Editore"s Note
Tilting at Windmills

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May 30, 2007
By: Kevin Drum

BEATING A DEAD HORSE....At the end of a post where he freaks out over a preposterously inappropriate way of measuring the federal deficit, Andrew Sullivan says this:

I also noticed in my latest letter from the Social Security Administration that, as currently configured, I'll get 76 percent of what I'm due if and when I retire. My bet is that it will turn out to be less than half. The boomers are going to hog all of it for themselves.

Please. Just stop it. Assuming Wikipedia has his age right, Andrew will turn 65 in 2028. Even if we do absolutely nothing, CBO estimates that Social Security will pay out full benefits at least until 2053. Andrew will be 90 years old at that point. What's more, a very modest tax increase starting a decade from now combined with a very modest slowdown in benefit growth will keep the system solvent forever.

This is grade school arithmetic, and the basic data is available with no more than a few minutes of googling. Can we please knock off the scaremongering on this subject?

Kevin Drum 12:54 PM Permalink | Trackbacks | Comments (132)

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Comments

Sullivan may be scare-mongering, or maybe he's just passing on scare-mongering from the Social Security Administration, whose mailings are composed by Bush political appointees. Are they falsely telling people that they aren't going to get all of their benefits to advance privatization?

Posted by: Joe Buck on May 30, 2007 at 1:11 PM | PERMALINK

Can we please knock off the scaremongering on this subject?

Apparently not.

Posted by: rusrus on May 30, 2007 at 1:13 PM | PERMALINK

Not to be morbid or anything, but given that Sullivan's HIV+ it's somewhat doubtful whether he'll make it to retirement age at all.

Posted by: Peter on May 30, 2007 at 1:14 PM | PERMALINK

Why is Kevin referring to a 2004 CBO report, when we have updated information from the Social Security Administration itself?

Posted by: Al on May 30, 2007 at 1:14 PM | PERMALINK

Can we please just stop treating Andrew Sullivan as a credible commentator?

In how many ways does he have to prove he's a spoiled ninny before you just ignore him?

Just treat him as a neo-con joke.

And spare me the repetance story. He's just trying to be our jerk now.

Posted by: Samuel Knight on May 30, 2007 at 1:17 PM | PERMALINK

Al,

Assuming the CBO is taking its information from the CRS, its numbers are less likely to be tainted than executive branch reports which are subject to executive review/fiddling. I'm unaware of anyone in Congress who has the authority to mess with CSR reports. This doesn't make a difference for you, of course, since you're more interested in party than you are facts, figures, or ideology. Well, I can't attest to what is in your heart-of-hearts, but if you're words are any indication...

Posted by: Everblue Stater on May 30, 2007 at 1:18 PM | PERMALINK

Al,

Assuming the CBO is taking its information from the CRS, its numbers are less likely to be tainted than executive branch reports which are subject to executive review/fiddling. I'm unaware of anyone in Congress who has the authority to mess with CRS reports. This doesn't make a difference for you, of course, since you're more interested in party than you are facts, figures, or ideology. Well, I can't attest to what is in your heart-of-hearts, but if you're words are any indication...

Posted by: Everblue Stater on May 30, 2007 at 1:18 PM | PERMALINK

Sullivan also writes: "The boomers are going to hog all of it [Social Security] for themselves."

Is someone going to tell him that being born in 1963 makes him a Baby Boomer? What generation does he think he belongs to?

Posted by: Brock on May 30, 2007 at 1:19 PM | PERMALINK

The boomers are going to hog all of it for themselves.

It may be worth mentioning that, by some accounts, Andrew Sullivan is one of the boomers, coming at the very tail end (1963).

Posted by: RSA on May 30, 2007 at 1:20 PM | PERMALINK

Born in 1963, isn't Andy himself a boomer? Yet he complains about "the boomers" hogging his benefits.

Posted by: bobbo on May 30, 2007 at 1:20 PM | PERMALINK

brock, rsa, and bobbo, simultaneously thinking brilliant thoughts.

Posted by: bobbo on May 30, 2007 at 1:22 PM | PERMALINK

If Sullivan doesn't like the benefits that this country provides why doesn't he haul his diseased ass back to the island he came from?

Posted by: An Outhouse on May 30, 2007 at 1:22 PM | PERMALINK

Full benefits? Sure!
One tiny catch, though.

Your benefit will be paid in dollars that are worth a lot less than you expected.

It's always a lot easier for politicians to debase the monetary unit than cut benefits, hoping that beneficiaries don't notice that their COLAs seem to fall short of their real world price increases.

http://www.shadowstats.com/cgi-bin/sgs/data

Posted by: Elvis on May 30, 2007 at 1:22 PM | PERMALINK

Full benefits? Sure!
One tiny catch, though...

Your benefit will be paid in dollars that are worth a lot less than you expected.

It's always a lot easier for politicians to debase the monetary unit than cut benefits, hoping that beneficiaries don't notice that their COLAs seem to fall short of their real world price increases.

http://www.shadowstats.com/cgi-bin/sgs/data

Posted by: SoundasaDollar on May 30, 2007 at 1:23 PM | PERMALINK

Why would you stop lieing and posturing if you are trying to scare people into dismantling social security?

Posted by: notthere on May 30, 2007 at 1:24 PM | PERMALINK

We need to throw it all in the stock market, it's the only solution!

C'mon, Home Depot!

Posted by: Ringo on May 30, 2007 at 1:24 PM | PERMALINK

An Outhouse beat me to it. Sully can simply go back to the UK if he is unhappy. Hell, as a Brit he shouldn't get SS benefits anyway.

Posted by: bubba on May 30, 2007 at 1:24 PM | PERMALINK

Can we please knock off the scaremongering on this subject?

Scaremongering is all the right-wing has to offer on any subject. Sullivan may be one of those who think that it's OK for people like Bush to spend all of the SS surplus that has been accumulating the last 20+ years (and the next 10 or so), and just to decide not to pay it back when it comes due. If so, he will certainly get what he deserves, but the rest of us won't.

Posted by: Qwerty on May 30, 2007 at 1:27 PM | PERMALINK

Andy will do just fine as a pundit in his twilight years. It's the working poor who stand to get stiffed if Social Security gets gutted.

Posted by: David W. on May 30, 2007 at 1:28 PM | PERMALINK

Has anyone seriously proposed to use the years of Soc Sec surplus (still in them) some sort of indexed fund of real money, available years from now?

I can't help but think that the plan to destroy Soc Sec started when the soc sec surplus was counted in the nat'l deficit accounting. Of course it has been making the deficit look better for many years.

To simplify, borrowing billions for a disastrous occupation = okay. Borrowing billions because the soc sec surplus was squandered = bad.

But even if Soc Sec isn't destroyed, we're victims of a shell game. Wage-earners paid in regressively (income cap on the taxes), then get to pay again in taxes to pay interest and principal in the future. The republicans have double-taxed the working class, and insured that they will be less responsible by shifting tax rates.

Posted by: tubino on May 30, 2007 at 1:31 PM | PERMALINK

To add onto Peter's comment, Sully's battle against HIV may reach a point (as many have) that he will be legally disabled way before his retirement. Is he postulating that HIV patients who are disabled, many in their 30's, are also "hogging" S. S. money?

Ironically, not 30 min. ago I was consulting with a Dr. who suggested that it was way past time that I applied for disability (AIDS). That is a step I have been having a hard time taking.

At 49, I do not want to be disabled.

Posted by: Keith G on May 30, 2007 at 1:31 PM | PERMALINK

Is that a tax increase or a premium increase? Fine distinction, but...

Posted by: Righteous Bubba on May 30, 2007 at 1:33 PM | PERMALINK

Can we please knock off the scaremongering on this subject?

Scaremonger has become an artform amoung righties.

All they have to say is "The turrists are coming to take your freedoms away" and Americans with less than two brain cells to scrape together go running around, freaking-out.

Posted by: myrna frap on May 30, 2007 at 1:34 PM | PERMALINK

Not to mention that the "Baby Boomer" generation is genrally considered to span birthdates from 1946 through 1964.

Whcih would make Andrew Sullivan (Ta da!) a Baby Boomer himself.

Posted by: Hesiod on May 30, 2007 at 1:35 PM | PERMALINK

Until recently, Social Security actuaries considered the system to be financially sound if their projection showed that full benefits could be paid for 75 years with no change in assessments. By that traditional standard, Social Security is now insolvent.

Some optimists (including Paul Krugman who surely knows better) pretend that SS can simply pay full benefits until its money runs out. This is not a practical course, because if we wait that long, draconian cuts will be necessary. So, some group will lose before that time, either workers or retirees.

