Social Security debate (again): Whats to be done?

Myself, I’m still undecided on the whole Social Security issue, though I’ll be honest and say I’m leaning more towards the idea of an individual accounts CHOICE than…well, whatever the Democrats aren’t currently proposing (or than ‘lets just keep the status quo and see what happens’). Perhaps I’m wrong though and the Democrats really DO have a plan…if so, here is the place to put it. If they don’t, then perhaps some Dem dopers would like to propose something on what can be done about the Social Security system.

From reading on today it seems that there is a blitz of misinformation streaming out of the Dems these days about the whole issue. There are actually 2 separate articles there discussing Dem misinformation…and to my mind this one is a wopper, as multiple Senators appearently are using the calculator discussed in the article to ‘prove’ their point.

I found this especially disturbing:

Obviously if you calculate future benifits at a 3% return (instead of 5, 6, or more depending on who’s projection you believe), and then compare it to the current system (which is not supportable past the 2040’s if memory serves) then you are going to get your ‘50%’ cut in benifits. But…well, if you have to use this kind of misinformation, doesn’t that kind of say something in itself? I mean…if the Republican plan (such as it is…I STILL haven’t heard Bush et al actually nail down exactly what they are going to do, though I might have missed it…I’ve been out of the country for quite a while and only recently back where I have internet access) is REALLY that bad, why do they need to use this kind of misinformation to demonize it?

Anyway, what I’d like to come away from this thread with is an idea of what can be done (if anything) to ‘save’ the Social Security system. Whats the ‘best’ plan…what should be done? What is the ‘best’ plan coming from your party of choice? What do you see as wrong with said plan coming from the opposition parties (which ever they may be to you)?


The Democrats don’t need a plan, because Social Security doesn’t need fixing.
Simply overturning the tax cuts Bush pushed through in his first term will keep the system solvent for the forseeable future.
To paraphrase the arguably partisan, but factually correct Josh Marshall, the only problem with social security lies in the presidents runaway spending.

In the spirit of fairness, here is a good debunk of a pro-Bush group exaggerating the current state of SS:

In a new TV ad, Progress for America exaggerates the true state of Social Security’s finances by comparing it to the Titanic. The ad claims the system will go “bankrupt” if nothing is done and that we must rescue the program “before it hits the iceberg.” Actually, neutral experts predict the system can pay between 70 and 80 percent of currently scheduled benefits even if the Trust Fund is exhausted, which isn’t predicted to happen for another 37 years, at least.

The ad also touts Bush’s plan for “voluntary personal retirement accounts” as though that would improve the system’s finances. But even the White House now acknowledges that individual accounts alone do nothing to fix the system’s long-term financial shortfall.


Its so easy to mislead people (and even politicians) with statistics.


Can you back any of that up as a long term solution? Because frankly it smacks of denial to me. Social Security has been in trouble for a long time…or the knowledge that it WILL be in trouble has been out there for a long time. Long before Bush and his cuts. I’m reading through another article on that seems to say that even raising taxes higher than the dreaded Bush tax cuts won’t save the system long term.

So…can you back up that the system really is solid, and that it was just Bush’s tax cuts that are causing the problem. In addition, can you back up your assertion that simply restoring the tax system to pre-Bush cut is enough to fix things long term (or even short term)?


Yes, but I’m at work right now, so it will take me a little while before I can get back to the board.


The president hasn’t laid out a specific plan, really. His approach seems to be simply trying to identify the problem and raise general awareness of it. He has said some specific things he is not willing to consider such as raising the payroll tax. He also has said some specific things he does want to do, like provide private investment accounts. However, all other reasonable options are on the table.

There are drawbacks to Bush’s approach. The Democrats aren’t hesitating to tear into Bush’s “plan” as your OP points out. Their attacks are without merit, of course, if for no other reason than there is no plan to attack yet. Also, Bush looks sort of indecisive right now, and appears to be losing traction on this issue.

