In Sunday’s Post Jonathan Weisman has a piece on whether or not there’s a Social Security ‘crisis’.
And look at the lead graf<$NoAd$> …
In just 14 years, the nation’s Social Security system is projected to reach a day of reckoning: Retiree benefits will exceed payroll tax receipts, and to pay its bills the system will have to begin redeeming billions of dollars in special Treasury bonds that have piled up in its trust fund. To redeem those bonds, which represent money taken in years when Social Security ran a surplus and used for other government operations, the federal government would likely have to cut other programs, raise taxes or borrow more money.
It’s not like he’s prejudging the question or anything, right?
A ‘day of reckoning’?
Where to start? In addition to adopting rather dramatic language that reads like it comes right out of the privatization playbook, just what does 2018 represent?
The first thing worth noting is that there’s nothing unexpected about this. Indeed, it is part of the plan under which Social Security’s financing was restructured in the early 1980s. Payroll taxes were intentionally raised substantially over and above current needs so as to build a ‘trust fund’ that could be drawn down when the surge of baby-boomer retirements began early in the 21st century. In essence, babyboomers were asked to overpay into the system to create a reserve to cushion the stresses that would be created when their oversized generation retired.
Coming to that date isn’t any more of a ‘day of reckoning’ than it is when you get out of college and have to start paying your loans back.
Indeed, it’s less dramatic since the date represents a tipping point. It’s not as though anything will happen dramatically in a fiscal sense at that one moment.
The fiscal stresses created by the retirement of the baby-boom generation will build slowly over-time as the generational cohort moves through retirement.
Needless to say, none of this means that some funding tinkering won’t be necessary in the system down the road. And Weisman’s article covers many of the issues I’ve discussed further down into the piece. But in writing an article that poses the question of whether or not there’s a ‘crisis’ it probably makes sense not to start with loaded terms and phrases that prejudge the question in the affirmative.