I disagree with Sullivan's idea that the retirees will lose. They are numerous and politically effective. Today, the average retiree is richer than average worker, but the retirees keep winning the political battles.

A place where Sullivan's worry is more likely to come true is France, where there's a growing population of unassimilated, Islamic North African immigrants. When these immigrants become a large part of the working-age population, they may choose not to pay a big share of their salaries to support retired Frenchmen in style.

Posted by: ex-liberal on May 30, 2007 at 1:35 PM | PERMALINK

What's up with Josh Marshall's man crush on Sullivan?

Marshall quoted an email from a few years ago from a reader which quoted in turn Sullivan's touting of the so-called flypaper theory.

Then Marshall went way out of his way in a later post to note that Sullivan has since recanted, and is so fascinating Marshall can't stop reading him, and that he, Marshall, seemed to be a real fan.

To me, Sullivan is about as reliable and consistent a commentator as Christopher Hitchens. Take away their command of English, and what's left? One day they say A, then the next day they think it's extraordinarily clever of them to change their mind to say not A instead.

For those of us more interested in Truth than Whimsy, this is not a good thing.

Posted by: frankly0 on May 30, 2007 at 1:36 PM | PERMALINK

'63 is still considered Boomer territory? Wasn't the whole concept based on 'post-war' horniness?

I mean, I've had a few late nights, but 18 years???

Posted by: wishIwuz2 on May 30, 2007 at 1:36 PM | PERMALINK

I also heard a good point recently from Bob Scheer who pointed out that the "Boomer Bubble" may be less impactful than is commonly thought because many Boomers will continue to work well past 65 (by choice and due to good health) and won't begin collecting SS at that point anyway. I don't know much about SS, but this sounds plausible considering that most of the Boomers I do know have little interest in giving up their careers before they have to; there's too much identity there.

Posted by: Doug-E-Fresh on May 30, 2007 at 1:39 PM | PERMALINK

I'm looking at my 2007 Social Security Statement right now. Here's what it says:

Unless action is taken today to strengthen Social Security, in just 10 years we will begin paying more in benefits than we collect in taxes. Without changes, by 2040 the Social Security Trust Fund will be exhausted.* By then, the number of Americans 65 or older is expected to have doubled. There won't be enough younger people working to pay all of the benefits owed to those who are retiring. At that point, there will be enough money to pay only about 74 cents for each dollar of scheduled benefits.

*These estimates of the future financial status of the Social Securit program were produced by actuaries at the Social Security Administration based on the intermediate assumptions from the Social Security Trustees' Annual Report to the Congress.

I assume the bold (emphasis mine) is what he is focusing on. I also assume the "intermediate assumptions" are non-reality based.

Posted by: res ipsa loquitur on May 30, 2007 at 1:40 PM | PERMALINK

W could probably win back some political capital if he'd bring Social Security back up... by mending it and not ending it amusing how the old Clinton clich makes so much sense nowadays..

Posted by: Robert on May 30, 2007 at 1:41 PM | PERMALINK

W could probably win back some political capital if he'd bring Social Security back up... by mending it and not ending it amusing how the old Clinton clich makes so much sense nowadays..

Posted by: Robert on May 30, 2007 at 1:41 PM | PERMALINK

An 18 year span for the Boomer generation would allow for the possibility that some Boomers could have kids who are considered Boomers. So then, it's not even a generational term.

What exactly DOES define the Baby Boom generation? Is it just the stat-spike in births?

Posted by: wishIwuz2 on May 30, 2007 at 1:42 PM | PERMALINK

As several commenters have already noted, 2028 - 65 = 1963, Sullivan's date of birth. Most people consider 1964 to be the last birth year of the baby boom generation. Or is Sullivan in his vanity pretending to be younger than he really is?

Posted by: nemo on May 30, 2007 at 1:42 PM | PERMALINK

No, being born in 1963 does not make you a baby boomer. How freaking old (or should I say young?) are you people anyway.

The baby boom is generally considered to have started immediately after WWII (that's 1945 for all of you who don't know) and was over by 1955 or 1956.

Please, you all are showing you age (and your naivete about anything that didn't happen after 1990).

SHEESH!!

Posted by: Mark on May 30, 2007 at 1:43 PM | PERMALINK

As Tubino says above, the real scandal is the deal from the 80s that created a supposedly sacrosanct Social Security trust fund. This deal was soon abrogated, and all the money was pushed into the general fund, effectively creating a far more regressive tax system than this country had seen in many decades. Sen. Moynihan, an original proponent of the deal, was one of the few with the stones to denounce what happened.

All of which is to say, even were Sullivan not misinformed about the program's solvency (and his own generational designation), his "the boomers will hog it all" would be a complete crock. The money, in the general fund, has been dispersed to upper income earners through the Bush tax cuts. They're the ones who've hogged it.

Posted by: demtom on May 30, 2007 at 1:44 PM | PERMALINK

As his fact-free attacks on Paul Krugman indicated long ago, Sully understands nothing about economics. He's not much smarter on any other subject, either.

Posted by: Mike on May 30, 2007 at 1:44 PM | PERMALINK

Bill Gross of PIMCO wrote a piece last year in which he basically explained that it is important how much an individual saves for retirement but it makes ZERO difference how much society, as a whole, saves.

The people who are not working, i.e. retired, need to pay the people who are working to do work for them. If one retiree is relatively richer than the other retirees then he can afford to pay more for the goods and services PRODUCED by the workers.

Basically, people who are retired are dependent upon the people who are working. Yes, I can buy a fancy house and a new car and other items that will last for a period of time. But basically everything I want must be produced by someone fairly recently.

I want dinner tonight. Someone needs to cook it today; most of the ingredients were grown and transported recently.

I have a fancy house but someone needs to produce the electricity today; someone needs to repair it today; someone needs to clean it today.

There is very little society can do to prepare for a bunch of people who no longer produce.

It is a natural law that can't be changed.

Posted by: neil wilson on May 30, 2007 at 1:45 PM | PERMALINK

AND, anyway, isn't Sullivan a frigging Repug? He's making tons of money...that's what investments and savings are for...he should have gotten that memo...they don't want the government taking care of them...so he should just think of it as funding the RNC while he's working so he can make the HUGE BUCKS he's packing away...not to mention his partner, I'm betting...poor whiney baby!

Posted by: Dancer on May 30, 2007 at 1:46 PM | PERMALINK

Man, what a life! If the IRS don't getcha, the HIV will! Poor Andy, I can see him now gulping cat food and the latest HIV drug cocktail and sayin' "I coulda been rich, rich and straight! I tell ya, I shoulda been rich!

Posted by: Mooser on May 30, 2007 at 1:46 PM | PERMALINK

"Until recently, Social Security actuaries considered the system to be financially sound if their projection showed that full benefits could be paid for 75 years with no change in assessments. By that traditional standard, Social Security is now insolvent."

Dear heart, you really should look up the meaning of the word, "insolvent." Free clue: you used it incorrectly and inappropriately.

"Some optimists (including Paul Krugman who surely knows better) pretend that SS can simply pay full benefits until its money runs out."

Dear heart, not only are you misstating Krugman's position, you are also lying when you write, "until its money runs out." The Social Security money cannot "run out," since the tax is still being collected. In the worst-case scenario, in another 40-50 years benefits will drop to roughly 3/4 what they would otherwise be. Not only is it not clear that we will, in fact, see that worst-case scenario, but as Kevin correctly notes, fixing the problem is trivial.

"This is not a practical course, because if we wait that long, draconian cuts will be necessary."

No, dear, they won't, which was Kevin's point. Nice of you to prove his point for him, though. Q.E.D.

"A place where Sullivan's worry is more likely to come true is France"

LOL... What is it with the obsession with France from these idiots?

Posted by: PaulB on May 30, 2007 at 1:47 PM | PERMALINK

Once again, Democratic candidates should memorize this crystal clear, powerful Drum post and repeat, repeat, repeat.


Posted by: russer on May 30, 2007 at 1:48 PM | PERMALINK

The baby boom couldn't possibly have ended in 1956. The peak number of births didn't occur until 1957. And there was not a significant drop-off in the number of births until 1965.

Posted by: nemo on May 30, 2007 at 1:49 PM | PERMALINK

Bad Andy, the day after Josh mentioned he read Andy daily...

Posted by: RF on May 30, 2007 at 1:51 PM | PERMALINK

He may be inaccurate. He may be fantastically wrong. He may be selling confusion. He may be an unscrupulous liar. He is certainly trying to play his part in creating the "conventional wisdom" needed to pull off the Great Conservative Caper. The goal of the Great Conservative Caper, like all the projects of Republicans, is to subject average Americans to more risk and to help wealthy Americans accumulate even more wealth. This particular project is aimed at Social Security funds, but is the same as all the others, just needs a different cover story.

