Social Security MadnessThe funny thing is that the US Social Security system is solvent. They upped the tax on workers in the 1980s to secure the future. But that has never satisfied the right.
Has the Washington Post gone mad? asks Dean Baker, reading the Post’s latest editorial on Social Security. The answer is no: it has been mad all along.
Dean points out, correctly, that the Post’s argument here is: “In the future, Social Security might have to cut benefits. To prevent these possible future benefit cuts, we must cut future benefits.”
But this isn’t new — the same argument was rolled out in 2005.
A lot of the Beltway establishment has a thing about Social Security — in a way, by the way, they don’t have a thing about Medicare, which is a vastly more important long-run problem. No matter how much you talk logic or numbers, they’re obsessed with the idea that Social Security must be cut; as I wrote back when, somewhere back in the 90s talking tough on Social Security became a badge of seriousness, and facts just can’t make a dent in that social convention.
Meanwhile, in Canada our system is doing quite well. The government hasn't fallen into the trap of the US, i.e. taking the tax income and putting it into the general budget while giving "IOUs" (bonds) to the administration of Social Security to handle the baby boom bulge. That will blow up because the US government doesn't have the cash to repay those bonds! But that is because the politicians have "played games". As far as the books are concerned: Social Security is fully funded.