Tuesday, April 24, 2012

Fixing Social Security—It’s easy


The trustees of the Social Security system announced yesterday that the trust fund will be exhausted in 2033, three years earlier than previously estimated.  At that point, the system will only be able to pay out 75% of the benefits promised.  Sounds pretty bad.  Right?  Not really.  The truth is there are many ways to fix Social Security without privatizing or totally dismantling it as the Republicans want to do.

The Congressional Budget Office (CBO) last year estimated that the Social Security shortfall would amount to about 0.6% of GDP.  CBO produced a table showing the various options that have been discussed for fixing the shortfall with an estimate of their impact.  As Kevin Drum pointed out in a Mother Jones article last year, fixing Social Security simply involves picking among the various options that add up to 0.6% or more.  Given the new estimate of the shortfall, we might want to look for 0.8% or more but even that would be pretty easy.  Take a look at the chart below or in Drum’s article here: http://motherjones.com/kevin-drum/2011/09/some-gutsy-talk-social-security  We can fix Social Security with a few simple changes that can be implemented so slowly very few will see any real change.











So, if we want to fix Social Security, why doesn’t Congress just pick a few of these options and get on with it.  Well, that’s what the Democrats would like to do.  However, the Republicans are blocking all of these easy options hoping that they can scare Americans into abandoning the whole idea of Social Security for private accounts or nothing at all. 

Read the full Congressional Budget Office Report on Social Security here:













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