Posted by: bellumregio on May 30, 2007 at 1:51 PM | PERMALINK

The periodic letters from Social Security Administration that estimate one's future personal benefits now contain scaremongering about the future of Social Security. This is written by political appointees and is nothing more than politics.

However, the scary thing about Social Security is fundamental: Just as the Republicans have shown that it is useless to balance the Federal budget because at the first opportunity, they'll plunge it into defcit again, the Republicans have made it quite clear that they intend to undermine Social Security.

Posted by: putnam on May 30, 2007 at 1:51 PM | PERMALINK

Can we please knock off the scaremongering on this subject?

In the spirit of Atrios's simple answers to simple questions, NO

Posted by: Lindsey on May 30, 2007 at 1:52 PM | PERMALINK

Born in 1963, isn't Andy himself a boomer?

I was born in '63. Haven't you heard? We're Generation Jones now!

Social science run amok.

Posted by: Screamin' Demon on May 30, 2007 at 1:54 PM | PERMALINK

I can't help but think that the plan to destroy Soc Sec started when the soc sec surplus was counted in the nat'l deficit accounting. Of course it has been making the deficit look better for many years.

The plan to destroy Soc Sec began in 1935 when it was passed and signed into law. The tactics have changed--that is all.

Posted by: Soprano on May 30, 2007 at 1:54 PM | PERMALINK

The only thing more annoying than the rightwing's alarmist talk about Social Security (in it's transparent attempt to shut down the program) is the DNC playing along with this bogus non-issue.

As with George Bush and Dick Cheney's every utterance on Al Queda's plans for "world domination", the ridiculous assertions about Social Security becoming a "failed program" should be ridiculed CONSTANTLY - not embraced and treated seriously by the Democrats!

When are the Democrats, liberals, and progressives going to treat the GOP with the derision and unconcealed mockery they deserve? The GOP is a party of children and mental deficients, and they should be treated as such!

Is Social Security failing and is Al Queda is the greatest threat ever know in the history of mankind? Fuck no! WHY DON'T DEMOCRATS AND PROGRESSIVES MOCK THIS SHIT! LAUGH AT THEM!

It should be made into a joke like, "Yeah, Social Security's a failed program and 9/11 never happened!". THAT'S the kind of arguments Rove used to garner millions of supporters. Maybe the left should also use those tactics!

Remember, the GOP didn't reduce Michael Moore's arguments with facts or reason - they laughed at him because he was fat! BECAUSE HE WAS FAT! THAT was enough of a reason to avoid Moore's movie for millions of Americans! Think about it!

Posted by: Doc Hickory on May 30, 2007 at 1:56 PM | PERMALINK

Short Andrew Sullivan -
GAY ISSUES - Ultra Liberal Libertarian
ALL OTHER ISSUES - Ron Paul Facistic Libertarian
For example, he's FOR gay marriage (so he can marry his fella) but against abortion ('cause he can't knock up his fella). Get it? It's all about Andy geting to screw who he wants and keep all his money. You don't need to read him again.

Posted by: Barry in MiA on May 30, 2007 at 1:56 PM | PERMALINK

I liked RSA's joke about Andrew "coming at the...tail end."

Posted by: Cymon Dendu on May 30, 2007 at 2:06 PM | PERMALINK

Ah, Kevin.

You stop it. Now you want to raise MY taxes, so that baby boomers can live high off the hog in their old age?

It's not for the government to determine how to spend MY hard earned money. The government should instead shift our FICA taxes into mutual funds so that we can earn higher savings. Could anything be more obvious?

Posted by: egbert on May 30, 2007 at 2:07 PM | PERMALINK

Is 65 the appropriate age of retirement to obtain full benefits in 2028? Or is it 67?

If the latter, Andy was born in 1961 or very near that year.

Posted by: bubba on May 30, 2007 at 2:07 PM | PERMALINK

Barry nails it.

Sully's so entertaining, because he's so open and honest (just not with himself), and his ideological journey is interesting to watch. Like a train wreck. In slow motion.

Posted by: osama_been_forgotten on May 30, 2007 at 2:11 PM | PERMALINK

Barry you are my hero. Best expanation of Sully that I've read in a while (at least the best that didn't use profanity).

Posted by: Keith G on May 30, 2007 at 2:14 PM | PERMALINK

Doug-E-Fresh wrote: Bob Scheer who pointed out that the "Boomer Bubble" may be less impactful than is commonly thought because many Boomers will continue to work well past 65 (by choice and due to good health) and won't begin collecting SS at that point anyway. I don't know much about SS, but this sounds plausible

It does sound plausible, but in fact, the average retirement age has been dropping during the last few years. Apparently many healthy people can afford not to work and are opting not to do so.

PaulB, I was using the term "insolvent" precisely the way Social Security actuaries do. E.g., here's a letter from the Chief Actuary of Social Security Administration implying that SS is currently not solvent:

"This proposal would, through a combination of increases in taxes and coverage, reductions in the general growth in benefit levels, and certain enhancements to benefit protections, restore solvency to the OASDI program..."
http://www.ssa.gov/OACT/solvency/DiamondOrszag_20031008.html

As an aside, if solvency for SS were measured as it is for private pension funds, then SS would be required to have in reserve enough money to pay all earned benefits if the program were terminated today. By that standard, SS would be insolvent by trillions of dollars.

Posted by: ex-liberal on May 30, 2007 at 2:15 PM | PERMALINK

The traditional span of the baby boomer generation is 1946 (which marks the first births of those conceived after the end of WW II) to 1964, which is the last year there were over 4 million live births in the US until, I believe, around 1990. See http://en.wikipedia.org/wiki/Baby_Boomers

Assuming Sully was born in 1963 (as was I), he's a boomer (or a "shadow boomer", as those of us born too late to march in Civil Rights and anti-Vietnam War demonstrations are sometimes called).

As for his retirement age, he can not receive full benefits until he's 67, in 2030, although I believe early retirement, with a smaller monthly benefit, will still be available to him when he turns 65 in 2028.

And, yes, the SSA letters contain politically-inspired scare language designed to promote privitization, even though a calculation depending upon a conservative (in the good sense of the word) rate of economic growth would indicate the program is pretty much solvent into the indefinite future.

Posted by: barely a boomer on May 30, 2007 at 2:16 PM | PERMALINK

SHEESH!!

Posted by: Mark on May 30, 2007 at 1:43 PM | PERMALINK

Don't think so.

The rate of births continued to rise all the way up to about 1960-61, so that would be the earliest one might say the post-war baby-boom extended to, if you want to stop it on the first down-tick.

At 1963, to call Sullivan a near-end baby-boomer is within the range of this vaguely defined grouping.

That's always been my understanding and '55 or '56 doesn't come close to the peak of post-war births, closer to the middle.

Maybe your memory isn't quite as good as you thought?

Posted by: notthere on May 30, 2007 at 2:18 PM | PERMALINK

No matter what you say, Andrew, you'll never be anything more than a fag to them. You may as well just tell the truth.

Posted by: sherifffruitfly on May 30, 2007 at 2:18 PM | PERMALINK

The scariest thing I've read here is the revelation that the Bush administration and its young, fascistic Ministry of Information political types are using the mass-mailing privileges of OUR SSA, to spread its propaganda. Nice deal.

And likely, actionable. Can we please get one Democratic congressperson to launch an investigation of this? The headlines alone would be the modicum of pushback you'd need, to try and de-freak the fearful masses, after having received this crap in the mail.

Posted by: Barry Champlain on May 30, 2007 at 2:20 PM | PERMALINK

Boomers were born 1946-1964 (very occasionally I have seen it as ending in 1960).

He would be able to start collecting when he is 67 (not 65 - the law was changed two decades ago). I was born in 1951, and my Soc. Se. retirement age is 66.

Taxing ALL earned income (instead of have the ceiling be approx $90K) would solve the "problem".

Posted by: Coyoteville on May 30, 2007 at 2:21 PM | PERMALINK

Yes, we all know that the Social Security Administration is full of liars, and that Social Security has no problems at all.

Now do Medicare.

Posted by: carolinus on May 30, 2007 at 2:21 PM | PERMALINK

"a very modest tax increase"

No new taxes.

/winger

Posted by: Mysterious Traveler on May 30, 2007 at 2:25 PM | PERMALINK

Elvis wrote:

"Full benefits? Sure!
One tiny catch, though.

Your benefit will be paid in dollars that are worth a lot less than you expected.

It's always a lot easier for politicians to debase the monetary unit than cut benefits, hoping that beneficiaries don't notice that their COLAs seem to fall short of their real world price increases."


I remember making exactly the same point in a conversation with my roommate in 1974, when $7/hr was a very good wage.

