The argument over whether or not we can afford Social Security is becoming unanchored from reality. The cited deficits are imaginary under almost any real world scenario.
From Dean Baker over at the Center for Economic and Policy Research, some common sense arithmetic.
“The projected shortfall in 2033 is $623 billion, according to the trustees’ latest report. It reaches $1 trillion in 2045 and nearly $7 trillion in 2086, the end of a 75-year period used by Social Security’s number crunchers because it covers the retirement years of just about everyone working today.”
To make sense of these numbers it would be necessary to know how large the economy is projected to be in 2033, 2045, and 2086. GDP in these years is projected to be approximately $41 trillion, $72 trillion, and $440 trillion. Providing these GDP numbers would have allowed readers to put these projected deficit figures in some context.
If the Globe was interested in conveying information instead of pushing its agenda for cutting benefits it might have told readers that the tax increase needed to keep the system fully funded over its 75-year planning horizon is just over 5 percent of projected wage growth for the next 30 years. (This is using the Social Security trustees projections. It would be less than 4 percent of projected wage growth using the projections from the Congressional Budget Office.)
While many readers would point out that most workers have not been seeing wage growth in recent decades, that complaint would highlight the absurdity of the Globe’s piece. The upward redistribution of income over the last three decades has done far more to hurt the living standards of ordinary workers than any possible tax increases associated with Social Security.
Beezer here. Just another negative effect of the income inequality trend of the past 30 plus years. So let’s give Mitt another tax break, shall we? Why can’t we have a better press corps?