It has nothing to do with the deficit. Moreover it can never be broke. As Rosser has pointed out, it can continue at the same tax rate paying benefits that have a higher real value than todays benefits. Or, if the Trustees are right, a 2% increase in the tax would allow benefits with the same replacement rate as todays to be paid essentially forever.
and here i get a little frustrated because everyone has a cute way to balance the books without understanding "the problem"... expecially the real problem which is to provide retirement insurance for workers paid for by workers. But if they understood that, they would understand there is no problem. And if the people understood that, there would never be a problem.