Posted by: slanted tom on May 30, 2007 at 2:28 PM | PERMALINK

The baby boom is generally considered to have started immediately after WWII (that's 1945 for all of you who don't know) and was over by 1955 or 1956.

While the baby boom ran until 1964, as others have pointed out, the argument can be made that it really should be divided into two distinct groups: those born between 1946 and 1955, and those born between 1956 and 1964. People in the older group had very different experiences as young people than did those in the younger group. The older ones lived as adolescents and young adults through the hippie era, the civil rights struggles, and Vietnam, just to name a few major events, while those in the younger group were just children at the time. Moreover, the older group generally had greater economic success than the younger group, largely because they faced less competition for college admissions and for jobs.

Posted by: Peter on May 30, 2007 at 2:30 PM | PERMALINK

given that Sullivan's HIV+ it's somewhat doubtful whether he'll make it to retirement age at all.

As the partner of somebody who was infected approximately 1984, and who is still going strong, let me respectfully request that you stfu about something of which you are ignorant.

Posted by: rea on May 30, 2007 at 2:32 PM | PERMALINK

Coyoteville nails it. Raise the taxable wage ceiling and - voila! - problem solved! Why is this so hard to understand?

Posted by: MeLoseBrain? on May 30, 2007 at 2:32 PM | PERMALINK

As his fact-free attacks on Paul Krugman indicated long ago, Sully understands nothing about economics. He's not much smarter on any other subject, either.

In particular, Sullivan has demonstrated -- many, many, many times -- that quantitative information in general is really beyond his grasp. Makes one wonder just what it is people learn at that Kennedy school....

Posted by: sglover on May 30, 2007 at 2:32 PM | PERMALINK

Now you want to raise MY taxes, so that baby boomers can live high off the hog in their old age?
Posted by: egbert on May 30, 2007 at 2:07 PM | PERMALINK

Dems have been asking for Means Testing for decades as a way around this problem.

But then you CONs scream "Wealth Redistribution! Communism!"

Posted by: osama_been_forgotten on May 30, 2007 at 2:37 PM | PERMALINK

I also heard a good point recently from Bob Scheer who pointed out that the "Boomer Bubble" may be less impactful than is commonly thought because many Boomers will continue to work well past 65 (by choice and due to good health) and won't begin collecting SS at that point anyway.

Count me as skeptical. For many years now the trend has been toward earlier and earlier retirements. It's an exaggeration to say that 55 is the new 65, but only a slight one. More people elect to collect reduced SS benefits at 62 than wait to 65 for full benefits.

Of course, the trend may well stall out and reverse, especially as demographic pressures rise, but as things stand right now there's little or no reason to believe that people will be working past 65 in any appreciable numbers.

Posted by: Peter on May 30, 2007 at 2:37 PM | PERMALINK

the argument can be made that it really should be divided into two distinct groups: those born between 1946 and 1955, and those born between 1956 and 1964.

It's already been done. See Generation Jones.

Posted by: Screamin' Demon on May 30, 2007 at 2:40 PM | PERMALINK

Could we please stop blaming baby boomers for all of our problems, real or imagined, you WATB Sullivan! I suppose you think you and yours are the first "victim" generation? Well, perhaps only the worst/loudest WATB-Victim-Generation (WATBVG).

Posted by: AnotherJohn on May 30, 2007 at 2:40 PM | PERMALINK

Reading AS: if you skip his vacillations from one dumb opinion on Iraq and US politics to another, and his constant comments on Islamic extremism, he does provide some very interesting links to other people's writings. If I were Josh I'd visit Daily Dish every day, but skip Sullivan's own posts.

Posted by: sm on May 30, 2007 at 2:40 PM | PERMALINK

here is a nice graph

http://hypertextbook.com/facts/2002/SamuelBernard2.gif

shows the peak birth rate for 23yr olds at 1960.

Posted by: Kevin on May 30, 2007 at 2:42 PM | PERMALINK

osama_been_forgotten: Dems have been asking for Means Testing for decades as a way around this problem.

Actually, means testing is more a Republican thing. Dems don't like means testing because AARP doesn't like it. AARP doesn't like means testing because they want to maintain the idea that SS is an insurance program that repays money workers have invested. More means testing makes SS more like a welfare program.

Of course, there's a fair amount of means testing in the program now. The payout is not proportional to the payin. And, the partial taxibility of benefits affects the rich more than the poor.

Posted by: ex-liberal on May 30, 2007 at 2:44 PM | PERMALINK

Indeed, Peter, retirement ages are starting to inch upward, after falling for many years. (There have been a flurry of articles recently, on this trend reversal.) Maybe someone here has pointed out that the age of 65 was used (when Social Security began), because the average life expectancy was 63 in the 1930s. So seeing the age of admission creep up is perfectly sane. Personally, if my health allows it, I really don't want to formally retire at all and not think of collecting any Social Security until my early 70s.

Sullivan has obvious failings. But no one, on the left or right, has been more passionate or tenatious about the issue of torture, habeus corpus and other key areas. Tellingly, Sullivan has been more convincing in his arguments in this respect than an awful lot of progressives. There are many other areas where he has been most commendable as well. Yesteday, Josh Marshall called himself a fan.

Posted by: MaxGowan on May 30, 2007 at 2:48 PM | PERMALINK

A place where Sullivan's worry is more likely to come true is France, where there's a growing population of unassimilated, Islamic North African immigrants. When these immigrants become a large part of the working-age population, they may choose not to pay a big share of their salaries to support retired Frenchmen in style.

I don't mean to hijack the thread or anything, but it should be pointed out that most media reports exaggerate the woes of France's Islamic population. Some of them are unassimilated, impoverished, and adhere to a fundamentalist version of Islam, but that's far from the case with all. Many are quite well assimilated and lead largely secular lives. What might be the most significant thing of all is the fact that around 30% to 40% of French Muslim marry outside the religion, an outmarriage rate higher than for Hispanics in America and much higher than for black Americans.

Here is a very well-researched article about the state of Islam in France. It's a lot less scary than what you hear from the MSM and especially from certain quarters of the blogosphere.

Posted by: Peter on May 30, 2007 at 2:54 PM | PERMALINK

To all of you making jokes about Andrew's sexuality, you're sure doing your part to try and prove their argument that liberals are just as intolerant as conservatives. How about if we cut with the gay bashing and leave that for Redstate, Powerline and Free Republic.

Posted by: Doug-E-Fresh on May 30, 2007 at 2:59 PM | PERMALINK

These cynics also assume that we will continue the stupid giveaway to the rich, to cap the contribution income level. Take away the cap, and we've got plenty to go around...

Posted by: Neil B. on May 30, 2007 at 3:05 PM | PERMALINK

Doug-E-Fresh, I totally agree with you. Thanks. Any gay bashing displayed on this thread is shameful. Disagree with Andrew Sullivan, make it an honest argument, as Kevin did. We're supposed to be the good guys in this respect.

Back to Social Security, the biggest threat (outside the right-wing takeover) - and it's a real threat - is that we borrowed a billion dollars today, just like yesterday, just like tomorrow.

Posted by: MaxGowan on May 30, 2007 at 3:10 PM | PERMALINK

Sullivan amply demonstrated in his debate on Religion/Atheism with Sam Harris that he thinks that oh so sincerely expressing your faith in something is a valid mode of argument. He is all about gut and heart rather than brain. Perhaps that is why his posts on torture are quite moving, noteworthy and persuasive. On other issues, not so much.

Posted by: gregor on May 30, 2007 at 3:10 PM | PERMALINK

I think that this is an honest mistake on Mr. Sullivan's part. The vast majority of people that I talk to think that Social Security "won't be around when they retire." The only reason that this could be so is if we lose the political will to keep it healthy and well-funded.

Posted by: bink on May 30, 2007 at 3:11 PM | PERMALINK

"I think that this is an honest mistake on Mr. Sullivan's part."

I don't. Sullivan's job as a pundit is to actually think about and look into these issues. He's not the "vast majority of people" who aren't policy wonks and who don't aspire to be. As such, he's held to a different standard.

Posted by: PaulB on May 30, 2007 at 3:20 PM | PERMALINK

You guys may be right on the Social Security math, but there's some really screwy Baby Boom figuring going on. The "boom" was millions or horny soldiers coming home and having kids all of a sudden, then having a second and a third. I was born in 1950, and I was one of the last of the true boomers. An enormous number of youths turned into teenagers during the 1960s, hence the Sixties, and teh continuing over-influence of this demographic bulge. Whatever else Andy may be, he ain't no way a boomer.

Posted by: Alan in SF on May 30, 2007 at 3:25 PM | PERMALINK

"Now do Medicare."

