Social Security "crisis" evaporates when confronted with economic reality. People who despise Social Security on principle are willing to glide right over those pesky numbers, six months of hand to hand combat in blogtopia (tm skippy) have convinced me of that. But I have seen no evidence that any of the Gang of 14 have drank deep from the cup of Ayn Rand. Most or all of them need to have their eyes opened, they need to read and understand the numbers behind the Inside Baseball terms "Intermediate Cost" and "Low Cost", but I have little reason to fear that their first response to those numbers will be blindfold, ear plugs and mouth gag.

Social Security was the Third Rail of American Politics even when the numbers supported "crisis", now that numeric support is gossamerically thin, it falls apart when you run your fingers through it.

Social Security is the Schroedinger's Cat of our era. You can make a case whether it is dead or alive on abstract terms but once you open the box the results are determinative. Well I snuck a peek into the box through the pinhole that is the Trustees Annual Report and from my view the rigor is advanced.

For some or all of the Gang of 14 Social Security may be still sitting in the Quantum State of Schroedingers Cat, neither dead nor alive but presumed dead but I don't think that in the end they will ignore the mewing and scratching from inside the box.
Bruce Webb | Homepage | 05.28.05 - 6:46 am | #

Damn metaphors. It is "crisis" that is in the advanced stages of rigor mortis, not Social Security itself. The latter is just about to tear a big hole in the lid of that box.
Bruce Webb | Homepage | 05.28.05 - 6:50 am | #

Sorry Bruce, I'm lost in your metaphoric blackhole. (Mew...)

When there is so little agreement on the basic modeling assumptions that impact the funding both pre and post 2041, how does it make sense to do anything?

No action should be taken that doesn't require the Congress to repay the trust fund. Period. End of discussion. The trust fund was explicitly created to build up a reserve - using current contributions from workers and business - to begin pre-funding the baby boomer expenses.

In regard to how to fund the system after the trust fund is repaid (some say in 2041) when then-current contributions MAY NOT fund the benefits currently defined, the evidence seems to be that only minor tweaks that are widely supported by the public (like raising the amount of income subject to taxation) may be all that is needed.

Not only isn't the current situation a crisis, doing anything when extraneous issues like 'private/personal accounts' are being shilled for political and ideological reasons makes decisions made today politically and economically stupid. The current Republican majorities are not likely to prevail, so waiting until the voting balance of the parties is more traditional will lead to more publicly acceptable results.

If the efforts of the gang of 14 are worthwhile, their attention should be focused on concrete problems like the tax shortfall that leads to growing fiscal deficits. That is where we need some moderating impacts. Their rallying cry should be 'no more tax cuts' and 'no extensions to current tax cuts that expire'. And maybe 'repeal post-2001 tax cuts that principally benefit the upper-income 1-5% of taxpayers. The lazer-like focus should be on how to raise the funds needed to repay the social security trust fund obligations of the government between now and when the trust fund is depleted.
JimPortlandOR | 05.28.05 - 10:30 am | #

One other 'project' that the gang of 14 should undertake:

Take the Social Security Trust Fund out of the budget by law (a real lock-box) so the Congress can spend those funds only in the public glare of publicity. And force the administration to put the costs of the WOT (Afghanistan, Iraq, etc.) IN THE BUDGET.

How can moderates not advocate fiscal sanity in budgeting?
JimPortlandOR | 05.28.05 - 10:39 am | #

Bruce -- amazing post. The longer people don't listen, the better you get!

I agree with Jim. Demand that congress honor the trust fund and their promise and be done with the rest.
cl | Homepage | 05.28.05 - 10:54 am | #

Metahor even :)
anne | 05.28.05 - 11:40 am | #

Max Sawicky got it right with "no deal with dipshits". This White House has proven that it cannot be trusted. Besides - Bush has so constrained any changes such that their practical impact are deferred until 2015. So why not wait until 2009 when we just might have an honest White House?
pgl | 05.28.05 - 11:47 am | #

PGL

Within another 2 years the population mix will have changed enough that no cuts in Social Security or Medicare will be possible. We are aging, and the aging vote. The guess is Medicare may already be safe. Excellent, we will wait.
anne | 05.28.05 - 11:58 am | #

For all the whining about lack of savings in the economy - SS has produced an incredible amount of savings - so much that it helped to fund Bush's tax cuts.

The point isn't the population mix - it's productivity and how the gains of productivity are shared in society. We are running big productivity gains without similar gains in wage growth.

There is more than enough wealth in the US economy to fund retirement.
peBird | 05.28.05 - 1:47 pm | #

The point is precisely population mix, from a voting perspective. Were it not for fear of older voters, Social Security would be sorely threatened. An aging population will protect Medicare and Social Security. That is critical.

Senators and Representatives must be aware there can be no compromise or they will lose the coming election.
anne | 05.28.05 - 1:53 pm | #

hmm, mid-terms

Bush is blithely pushing the Republican Party on to the Third Rail of American Politics all the time claiming, and maybe believing, that the American people are going to punish supporters of the status quo. (Status quo being Latin for "keep your hands off my Social Security check").

Bush has lost 50 points on approval since his peak and they give Karl Rove a promotion? Bush is a sinking stone, he simply happened to be at 51% in Nov 2004. Another couple of weeks, or a better Democratic candidate, or someone else than Ken Blackwell counting the votes in Ohio and we would have had this one. (Which would have left Republicans free to claim we screwed up Iraq.)

But as it is the chickens are coming home to roost. Or in this case roast. Because that Third Rail still has plenty of juice and all Democrats need to do at this point is to bring the barbecue sauce.
Bruce Webb | Homepage | 05.29.05 - 7:40 am | #

You missed something: Teamsters President James Hoffa wants to work with Republicans on a bipartisan Social Security solution.

Here are the last three paragraphs of this item http://www.crosswalk.com/news/13...html? view=print

This week, Teamsters President James Hoffa was quoted as saying that Social Security is in big trouble, and he praised President Bush for trying to fix the problem.

Hoffa told the Gannett News Service that President Bush "should be given credit for the fact that he has initiated a debate regarding what we should do."

Hoffa expressed interest in working with Republicans on a bipartisan solution.
JRD | 05.29.05 - 1:07 pm | #

James Hoffa is a chip off the ol' blockhead.

Exactly why would I care? The Teamsters showed their true colors when they counterorganized against the the UFW (Chavez - United Farm Workers) thirty five years ago. They sold out to the bosses and the Repbulican party decades ago.

I would spit on anything Jimmy Jr endorsed. In fact I feel pretty vindicated right now, if I am pissing off Jimmy I must be doing something right.
Bruce Webb | Homepage | 05.30.05 - 12:52 am | #

The comment was to Mark.
JRD | 05.30.05 - 4:13 am | #