Stopping the Bum's Rush
Politically, that seems far-fetched. A general fiscal
crisis, on the other hand, is a real possibility - but not
because of Social Security. In fact, the Bush
administration's scaremongering over Social Security is in
large part an effort to distract the public from the real
fiscal danger.
There are two serious threats to the federal government's
solvency over the next couple of decades. One is the fact
that the general fund has already plunged deeply into
deficit, largely because of President Bush's unprecedented
insistence on cutting taxes in the face of a war. The other
is the rising cost of Medicare and Medicaid.
As a budget concern, Social Security isn't remotely in the
same league. The long-term cost of the Bush tax cuts is
five times the budget office's estimate of Social
Security's deficit over the next 75 years. The botched
prescription drug bill passed in 2003 does more, all by
itself, to increase the long-run budget deficit than the
projected rise in Social Security expenses.
There was also another NYTimes article from December 31, 2004, that discusses how social security may be UNDERestimating increases in life spans. There is some debate on what this means. In other words, does this mean that more people draw out social security longer? Or does this mean more people work longer? Is any of this a problem? Is any of this a benefit?
From a December 31, 2004 NYTimes Article by ROBERT PEAR: Social Security Underestimates Future Life Spans, Critics Say
"The higher costs associated with longer life expectancy
could be offset in several ways that do not involve a
reduction of Social Security benefits," said John R.
Wilmoth, another demographer at Berkeley.
People who live longer could work longer, for instance. Or
the size of the working-age population could increase
because of higher birth rates or a larger number of
immigrants.
Further, some population experts foresee developments that
could wind up buttressing the forecasts of the Social
Security Administration. S. Jay Olshansky, a professor of
epidemiology and biostatistics at the University of
Illinois at Chicago, said the era of large increases in
life expectancy might be nearing an end, with the spread of
obesity and the possible re-emergence of deadly infectious
diseases.
For more information about privitization of social security being a BAD thing, see Buying into Failure, another Krugman NYTimes Op-Ed article that was mentioned in a previous post about social security.
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