That's actually a point that has been made here quite a few times. Social Security isn't even remotely in trouble and we have decades to fix whatever needs fixing, assuming that anything does. Medicare, on the other hand, is in far worse shape and drastic measures may indeed be necessary to save it. So why do Republicans fixate on Social Security?

Posted by: PaulB on May 30, 2007 at 3:25 PM | PERMALINK

How exactly has Sully been "more convincing" in his arguments than an "awful lot" of progressives? The fact is, that while an "awful lot" of progressives were warning about this very path we were embarking on (the WOT boogeyman, torture, abandoning habeus corpus) Sully was much too busy writing breathless mash notes about W and condemning anyone who questioned W as being treasonous, a literal fifth column. Sully didn't turn against W until gay marriage became an issue. THEN he started pointing out things that progressives had been shouting about for the last several years like they were something new that he had just discovered.

Go back and read Sully's columns and blog entries and you will see that, in real time, the man has been WRONG WRONG WRONG about EVERYTHING.

This exact pattern has been repeated throughout Sully's career and will unfortunately continue until people stop treating him as anything more than a person with a certain rhetorical flair.

Posted by: danno on May 30, 2007 at 3:26 PM | PERMALINK

Max;
It's not gay-bashing, per se.

It's just the sense that; if Sully weren't in fact, gay, he probably would not have broken ideologically with the Republican Party. Oh, that gay-marriage-ban stuff really pissed him off, didn't it? If it weren't for that, I'm pretty sure he'd still be on-board (with waterboarding, and all the rest) with all the rest of the neocons.

Don't get me wrong. I *do* like his arguments about torture and habeus corpus, and all that. I just don't think he really believes a word he's saying. If he did, he would have been more vocal in 2003 and 2004 when these issues started cropping up.

Posted by: osama_been_forgotten on May 30, 2007 at 3:27 PM | PERMALINK

He is desparate to still be one of the Conservative gang, hence his hatred for Social Security.

Posted by: lilybart on May 30, 2007 at 3:28 PM | PERMALINK

He is desparate to still be one of the Conservative gang, hence his hatred for Social Security.

Posted by: lilybart on May 30, 2007 at 3:29 PM | PERMALINK

"PaulB, I was using the term "insolvent" precisely the way Social Security actuaries do.

Dear heart, quoting an inaccurate usage of the word to justify your own scaremongering inaccurate usage of the word does nothing to bolster your case.

"n aside, if solvency for SS were measured as it is for private pension funds, then SS would be required to have in reserve enough money to pay all earned benefits if the program were terminated today. By that standard, SS would be insolvent by trillions of dollars."

ROFLMAO... Is this really the best you can do, dear? Talk about scaremongering! With every post here you're confirming Kevin's original point. You really should quite while you're behind, dear; you're just making yourself look silly.

Posted by: PaulB on May 30, 2007 at 3:31 PM | PERMALINK

What gay-bashing?

This 47 year old gay man (I've been out for over 30 years) doesn't see any gay bashing on this thread. Andy-bashing, yes...gay-bashing, where?

Being liberal does not mean that you must be tolerant of everything, especially stupidity.

Posted by: danno on May 30, 2007 at 3:31 PM | PERMALINK

I wouldn't say "gay bashing," per se, but definitely some questionable talk about HIV and AIDS. I'd suggest leaving that out of the discussion since it's inappropriate and not really relevant.

Posted by: PaulB on May 30, 2007 at 3:42 PM | PERMALINK

"It's not for the government to determine how to spend MY hard earned money."

Actually, yes, dear, it is. You reap the benefits of living in our society; you have to pay the costs. TANSTAAFL.

Posted by: PaulB on May 30, 2007 at 3:46 PM | PERMALINK

For the four millionth time, the boomers had their SS deductions raised in 1983 at the behest of Reagan and Greenspan. The boomers have paid in full for their SS payments through their lifetimes.

If any of the boomers' excess SS payments have been stolen by BushCo to support their stinking war and their tax cuts, give them a call. Any future SS shortfall has nothing to do with the boomers, who are paid up in full.

Posted by: bebimbob on May 30, 2007 at 3:47 PM | PERMALINK

I thought only citizens received SS benefits? And that non-citizens are allowed to pay benefits under work permits, but are not allowed to receive until citizenship is granted? And that Sullivan cannot become a citizen until US imigration law is changed to allow HIV infected people to become citizens? Someone tell me where I'm wrong here. Because obviously I'm not right about something if Sullivan is counting the days to his SS benefits.

Posted by: Posture on May 30, 2007 at 3:58 PM | PERMALINK

Sullivan says "I was, of course, freaking out years ago" over the federal budget deficit, yet she supported the Bush tax cuts.

Hypocritical old queen.

Posted by: Tony on May 30, 2007 at 3:59 PM | PERMALINK

Danno, I love your reasoned discourse. Funny, though, how Sullivan posts more on condemming torture than most on any side of the argument. And who did he support in '04? In '06? Who does he label "war criminals"? Is he wrong on that too?

Thanks, PaulB, for pointing out the obvious.

Posted by: MaxGowan on May 30, 2007 at 3:59 PM | PERMALINK

bebimbob, there really are two separate issues: 1) what happens when we stop putting money into the trust fund and have to start drawing it down, and 2) what happens when the trust fund is exhausted. The former is what you're referring to, I think, while Kevin and Andy are referring to the latter. Hard to tell with Sullivan, though, since his comment was vague enough that it could actually be referring to anything.

Posted by: PaulB on May 30, 2007 at 4:01 PM | PERMALINK

While a minute ago I was defending Sullivan (on ohter issues), on Social Security, he's way out of his league on a number of counts, including the need for one. The smarter comments here (and Kevin's own musings) trump anything you're likely to see him post on Social Security.

Posted by: MaxGowan on May 30, 2007 at 4:06 PM | PERMALINK

Jeez, people, just because you don't like the way demographers conventionally cut the pie, doesn't mean you can just assert your own opinions. Baby boomers are people born between 1946-1964. Rejecting the expert opinion is so very Bushie of you!

Kevin's point is extremely important and needs to be repeated over and over: Social Security is not in trouble. If GWB is able to persuade Americans that SS is doomed and must be scraped, his financial recklessness and sleight-of-hand will have pulled off history's biggest transfer of wealth from middle class taxpayers--who have been overpaying SS since 1983--to the richest Americans. Who would dare call him incompetent then?

As for Andrew Sullivan, he is bipolar. He is so right about some things--torture, conservative political theory--and such a dolt about others, including SS and healthcare. I wonder if he pays for his HIV+ treatments himself, since he is such a libertarian? If not, one wonders how he reconciles the dissonance of his world views or maybe, like most humans, he can rationalize systems that benefit him but resents giving benefits to others.

Posted by: PTate in FR on May 30, 2007 at 4:13 PM | PERMALINK

Kevin is correct according the Social Security Administration's own annual reports, and if one views Social Security completely separately from the rest of future government spending.

According the middle projection of SSA, sometime in the next decade, the payroll tax will no longer cover all of the payouts, and this deficit will likely slowly grow until it reaches a maximum 25% of benefits (there are so-called low-cost projections that are more "optimistic", but one should visit SSA on-line for more details). This isn't a disaster. You could raise the payroll tax slowly to keep the payouts balanced with the revenue- in other words, pay as you go, which should have been the basic idea all along, but for political reasons it was felt necessary to create the illusion of an individual account secure in the Trust Fund to pay out one's future benefits.

As for overall tax revenue, new revenue, spending cuts, or borrowing from the private market will have to be found sooner than the next decade. Sometime soon (the next 3 to 4 years), the surplus in FICA will peak and reverse. This will mean less tax money to spend in the General Fund but still no disaster.

There are calls here for removing the cap on earnings subject to the payroll tax. You don't go far enough. The payroll tax should be abolished and the revenue replaced by an adjustment in income taxes. There is no reason, other than the psychological crutch of the fictional personal account, to fund present benefits with a regressive payroll tax. Most of you think progressive taxation is good, so why retain any of the payroll tax structure?

What could cause a fiscal disaster in SSA itself in the future? Nothing that I can easily foresee other than a much greater longevity without a similarly increased healthy life beyond 67 years of age. For example, if medical breakthroughs kept most people alive to 100, but did not actually improve health of people between ages 67 and 80, the country would find it nearly impossible to fund such a situation without a significant reduction in benefits in the form of much later retirement. This is related to the problem that Medicare faces in the future and is why that program's future is far more menacing from a fiscal perspective, considered alone.

