1/15/2005

Behold: An accurate story from MSNBC on the Social Security issue

An excerpt from the story by MSNBC's chief economic analyst:
This time around, Social Security is years away from anything that honestly could be described as a financial crisis. But that has not stopped President Bush from trying to whip up enthusiasm for his proposed personal retirement accounts by warning of an imminent disaster.
“If you're 20 years old, in your mid-20s, and you're beginning to work, I want you to think about a Social Security system that will be flat bust, bankrupt, unless the United States Congress has got the willingness to act now,” he said Tuesday at a forum on Social Security. The stark choice of words was hardly a slip of the tongue – Bush used the word “bankrupt” five times in the 45-minute session. He also warned of a potentially “bankrupt” system in a radio address last month, referring to demographic changes that signal a “looming danger...In the year 2018, for the first time ever, Social Security will pay out more in benefits than the government collects in payroll taxes,” Bush said.
That is just plain wrong. In 14 of the past 47 years, including 1975 to 1983, Social Security paid out more in benefits than the government collected in payroll, with the gap reaching $10 billion in 1983. So the projected “crossover” point in 2018  is a relatively meaningless milestone, say opponents of Bush’s privatization plans, even as they acknowledge the system faces long-term problems.
Bush’s statements “appear designed to further a widespread perception, especially among younger people, that Social Security will entirely collapse and that there will be nothing for them when they retire,” said Bob Greenstein, executive director of the Center on Budget and Policy Priorities.
The White House press office did not return phone calls seeking an explanation.
The emphasis on 2018 by Bush and other officials relies on “either an implication or very often an explicit statement” that the Social Security trust funds have no real assets, Greenstein said. Try telling that to the Social Security trustees, including Treasury Secretary John Snow, who offer a detailed list of government securities they hold, paying up to 9.25 percent interest and totaling more than $1.6 trillion.

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