Social Security Con Artists Are Lying About One of the Strongest Arms of the Program
Continued from previous page
So, the truth is that the government does routinely spend more than it takes in -- it’s only broken even or run a surplus in 12 of the 70 years since entering World War II (and since the establishment of the trust fund, we only took in as much as we spent for a few years during Bill Clinton’s second term). The government makes up that shortfall by issuing debt. Whether it sells that debt to your pension fund, the Chinese Central bank or the Social Security Trust Fund doesn’t make a lick of difference.
But if the system isn’t tweaked at some point over the next few decades, those debts will eventually have to be paid off in order to give retirees their promised benefits. And this gets to the nub of the matter: if benefits aren’t trimmed and payroll taxes aren’t increased, the Social Security “shortfall” will have to be paid out of general revenues, which are financed by taxes that are, on average, far more progressive than payroll taxes. So the rush to “fix” a system that is anything but broken is at least in part motivated by fears among the wealthiest Americans that their taxes may rise, disproportionately in their view, some 30 years down the road.
Just how effective is the corporate Right’s campaign to terrify the public into believing in their all-encompassing “entitlement crisis”? So much so that the standard rallying cry among even savvy progressives has been that we need to “ strengthen Social Security now for the future.” The truth is we don’t need to do anything anytime soon; while the $5.4 trillion "shortfall" projected over the next 75 years is a scary number, it represents just 0.7 percent of the country’s total economic output over that period, according to the trustees’ assumptions. And the annual gap can be fixed anytime. Even if nothing at all were done before then, the program’s 2084 shortfall would represent only 1.4 percent of our economic output (in a country that currently has the 27th lowest tax burden out of the 30 wealthy countries of the Organization of Economic Cooperation and Development).
These are all things to keep in mind when digesting the granny-bashing blather emanating from Washington. And consider, too, that the entirety of the 75-year “Social Security gap” is equal to the value of extending George Bush’s tax cuts for the wealthiest 2 percent of Americans. As the Center for Budgets and Policy Priorities pointed out, “Members of Congress cannot simultaneously claim that the tax cuts for people at the top are affordable while the Social Security shortfall constitutes a dire fiscal threat.” But that’s just what they’re doing.
Joshua Holland is an editor and senior writer at AlterNet. He is the author of The 15 Biggest Lies About the Economy (and Everything else the Right Doesn't Want You to Know About Taxes, Jobs and Corporate America) . Drop him an email or follow him on Twitter .