Neil Wilson made a very good point in his comment, however. There is still the demographic problem of a falling ratio of the productive to the non-productive. It is often claimed that future workers will be much wealthier and better able to bear the burden of more retirees, but this view completely ignores human psychology- the workers won't be more willing to share a higher percentage of their income even though they would be richer than the workers of today, and the retirees of tomorrow won't be satisfied with a real retirement income that is static at best, while workers are getting progressively wealthier. This has political and economic consequences. Future workers can cover benefits in two ways- simply give up more of their income to support the increased retired cohort, or cover the benefits with debased dollars. The political settlement is going to likely mean later retirement, or more direct means testing.

Posted by: Yancey Ward on May 30, 2007 at 4:47 PM | PERMALINK

Get rid of the $97,500 limit on paying Social Security Taxes.This isn't a tax increase, as the Republican Congress claimed in 2005. It's a tax equalization.

I make just over $60,000 annually, and I pay 6.2% of that towards Social Security. A person who makes $125,000 annual pays 6.2% on the first $97,500 and NOTHING on the remaining $27,500. That means his/her overal tax rate is only 4.8%. How is that fair.

According to the U.S. Census Bureau, over 8.3 million Americans earn a wage over $97,500. That's everything from $97,501 to the $14.78 million that the average Standard and Poor's 500 company CEO was paid in 2006. That CEO was taxed $6,045, which is 0.04% (4 one-hundredths of 1%). If the CEO paid 6.2%, the amount of tax that went into the Social Security Fund would have been $916,360.

The Medicare tax doesn't have an upper limit. Why should the Social Security tax? The current justification is that the rate is used to calculate eventual payments. A limit could be kept for calculating the payment and taken out for what gets paid in. It would certainly keep the fund solvent a lot longer.

Posted by: Lew Wolkoff on May 30, 2007 at 4:47 PM | PERMALINK

I wonder if he pays for his HIV+ treatments himself, since he is such a libertarian?

Hell, for that matter, I'd like to see him also pay fractionally for the costs of the elementary education for all those scientists and drug company workers who were involved in the creation of those drugs. As well as the roads used to deliver them from factory to store, etc. Yeah. He can have every penny of every tax he's ever paid right back, if he covers all the costs of public investment that have led to him getting these treatments. Shelf price doesn't even begin to cover it.

Posted by: osama_been_forgotten on May 30, 2007 at 4:51 PM | PERMALINK

I'll admit up front that I'm an actuary and I've kept an eye on the Social Security debate. Kevin is right in that the sum of the projected payroll tax revenues and outflows from the Social Security Trust Fund will pay full benefits for a long time. This is based on projections that the actuarial staff at the Social Security Administration updates annually.

The issue that conservatives keep beating on is real, because the Social Security Trust Fund isn't really funded. (This is the money that Gore talked about putting into a "lockbox" during the 2000 campaign) A nominal balance has been building up since 1982(?) when the payroll tax rates were changed by the Greenspan Commission (yes, that Greenspan). Since it isn't really funded, the overpayment of payroll taxes each year has allowed the government to show a smaller deficit because they include the Social Security payroll tax in the consolidated budget. There was one real budget surplus during the Clinton years. So when Greenspan was saying we should cut taxes a few years ago to disburse this "surplus" his 20 year old bait and switch was complete.

Now the Conservatives are back on the bandwagon about "entitlement" programs (these are not entitlement programs but Social Insurance which is a VERY different animal) that will cause us to raise taxes in the future. Either we will have to raise taxes to pay the benefits down the road, or everyone who has overpaid over the past 25 years (and will continue to overpay) will get screwed so that very, very rich people can pay fewer taxes.

And I don't want to hear any BS about those people paying the most taxes - they should b/c they benefit much more than the average citizen by the US environment.

Posted by: Matt Lantz on May 30, 2007 at 4:53 PM | PERMALINK

Get rid of the $97,500 limit on paying Social Security Taxes.

Waaaah! But that would be like PUNISHING me for working hard and trying to improve my standard of living. Hell, if you did that, I wouldn't be motivated to do anything more than just stay a shoeshine boy all my life.

And that would be bad for America.

Posted by: conservative whiner on May 30, 2007 at 4:56 PM | PERMALINK

Sully is neither a green card holder nor a U.S. citizen. He does not qualify to get a green card via marriage, either, because he's gay.

He's going to have to be living somewhere else when he retires, so who CARES!

Posted by: Bobbi on May 30, 2007 at 5:22 PM | PERMALINK

Matt Lantz,
I am sure you will agree that conservatives have long sounded off about entitlement programs and they have made headway in undermining them. It was quite easy since the poor have few sympathizers in the Middle Class especially when their condition is blamed on some personal vice. But the real target has always been the broad Middle Class. It has taken some recasting- like reframing the estate tax as the “death tax” to get at programs from which they benefit.

Jacob Hacker interviewed Stuart Butler, one of the grand architects at the Heritage Foundation, for his book 'The Great Risk Shift'. Butler put it this way:

In general, an element of all these (conservative policy approaches) is to create a parallel system based on more legitimate principles. In the process, you change people’s view of risk- you get people to think differently...You could just say “Accept risk, walk it off” But what we say is “essentially privatize the risk management for health or retirement.” You give people other vehicles to manage the risk of living too long or being sick. You wean people gradually off of social insurance risk management into private risk management without making them fearful about it. You have got to do it in steps and have some government protection, at least at the beginning.

One favorite tactic of Republicans is to use the “Argentina method”. This is why they are no tax and spend Republicans. By defunding some program (getting into the lockbox) or the whole government they make the “hard decisions” all but inevitable. George Bush’s administration has been masterful at the “Argentina Method”.

Posted by: bellumregio on May 30, 2007 at 5:28 PM | PERMALINK

Scaremongering? No, the problem is very, very real. During the last year and a half or so, five organizations with significant credibility have been traveling the US together to present what they have billed as “The Fiscal Wake-Up Tour” to call our attention to the US's gathering fiscal storm. I attended their presentation in April, 2006, and the picture is disturbing indeed.

The five participating organizations are as follows:
• The Concord Coalition, a nonpartisan grassroots organization founded by former senators Warren Rudman and Bob Kerrey, dedicated to informing the public about the need for generationally responsible fiscal policy.
• The GAO (Government Accountability Office), the independent and nonpartisan investigative arm of Congress commonly called the congressional watchdog. It studies how the federal government spends taxpayer dollars.
• The Brookings Institution, a center-left think tank.
• The Heritage Foundation, a center-right think tank.
• The Committee for Economic Development (CED), an independent, nonpartisan organization of business and education leaders.

The following statement and points 1 thru 5 are quoted from a Concord Coalition slide used at the Fiscal Wake-Up Tour presentation (all of the Fiscal Wake-Up Tour presentations are available on the Concord Coalition web site at www.concordcoalition.org):
"Members of the Fiscal Wake-Up Tour do not necessarily agree on the ideal level of [federal] spending, taxes, and debt, but they agree on the following key points.
1. The federal government’s current fiscal policy is unsustainable.
2. There are no free lunch solutions, such as cutting waste, fraud, and abuse, or growing our way out of the problem.
3. The best way to make the hard choices is through a bipartisan process with all options on the table.
4. Public engagement and understanding is vital in finding solutions.
5. This is not about the numbers. It is a moral issue."

Points 6 through 12 are all taken from the various Fiscal Wake-Up Tour participants’ presentations.

6. The US faces large and growing structural deficits, largely due to the effect of demographic trends (in large part, our aging population) on entitlement programs – Medicare, Medicaid, and Social Security – and the looming growth in the amount of revenue needed to pay interest on the national debt.

7. The federal government’s revenue shortfalls have been exacerbated by recent tax cuts. The revenue losses will be even larger beginning in 2011 if the tax cuts are not allowed to expire as the laws authorizing the cuts were written.

8. The government’s deficit spending (i.e., borrowing money to run the country) threatens the country’s economic well-being. We are borrowing in excess of $1 billion per day from China to finance our spending. For the first time ever, more than 50% of the US’s total debt of more than $8.5 trillion is held by foreigners. As of today (May 30, 2007), every man, woman, and child in the US would have to pay $29,201.80 to the US Treasury to reduce the debt to zero, and that amount is growing every day. The implications of that for our children and grandchildren and beyond are profound and unconscionable.

9. In less than 20 years (i.e., by 2026), Medicare, Social Security, Medicaid, defense spending, and the interest on the pre-2006 debt will absorb virtually all tax revenue collected by the federal government. Education, transportation, income security, natural resources, environmental programs, farm programs, veterans programs, foreign aid, homeland security, science, space, technology, and all other budget items will literally disappear from the federal budget. By 2045, there won’t even be money available for defense. Note that as the government’s deficit spending continues in fiscal year 2006 and beyond and the federal debt continues to increase, all of this will happen even sooner.