However, if Bush did come out from the begining with a specific plan for social security than it would just give his opponents more ammunition to use against him. Whatever final solution Bush does come up with, there will be some negative element to it that can be attacked. By painting with broad brush strokes, Bush is outmanuvering his opponents in some sense. It’s clear to anyone now that the Democratic leadership and the AARP and others are opposed to any change in Social Security. They don’t care what plan Bush comes up with.

Social Security is a flawed program that was set up incorrectly from the begining. There should always have been private accounts. The program is regressive. It is expensive for the taxpayers and provides a horrible rate of return. This is going to keep getting worse not better. Its a bad investment that no one would choose to make in a free market. Workers have no control over their Social Security money. If they die, the contributions cannot be passed on to their family.

Most younger workers do want private accounts. Most poeple correctly realize that Social Security is a failing system that’s headed for bankruptcy. Eventually, we will get a privatized account system in place. I just hope it happens sooner rather than later before the cost is more than we all can bear.

Bush didn’t cut the payroll taxes that are supposed to be funding social security. The system shouldn’t need infusions of cash outside of payroll taxes to keep it from collapsing. That tax rates have any effect on social security at all is a failing of the existing system.

With private accounts the rate of other taxes isn’t a factor at all. Those that opt in to the new system would see their money grow through the financial miracle of compounding interest and would retire with huge nesteggs that they have direct control of.

No worries. Just for drill I’ll post what I was talking about so you can read through it at your leasure:

Yet another article (I’m just reviewing all I missed in the past 4 months and catching up on one of my favorite sites)

So, even with a tax increase on the top 6% earners AND a cut in one of the benifits the long term viability of SS seems in doubt. And there is more to his plan:

This includes an across the board tax increase in 35 years…and it STILL won’t ‘fix’ the system, just extend out the time before it goes tits up.

So, in 2004 he came up with a more radical system:

I won’t post the whole thing here…just their analysis of the results.

They go on with what they consider a ‘A Permanent Fix’, but I’ll let you check that out if you like. Reguardless, I think that this all adds up to requiring some fairly radical measures both on increasing taxes AND decreasing benifits to some group if the system is to be viable. Certainly I have doubts that just bringing reversing the Bush tax cuts would do much of anything to make the system viable long term. I’ll await your cites later though and go from there.


Obviously my last post was directed at yanceylebeef, not Debaser. :slight_smile:


Remove the cap. Otherwise, not much.

Wouldn’t that make the system something other than what it was originally intended? I know that ‘soak the rich’ is like the motto of the majority on this board, but removing the cap would change the very nature of Social Security. Putting aside the unfairness of it (another thing you could do if you were like minded is simply cut or eliminate SS benifits completely to anyone making above some arbitrary X income level or have Y in assets), do you think it would be a good idea to essentially make SS another welfare program?


I respectfully disagree. Consider the following.

In 2008 the first of the baby boomers start to retire. That means no more contributions to the system from those guys, and they begin to draw their benefits. Ouch!

We are headed for a system with two workers for every retiree. Can’t sustain that for long. Something has to give.

Bush destroyed the economy. This has to be true because I’ve heard it so often the last few years.

Maybe that last point should be the start for a new thread. But I can’t tell you how many times I’ve had the following dialogue:

Leftist: Bush destroyed the economy. There’s no jobs left, just a couple of McJobs that pay $1.79 an hour. Everything has been outsourced. The deficit will kill us. Everyone will be bankrupt within the hour.
Plan B: How about Social Security?
Leftist: No problem, it’s guaranteed for at least 60 years.

Maybe someone who believes that Bush destroyed the economy and that SS is stable could explain to me how that works.

Removing the cap would be a great way to pay for the transition costs to a private account system. To simply remove the cap without changing the existing system would waste the best card in our hand. It would prolong the life of Social Security but not fix any of the underlying problems with the flawed system.

Also there is the simply unfairness issue. If you remove the cap are you also going to increase the payments for those who contribute huge amounts on their high incomes? Or are you just going to raise more revenue into the system and not ever pay those people back? If so, that’s unfair to them.

