Looks like Steny Hoyer and his buddies in the Blue Dog Dixiecrat Coalition are getting ready to implement the long-standing fever dream of their Cato Institute mentors and wage yet another war on Social Security. Time to break out the pitchforks!
The last time Social Security was under attack, its attackers claimed that privatizing it — that is, chopping it and its trillions-dollar trust fund into shreds and handing out the pieces to eager brokerage firms — would make it more efficient and provide more money to retirees. However, the disastrous experiences of Chile, the UK and other nations — not to mention the numbers in the last of the Bush plans to destroy Social Security — have shown the exact opposite: America’s evil-bureaucrat-run Social Security has overhead costs of less than 1%, whereas the Bush plan has ten times the overhead, the British plan has twenty times the overhead, and the retirees forced to live under the Chilean plan are seeing as much as a third of their retirement money eaten up by fees due to pension-fund owners more interested in turning a big profit than in providing for their elderly fellow Chileans.
But isn’t Social Security about to collapse? Um, no. Dean Baker explains:
Of course, the only reason anyone is even talking about cutting benefits and privatizing the program is that the right has managed to convince the public that Social Security is on its last legs. For more than two decades they have spread stories about the baby boomers bankrupting the system and multitrillion-dollar debts left to our children and grandchildren. In reality the program can pay all scheduled benefits long past the boomers’ retirement. According to the Social Security trustees report, it can pay full benefits through the year 2042 with no changes whatsoever. The nonpartisan Congressional Budget Office puts the date at 2052. And even after those dates, Social Security will always be able to pay a higher benefit (adjusted for inflation) than what retirees receive today. Those scary multitrillion-dollar debts translate into a deficit equal to 0.7 percent of future income–presented in very precise form in the Social Security trustees report for those who care to look.
Furthermore, as I have repeatedly explained, most recently a little over a month ago, it would take a decades-long Great Depression to make Social Security run out of money — and if the economy is that bad, frankly, Social Security would be the very least of our worries. Cannibalism would be a more acute problem. (Oh, and don’t get me started on how the people who are the Social Security Trustees are seriously cooking their numbers to get the doom-and-gloom stats the privatizers love.)
But isn’t Social Security this big ol’ drain on the budget? Um, again, no. In fact, it earns money most years, so much so that past administrations have used it to make their budgets look better. (This is a practice that President Obama, to his credit, might stop.) The deal is that its enemies are trying to get you to confuse it with Medicare, which really does need overhauling — though of course not the sort that the anti-Social-Security folks are typically proposing. (Oh, and in 2001 Bush wasn’t content to dip into the Social Security piggybank to mask the deficits he was running up; he used Medicare’s kitty — which back then was also running surpluses — this way as well.)
Bottom line: Leave Social Security alone. Period.