10. During the 1990s, the US economy grew at an average of 3.2% per year. Closing the current long-term fiscal gap would require average annual economic growth in the double digits (i.e., 10% or more) every year for the next 75 years. Therefore, it is reasonable to conclude that is not possible for the US economy to grow large enough or fast enough for us to “grow our way out” of the problem.

11. We have only three options: reform the entitlement programs, downsize the rest of government, and raise taxes. In other words, eventually, taxes MUST be raised AND spending MUST be cut.

12. There is currently absolutely no leadership in Washington to tackle any of these issues.

Posted by: B-squared on May 30, 2007 at 5:36 PM | PERMALINK

Boo!

Posted by: The Republicans' Bogeyman on May 30, 2007 at 5:43 PM | PERMALINK

Matt Lantz: ...Either we will have to raise taxes to pay the benefits down the road, or everyone who has overpaid over the past 25 years (and will continue to overpay) will get screwed so that very, very rich people can pay fewer taxes.

I find it ironic that my husband and I have overpaid into Social Security our entire working lives, and now that we are in our peak earning years, we are going to hit with huge tax hikes--not to mention the AMT--to cover GWB's heist of the SS surplus for the really rich, rich, rich, his irresponsible fiscal management and his unjustiable invasion of Iran.

We never wanted him to be president, and we never supported his tax cuts (not to mention the fiscal and moral black hole that is the war in Iraq) but support him or not, we are going to stuck with paying the tab. The way I see it, we are screwed one way or another.

I think about the idiots who supported him, and I find it very, very hard to be civil. Maybe people who voted for him in 2000 and 2004 should pay a special idiot tax since they are the ones who got the rest of us into this mess. Sort of a reparation kind of thing.

Did I say ironic? Maybe infuriating would be more precise.

Posted by: PTate in FR on May 30, 2007 at 6:07 PM | PERMALINK

This 47 year old gay man (I've been out for over 30 years) doesn't see any gay bashing on this thread. Andy-bashing, yes...gay-bashing, where?

Being liberal does not mean that you must be tolerant of everything, especially stupidity.

Well said, Danno. Quite.

Posted by: jamey on May 30, 2007 at 6:08 PM | PERMALINK

The publication of the accrual basis federal financial statements is significant and should not be ignored.

The computation of the federal deficit is largely on a cash basis. Cash in less cash out.

Its an utterly inadequate way of looking at financial reality.

The accrual basis financial statements have been in place for a decade.

Another important point about the financial statements is that NO ENTITY was confident enough of the records of the federal government to certify that the financial statements represent what actually occurred.

Its not saying that there is fraud, but it is saying that NOBODY KNOWS.

And, as has been the case for the last decade, the department of defense is the chief culprit, in not keeping accurate records, summarizing, nor reporting. There is then NO ACCOUNTABILITY that the department of defense has spent its statutorily allotted funds in conformance with the law.

Somehow the bond market accepts this status. The world is dependant on the US government, and other governments are just as irresponsible.

It does however represent a debt that has to be paid, or bowed to. Bondholders in US debt include a substantial portion of institutional investors, but also a substantial portion of both domestic and international investors and foreign states.

And it will only be paid by tax.

Ironically, the process of incurring current debt through deficit spending is a form of taxation without representation as the taxpayers are our minor and unborn children and grandchildren.

Posted by: Richard Witty on May 30, 2007 at 6:27 PM | PERMALINK

There is a fiscal crisis regarding a) the general budget and b) medicare and medicaid.
There is no financial crisis regarding social security. The intermediate assumptions of the SSA relay on very low projected GDP growth. I have looked up the report for the year 2003.
Assumed gdp growth (intermediate): real growth:
2003 1.3 2.5
2004 1.2 3.9
2005 1.2 3.2
2006 1.1 3.3

You see the pattern? Intermediate cost assunptions about gdp growth tend to be much to pessimistic. If you use the more realistiv low cost assumptions, the trust fund never runs out.
I admit that the trust fund still poses a general budget problem.

Posted by: IM on May 30, 2007 at 6:43 PM | PERMALINK

given that Sullivan's HIV+ it's somewhat doubtful whether he'll make it to retirement age at all.

We should be so lucky!

The current generation of HIV medications have dramatically increased life span, to the point where it's become a chronic managable disease on par with type II diabetes. Though the data are still sketchy, it appears that both type II diabetics and HIV patients can avoid any significant decrease in life expectancy if they have full access to medical care, including medications.

The indefinite continuation of Sullivan's career just goes to show that even the most miraculous wonder-drug... can have undesirable side effects.

Posted by: moron on May 30, 2007 at 6:46 PM | PERMALINK

"With the number of elderly Americans set to double by 2030, the baby boom will become a "senior boom." So first and above all, we must save Social Security for the 21st century. (Applause.)

Early in this century, being old meant being poor. When President Roosevelt created Social Security, thousands wrote to thank him for eliminating what one woman called the "stark terror of penniless, helpless old age." Even today, without Social Security, half our nation's elderly would be forced into poverty.

Today, Social Security is strong. But by 2013, payroll taxes will no longer be sufficient to cover monthly payments. And by 2032, the trust fund will be exhausted, and Social Security will be unable to pay out the full benefits older Americans have been promised.

The best way to keep Social Security a rock-solid guarantee is not to make drastic cuts in benefits; not to raise payroll tax rates; and not to drain resources from Social Security in the name of saving it." BILL CLINTON STATE OF THE UNION 1999

one example of how both parties, when in power, trot out the social security speech.i've heard this doom and gloom for many years. so let us save the "i hate bush/republicans/conservatives" crap and try not to be hypocrites,i know it can be a challenge for some liberals,but try o.k.?we have a problem here, b-squared has made some good points. the politicians (both parties)have their personal interests above the countries well being.

Posted by: average american on May 30, 2007 at 6:53 PM | PERMALINK

So Clinton said in 1999: expenses higher than taxes 2013. That's 2016 now. Depletion of trust fund in 2032 and that is 2041 now. And so insolvency recedes farther and farther into the future...

Posted by: IM on May 30, 2007 at 6:58 PM | PERMALINK

IM - I don't know for sure but those look like the average productivity growth numbers. You'd have to add in population growth numbers to get a consistent comparison with GDP growth. I think your basic conclusion would stand, however.

Posted by: Matt on May 30, 2007 at 7:00 PM | PERMALINK

No Matt, that is real GDP growth. I was confused by the productity numbers at first, SSA thinks they are more important for whatever reason but they mention the GDP growth they use for their assumptions too. Of course we could look up their projected and historical productity numbers too.
The new intermediate numbers are around 2.1% for gdp, more realistic but if gdp growth in the next ten yeras averages say 2.5% instead, the dates of depletion would be pushed further back.

Posted by: IM on May 30, 2007 at 7:09 PM | PERMALINK

Kevin, over the last few years you have repeatedly said that Social Security is sound for the next 40 years or so, because the money is there in the form of govt bonds held by the SS administration.

But I have never seen you respond to the Concord Coalition's concerns which, as I understand it are: When the SS Admin starts redeeming these bonds in a few years to pay the retiring boomers, the federal govt will not be able to find other bond buyers to make up the deficit. At least not without raising interest rates to unacceptable levels.

So how about it Kevin, how do you answer the Concord Coalition's objections?

Posted by: bosco on May 30, 2007 at 7:12 PM | PERMALINK

So how about it Kevin, how do you answer the Concord Coalition's objections?

The Concord Coalition has a valid concern about the way our government taxes and spends, but the problem is not with Social Security itself, so it should not be labelled as the problem needing fixing.

Social Security has been collecting surplus payments from middle-class wage earners for over 20 years, and will collect them for another 10. When this policy was implemented, it was to fix "the problem" with SS, and there would not be an issue if the government had not wasted the surplus and now threatens not to fulfill its promises to those who have done their duty by paying the excess tax in the first place.

Posted by: Qwerty on May 30, 2007 at 7:45 PM | PERMALINK

Concerning the term "baby boomers": the reason the years for inclusion run from 1946 through 1964 is that it is based on our parents' reproductive years. Beginning in 1946 and continuing until 1964, our parents were responsible for one of the largest natural increases in population in our nation's history. This is not to say they stopped having children in 1964; but rather that any children born after that date were, probably, unexpected.
For a humorous and somewhat accurate version of what it was like, I can definitely reccomend Erma Bombeck's "At Wit's End" and "I Lost Everything in the Post-Natal Depression".

Posted by: Doug on May 30, 2007 at 9:16 PM | PERMALINK

Late to the party, but can't resist - Andrew Sullivan will likely be on an AIDS quilt in less than a decade, so what the hell is he fussin' about Social Security for anyway? All that "bareback" ridin' is gonna catch up with him.