As xtisme points out this would essentially make the program another kind of welfare. Public support for it would erode.

The problem is not that SS didn’t take in enough to cover future retirees; for years there were something like 17 workers for each retiree, which created an enormous surplus. The problem was, Congress and the White House couldn’t keep their hands off, so now the SS till is full of IOU’s. The problem is, no President or Congress wants to be responsible for paying back those IOU’s which would mean massive tax increases, so they have declared that there is a “crisis”, and proposed the private accounts as a way to avoid paying back the money they borrowed. The solution to the SS dilemma is to pay back the surplus by raising taxes that should never have been cut it the first place. Any other solution merely shifts responsibility from the wealthy (who benefited most by the IOU’s in the first place, and the subsequent tax cuts) to the middle class and poor. But Republican politicians, while big on “accountability” for others, rarely prescribe it for themselves. Pity.

I’m smack in the middle of the Baby Boom generation, and I’m expecting to retire around 2023. A few years past 65, but only a few.

(a) It’ll probably be a bit higher than 2, since the Trustees project that immigration will drop off considerably before too long. That finding is controversial, to say the least. (b) What has to ‘give’ is productivity. And it has been giving, and will apparently continue to be the gift that keeps on giving.

If we’d gone from 17 workers per retiree to 3 workers per retiree while staying at 1937 productivity levels, we’d have long since been up a creek. We’re not.

Strawman much?

Of course, it’s quite possible that he might still do that. Given that a hiccup from South Korea earlier this year briefly sent the dollar tumbling, think of what would happen if we pissed off China. (I’d sleep better if I believed that people in the Administration were thinking about that. But I digress.)

Hey, we can’t help it if you spend a lot of your time talking to airheads.

But there’s actually a point there. There’s a lot of choices that matter if and only if we keep our nation on a sound footing. If our economy goes into total meltdown, it won’t matter if we privatize Social Security, or stay with the existing system. If we treat our budget deficits as unfixable and the Bush tax cuts as un-undoable, then stuffing money into the Trust Fund faster than we’re already doing has no point, because we’ll be borrowing the SocSec surplus - of whatever size, for however long - and not paying it back, so there’s no sense in trying to prepay any of this.

What’s this about removing the cap being unfair? That comes from the same crowd who demands flat tax rates across the board in the name of that selfsame fairness. A cap removal would put that into place. Why not start with SS as an example and see how it goes? Or is that position just the old “Tax somebody else, not me” one?

The SS tax is heavily regressive as it is. Removing the cap would make it less regressive, but still regressive. There should be no objection to that.

As opposed to a corporate welfare program, where taxation = govt.-mandated investment in stocks? I’m not in favor of making the poorest Americans line the pockets of another Ken Lay.

Reducing benefits to the richest, who don’t really need it anyway, is a fine alternative to removing the cap, if that would make people happier.

The Social Security System is not inherently flawed. Those that say that are just against the principle of SS, so they make up excuses on why it should be changed. The money that goes into SS equals the money that comes out of SS, minus administrative costs. Some individuals pay more than they get out, such as the rich, and those who die early. Some individuals get back more than they put it, such as the poor, those who live long lives, widows, and the disabled. I can’t remember the exact figure, but only about two thirds of SS money is used to pay retirement benefits. If SS were a totally privatized system, the taxpayers would still have to come up with one third of what SS collects to cover the non-retirement benefits that have to be paid out.

The baby boom generation is just a hump we have to get over. These guys aren’t going to live forever. When they start dropping off, the ratio of retirees to workers will get better.

The biggest problem that SS has is that it is owed trillions of dollars by the U.S. Government. SS is going to eventually need that money, and when it does, the U.S. Government probably will be unable to pay. It isn’t a flaw with the SS system itself, but a bad choice of who the money got lent to.

Same problem. Means testing just makes the program more like another form of welfare.

What is the “principle” of SS that we are against exactly?