{"id":996,"date":"2010-03-27T02:10:40","date_gmt":"2010-03-27T09:10:40","guid":{"rendered":"http:\/\/www.politicsplus.org\/blog\/?p=996"},"modified":"2010-03-27T02:10:40","modified_gmt":"2010-03-27T09:10:40","slug":"is-social-security-the-gops-next-target","status":"publish","type":"post","link":"https:\/\/www.politicsplus.org\/blog\/2010\/03\/27\/is-social-security-the-gops-next-target\/","title":{"rendered":"Is Social Security the GOP’s Next Target?"},"content":{"rendered":"

Alan Greenspan has his eyes on the Social Security benefits for which you have paid all your lives.<\/font><\/p>\n

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\"greenspan\"<\/a> Like every other major institution in the public and private sectors, Social Security has taken a few licks from the current recession. But the problems are simply not very serious — the entitlement program’s trust fund currently stands at a massive $2.5 trillion — that’s trillion with a "t." If the federal government makes absolutely no changes to Social Security whatsoever, the program is currently projected to remain fiscally fit through 2037. The effects of the recession are included in that projection — prior to the financial crash of 2008, Social Security was projected to remain solvent through 2041.<\/font><\/p>\n

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But pesky facts like that are not the focus of the story from Times<\/span> reporter Mary Williams Walsh, who instead highlights a fundamentally meaningless statistic to needlessly frighten her readers:<\/font><\/p>\n

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016.<\/font><\/p>\n

That threshold would indeed be important — if Social Security weren’t sitting on an additional $2.5 trillion<\/strong>. Walsh dismisses the trust fund — putting the term in scare quotes and calling it a mere "accounting device." And, in fact, the trust fund is<\/span> an accounting device — just like bank reserves and dozens of other financial metrics used in the business world. What that accounting device shows is that Social Security is fundamentally stable from a fiscal standpoint, to the tune of $2.5 trillion. There’s nothing fishy about it.<\/font><\/p>\n

 <\/font><\/p>\n

If that $2.5 trillion ever runs out — which it won’t, because Social Security’s revenues will increase in a few years as the economy recovers<\/strong> — policymakers would still actually have plenty of options available for boosting the program. But according to former Federal Reserve Chairman Alan Greenspan, there’s only one truly viable course of action — draconian benefit cuts for seniors. Here’s the Maestro, from Walsh’s article:<\/font><\/p>\n

When the level of the trust fund gets to zero, you have to cut benefits . . . . Because of the size of the contraction in economic activity, unless we get an immediate and sharp recovery, the revenues of the trust fund will be tracking lower for a number of years.<\/font><\/p>\n

\"Wealth<\/a> Greenspan, lest anyone forget, is one of the people most responsible for moving Social Security’s solvency projections from 2041 to 2037. Our current recession was caused by rampant financial excesses that Greenspan actively refused to regulate and a housing bubble that he explicitly refused to act on. To the extent that today’s government finances are constrained, the two major culprits can both be laid at Greenspan’s feet — the bank bailouts that were deployed to clean up his mess, and the lost tax revenues from job losses and plunging home values.<\/strong> <\/font><\/p>\n

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So it should come as no surprise that Greenspan is simply wrong about even the hypothetical need for benefit cuts. If — under a wild, unthinkable set of economic circumstances — Social Security did one day find itself in a fiscal hole, the government could always simply increase Social Security taxes or tap revenues from other government programs. In fact, when Greenspan himself was part of a commission to fix Social Security in the early 1980s, that commission did not cut benefits — it raised taxes. Policymakers would not need to cut benefits — Greenspan simply prefers that they do, because he doesn’t like the idea that the government should be providing safety nets for the elderly<\/strong>.<\/font><\/p>\n

 <\/font><\/p>\n

That’s a perspective shared by Wall Street billionaires like Peter Peterson, who has pledged a massive fortune to spreading the message: Save the bankers and brokers first — everyone else, including seniors, is expendable<\/strong>… [emphasis added<\/em>]<\/font><\/p>\n<\/blockquote>\n

Inserted from <Alternet<\/a>><\/p>\n

Social security benefits have been a GOP target for years.  Every penny spent reimbursing seniors is a penny that can\u2019t spend on a millionaire.  But any solvency problems Social Security may have can be corrected with one simple fix.  Remove the salary cap.  The current rate and cap structure is a social security tax of 6.20% (matched by employer) of income up to $106,800.  The bankster with a $20 million bonus pays the exact same dollar amount as someone making $106,800.<\/font><\/p>\n

Consider the current distribution of wealth in the US.  The richest 20% have most of the pie.  The bottom 40% have that tiny sliver, only 0.2% od the total wealth.  The Social Security tax structure is regressive, because it disproportionately protects the income of the rich at the expense of the poor and middle classes.  That is the sole cause of the problem.  No other fix is acceptable.<\/font><\/p>\n","protected":false},"excerpt":{"rendered":"

Alan Greenspan has his eyes on the Social Security benefits for which you have paid all your lives. Like every other major institution in the public and private sectors, Social Security has taken a few licks from the current recession. But the problems are simply not very serious — the entitlement program’s trust fund currently […]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-996","post","type-post","status-publish","format-standard","hentry","category-politics","category-5-id","post-seq-1","post-parity-odd","meta-position-corners","fix"],"_links":{"self":[{"href":"https:\/\/www.politicsplus.org\/blog\/wp-json\/wp\/v2\/posts\/996","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.politicsplus.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.politicsplus.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.politicsplus.org\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.politicsplus.org\/blog\/wp-json\/wp\/v2\/comments?post=996"}],"version-history":[{"count":0,"href":"https:\/\/www.politicsplus.org\/blog\/wp-json\/wp\/v2\/posts\/996\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.politicsplus.org\/blog\/wp-json\/wp\/v2\/media?parent=996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.politicsplus.org\/blog\/wp-json\/wp\/v2\/categories?post=996"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.politicsplus.org\/blog\/wp-json\/wp\/v2\/tags?post=996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}