Make Social Security a "flat tax" and it will be solvent forever. Don't hear many conservatives calling for that, do you?

***crickets chirping***

Posted by: The Conservative Deflator on May 30, 2007 at 9:44 PM | PERMALINK

Maybe Andy should go back to the UK. Maybe Thatcher will come out of retirement to make little Andy happy.
I tire of getting all the brits who long for the joys of tories and then complain about our one small vestige of socialism, all the while suffering from the hubris that makes them believe that they know everything about the us and its politics. the arrogance is breathtaking.

Posted by: virginia cynic on May 30, 2007 at 9:58 PM | PERMALINK

The Conservative Deflator: Andrew Sullivan will likely be on an AIDS quilt in less than a decade

Let me see if I can find the right words for a response to this sort of comment. Ah ...

Fuck you, asshole, and may you rot in hell.

Posted by: alex on May 30, 2007 at 9:59 PM | PERMALINK

I think it far more likely that Andrew Sullivan will rot in hell.

Posted by: The Conservative Deflator on May 30, 2007 at 10:31 PM | PERMALINK

"So how about it Kevin, how do you answer the Concord Coalition's objections?"

That's easy: The answer is that the problem you speak of has nothing to do with Social Security. The money was borrowed for and spent from the general fund; it will have to be repaid to the general fund. This is true regardless of whether the money was borrowed from Chinese banks, rich U.S. investors, small savings bonds, or any other financial instrument.

The solution is equally simple: let most of the tax cuts of the past several years expire. If we do not do this, we will have staged one of the largest wealth transfers (from the middle class to the wealthy) that this country has ever seen.

Posted by: PaulB on May 30, 2007 at 10:36 PM | PERMALINK

Make Social Security a "flat tax" and it will be solvent forever. Don't hear many conservatives calling for that, do you?

Nor Democrats, because it quite obviously would be politically unpopular -- not to mention damaging for the economy -- to drastically raise taxes on several million non-rich people.

Sure, George Soros or Bill Gates could afford such an increase, but a two income couple on Long Island or in Southern California making, say, $200,000 a year, while comfortable, wouldn't be considered rich by modern American standards. Especially with skyrocketing bills for things like college tuition and property taxes. And gasoline. And healthcare. Far better, as someone mentioned above, to convert to a pure "notional" social insurance system funded by a fair, simple and progressive income tax. Either that or convert FICA itself into a progressive payroll tax (which would pretty much be the same thing).

Posted by: Jasper on May 30, 2007 at 10:49 PM | PERMALINK

"12. There is currently absolutely no leadership in Washington to tackle any of these issues"

Most of those issues, and all of the really critical ones, have nothing to do with Social Security. In fact, when someone starts lumping Medicaid, Medicare, and Social Security together and talks about "entitlement reform," my bullshit detector goes off, since the first two are legitimately imminent and critical problems, while the third is decades away and may require no action at all.

What has been very revealing is that the Bush administration, along with the rest of the Republican Party, is ignoring the really critical problems and focusing on the one that is the least critical and the most manageable. Even more revealing was the fact that none of Bush's "solutions" would have actually fixed the "problem"! It was nothing more than a blatant, partisan attempt to end Social Security as we know it.

I should add, by the way, that while the Democrats are clearly better on the issue of Social Security, they don't have much to be proud of in leading the way on Medicare and Medicaid issues, with the exception of those strongly advocating for national health care in one form or another, which will likely be the ultimate solution to those other problems.

Posted by: PaulB on May 30, 2007 at 10:52 PM | PERMALINK

What's up with Josh Marshall's man crush on Sullivan?

Marshall, Sullivan, and Drum are all members of "We once believed that the Iraq War was a good thing" Anonymous, and as such, they are all fascinated with each others' journey on the road to recovery.

But it should be kept in mind -- once an addict, always an addict.

Posted by: Disputo on May 30, 2007 at 11:15 PM | PERMALINK

Social Security is an entitlement. Anyone who meets the elibility requirements (and files the application) gets a benefit--"is entitled".

We don't budget just so much per year, the first 100 billion dollars or the first 1 million people, who meet the requirements. which ever comes first and the rest of you, too bad. If you meet the requirements, you get the benefit. That is until the prospect that the US government default on its creditors.

What are some of the requirements:
Some of you are confused.

U.S. Citizenship isn't one of them.

And residency isn't one of them.

Actual retirement isn't one of them--its just that you don't get your check for part or all of the year if you earn too much (before age 70).

So age is one, at least for retirement benefits.

Number of work credits is one. (Before 1983 they were known as 'quarters of credit'). Hence, the concept of "earned" at least to some degree does apply.

Residency is not necessarily a factor of entitlement. All workers (legal and illegal) pay the tax, if the employer properly reports their earnings on the W-2 so they can get proper credit.

Citizens and permanent resident aliens who meet the eligibility factors will get whatever the calculated benefit works out to be, based on their earnings history (and maybe or maybe not based on overall funding--the point of contention between Andrew and Kevin).

Of course, even then the W-2 for most illegal aliens has wrong ID info--and those credits/wage history don't go into anyone's benefit cacluation.
That actually helps the funding issue.

Don't know what would happen if a previously illegal alien who had properly credited earnings went home and actually file--I'm sure it has. Before the early 80's it was easier to get an legit SSN, even if maybe you weren't suppose to have one. That's another subject.

Residency has other impacts:
If a beneficiary has worked under the Social Security system of another country, some countries have treaty agreements with the US that takes into account their work history here and there and Soc Sec pays the representative US part. (That works the other way for US citizens who have worked in these foreign countries.)

Any beneficiary who moves to a few restricted countries get their benefits suspended while they are there.

Sullivan probably is a permanent resident alien, since he has been here over 20 years and goes back and forth to London from time to time. He entered the US before he was HIV positive and probably had his green card before then. Probably the law that bars both the green card and citizenship was passed since both his entry and his infection. Tell me what sense that makes.

Oh, yeh. And if his HIV positive should ever flare into its symptomatic form and medically prevent him from working, there is no doubt he would qualify for Social Security Disability.

So enough of some facts, now some opinion for you complainers out there: if he dies, from any cause, without a Federal marraige or civil union recognition, your tax dollars won't be used to support any of his dependent survivors, unless he has a child, either naturally or by adoption--some of you probably would want to prevent that too.

Finally, Soc Sec is required by law to provide individuals with an estimate of what one might receive in benefits in the event of retirement, death or disability. The retirement estimate even optimistically assumes that your current earnings trend will continue until that eventuality.

The notification of the actuarial prospects that the systems funding will or will not be there to support the payment of the estiaated benefit is probably also required by law. Seems fair.

But it hardly seems that most people will understand the one sentence, when the actuarial reports are pretty involved, even for the professionals.

(Hey, I'm a Democrat and I work for that agency. I'm not against the program any more than I am for privatization.

There is the demographic AND financing problem that both require something different soon for Medicare and later for Social Security (whether you look at the low, intermediate or high).

But if Dems were creating it from scratch today, we would have something more like private accounts both because such things are ubiquitous investments now (they weren't even in the 60s for most workers). There is just no good way to transition to that and every proposal so far--except upping the wage cap--would kill it.

The wage cap would take care of the low assumptions are right. But it takes only a fraction of a percent change in ANY one of several of the assumptions to change the outlook--pregnancy, work force participation and unemployement, immigration, death and disabiity, inflation, productivity AND immigration.

Can you tell me any other large organization, private or public that has to balance part of its budget on a 75 year time frame? And never gets to amortize ANY expenditure past the current fiscal year?

None of it is one issue and none of it is easy.

Posted by: dzen on May 31, 2007 at 1:49 AM | PERMALINK

I am SICK and TIRED of this "baby boomers hogging Social Security" crap.

We've been paying through the nose to fund our own Social Security, much more than needed to pay current benefits, ever since the '80s, and the ReThugs have been sucking it dry to give a tax cut to the rich.

It is the cut-income-tax crowd who are sucking Social Security dry, as the payroll tax pays more and more of the every day operating costs of this deceitful warmongering government.

Posted by: Cal Gal on May 31, 2007 at 7:21 PM | PERMALINK

This is a pretty weaselly way of arguing. SS will cover everyone until 2028 (more or less) ASSUMING that all payroll taxes are "diverted" back to the program. However, that cash flow stream is already spoken for. It's used for general crap like welfare, defense, and education.

Unless taxes are raised elsewhere, more or less immediately, the payroll taxes - minus the portion that will be spent elsewhere - will be insufficient.

We will either see huge tax increases - and WELL before 2028 - or cuts in benefits. Andy should be worried indeed.

Posted by: finance on June 3, 2007 at 2:14 PM | PERMALINK




 

 

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