Support on Capitol Hill for saving Social Security must be stronger than I thought: Pete Peterson’s flying monkeys are working overtime dropping dungbombs on anyone who opposes gutting the government program that lifted elderly Americans out of the grinding poverty that was their standard fate before 1935.
On Wednesday we saw the New York Times’ David “Mr. Peterson’s a great guy, really” Leonhardt favorably citing a WaPo piece by Robert Pozen that was a half-baked Sachertorte of anti-Social-Security myths, all of which CEPR’s Dean Baker had effortlessly punctured when Pozen had circulated them via the Boston Globe back in December. Friday, we see Charles Blahous, co-author of a “kill it to save it” report on Social Security that was (surprise!) funded in part by Pete Peterson, telling Americans yet again that anyone who defends Social Security from Peterson stooges like him is actually hurting America:
Predictions in politics are dangerous, but I make one here for the record: If Social Security repairs are delayed several more years, then within one generation from now we will witness the end of Social Security as we have long known it. The irony would be that the program was done in by its supposed defenders.
Will all due respect, Mr. Peterson Shill, you are spewing used food. Once again, CEPR’s Dean Baker comes to the rescue, explaining what Blahous won’t tell you:
Politicians routinely make similarly absurd statements about Social Security, implying that the program and the country are about to go broke. Of course both claims are obviously untrue. According to the Social Security trustees, the program can pay all scheduled benefits for the next 26 years with no changes whatsoever and even after that date can always pay close to 80 percent of scheduled benefits. Instead of our children being broke, average wages are projected to be more than 40 percent higher in 2040 than they are today.
That’s also assuming the Trustees’ typical low-balled growth rates of 1.9% forever and ever — in other words, a never-ending Great Depression — actually pan out, which is highly unlikely. As Irwin Kellner stated back in 2005, during the height of the Bush Administration phase of Pete Peterson’s war on Social Security:
Ten years ago, the system’s actuaries thought the trust fund would be depleted by 2029. Five years ago they thought it would be 2032. Now the date when the surplus is expected to be gone is 2042 — and the Congressional Budget Office thinks it could be 2052.
The reason for these changing projections? More money coming in than previously expected.
This alone should signal policymakers that major surgery may not be needed. But when you look at the assumptions underlying these projections, you have to be even more cautious.
The actuaries assume that the U.S. economy will grow by an annual rate of 1.9 percent per year over the next 75 years. This is far below the 3.6 percent average of the past 75 years — a period that includes the Great Depression.
The system’s actuaries have a somewhat more optimistic projection. It assumes, among other things, a slightly faster rate of growth of 2.7 percent per year over the same period.
While this, too, is below the economy’s 75-year average, it shows that the system never runs out of money. That’s right, never.
That’s right, folks: so long as the economy even does mediocre growth over the long term, Social Security is in fine shape. In other words, the only thing truly imperiling it are the Pete Peterson pillocks who want to pillage it and put us all on cat food.