Friday, March 05, 2004
The lies continue: I'd love to get a job where I can just recycle old blog posts over and over and over ad infinitum. New York Times columnist Paul Krugman (whose Nobel Prize in economics is never going to come if he's really this stupid) has trotted out another column -- a virtual carbon copy of one nearly a year earlier -- claiming that Social Security isn't in any real trouble -- at least not for a few decades in the future, so don't worry about it.
In fact, it would take only modest injections of money to maintain that system's current benefit levels for at least the next 75 years. Other reports, however, appear to portray a system in deep financial trouble. For example, a 2002 Treasury study, described on Tuesday in The New York Times, claims that Social Security and Medicare are $44 trillion in the red. What's the truth?
Here's a hint: while even right-wing politicians insist in public that they want to save Social Security, the ideologues shaping their views are itching for an excuse to dismantle the system. So you have to read alarming reports generated by people who work at ideologically driven institutions — a list that now, alas, includes the U.S. Treasury — with great care.
First, two words — "and Medicare" — make a huge difference. According to the Treasury study, only 16 percent of that $44 trillion shortfall comes from Social Security. Second, the supposed shortfall in both programs comes mainly from projections about the distant future; 62 percent of the combined shortfall comes after 2077.
Read this and this. Krugman is correct when he says Social Security has a demographic problem. In fact, it's that very fact that puts the lie to Krugman's whitewashing of the problem.
Earlier this week, the Washington Post's George Will had an excellent column that provided some solid numbers showing the dramatic change in the nation's demographic picture since Social Security was first created.
Today life expectancy at birth is 76, which is troublesome enough, but additional expectancy at 65 is 17 years -- and growing. For about 150 years the longest life expectancies have advanced about 2.5 years per decade. Most people start collecting Social Security at 62, so the year 2019 will be especially challenging, because more American babies were born in 1957 -- 4.3 million in a population of 172 million -- than in any other year in American history.
Today there are more than 100 million additional Americans, but there were fewer than 4 million newborns per year throughout the 1990s. In the 1950s the median age for women's first marriages was 20.3. By 2000 it was 25.1. This has meant a decline in fecundity, which affects the wager we have made on Social Security as an intergenerational compact -- children being able and willing to support the elderly.
On Jan. 31, 1940, a check, number 00-000-001, for $22.54 was issued to Ida May Fuller of Ludlow, Vt., making her the first recipient of recurring monthly Social Security payments. Then, in an act of dubious citizenship, she lived to 100, dying in January 1975, having received $22,000 in benefits. That did not matter because in 1940 there were 42 workers for every retiree. Today there are 3.2 to 1. In 2030 there will be 2.2 to 1.
Modest infusions of cash and the repeal of the Bush tax cuts can't overcome Social Security's structural flaws. Krugman's contention that they can is a serious disservice to the American people.
(For the record: I don't think Krugman is stupid. I think he's a liar.)