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A message for all Americans under the age of thirty: Social Security will be there for you.
Even if absolutely nothing is changed about the funding of the system for the next forty years, Social Security will be there for you. If there are never any such things as private accounts or personal accounts, Social Security will be there for you.
"But they keep saying it's going to go bankrupt," you say. They've been misleading you. Social Security will be there for you.
"What do you mean - the President himself said it would go bust pretty soon?" The President is misleading you. It's pretty simple - even using the most pessimistic forecasts about economic growth and the aging of the American public, Social Security can continue paying full benefits until around 2042. If you're in your mid to late twenties right now, you will be at retirement age right around then. Social Security will be there for you.
"Ah-ha! But isn't that the year the President said it'd be bankrupt?" Again, using pessimistic forecasts, in 2042 the system will have to pay out more than it is taking in. If absolutely nothing was changed, Social Security could still pay out about 73% of the promised benefit in 2042. That is not necessarily a good thing, but it also does not mean "bankrupt" in the way that most people think of it. Social Security will be there for you.
"Well, what about that 2018 year people keep talking about? Doesn't something bad happen then?" According to some forecasts, in 2018 the amount of money being paid into the system will be less than what is necessary to pay out.
"Wait, didn't you say that was 2042 when that happens?" Hold on, I'm getting to it. You see, the people who designed the Social Security system knew that eventually there would be more people who needed benefits than who were paying for them, and that people would eventually live longer and thus need to collect benefits for longer. Those in government who were trying to fix the system at various points, like Alan Greenspan in 1983 for example, also knew that.
So, they decided to set it up so that the people paying into the system were actually paying more than what was needed right away. They took the extra money and put it in what they were calling a Trust Fund. That Trust Fund would be used to cover the extra money needed when it got to the point where more had to be paid out then what was coming in. Some forecasts say the year when we'll have to start dipping into the Trust Fund is 2018. But that still means full benefits are being paid. Social Security will be there for you.
"Wait a minute - a lot of people say that the Trust Fund is already spent!" Wrong. The money that went into the Trust Fund is invested in US Treasury Bonds - or, in other words, loaned to the US Federal Government.
The US Federal Government sells lots of bonds, which is a way for it to borrow money. The way a bond works is shockingly simple - you pay some money now by buying a bond (the loan) and the person you buy the bond from promises to pay you back, with interest (the investment.) US Treasury Bonds are one of the safest investments there is because the US government always pays them back.
"Always?" Yes, always. For anyone to say that the Trust Fund is a "myth" or is "already spent" is to say that the US Government will default on these Treasury Bonds, which it has never done before. If the US Government started defaulting on Treasury Bonds, it would likely trigger a major international financial crisis, as there are many individuals and foreign governments that have also invested in Treasury Bonds. Even our own President, George W. Bush, has most of his personal wealth invested in Treasury Bonds. So, it is safe to assume that the government will not be defaulting on US Treasury Bonds any time soon.
If all of the Trust Fund is in Treasury Bonds, and Treasury Bonds are most certainly going to be paid back, then the Trust Fund is in fact real, so when the time comes where that money is needed to pay for Social Security benefits, it will be available. Social Security will be there for you.
"But why do people keep saying that about the Trust Fund, then?" Because to pay the Treasury Bonds back, the government will likely have to raise income taxes.
"Well no wonder - no one likes that!" Indeed. But that was the deal that was made in 1983. The simple version of that deal was that the low and middle income people would pay more payroll taxes for a few decades, and then after that the high income people would pay more in income taxes for a few decades. If that deal is taken back now, it would be screwing the less well off for the enrichment of the well off. Which, of course, is what the rich seem to always try to do.
"I'm confused." You're supposed to be. There is a group of people who actually want to get rid of Social Security altogether. But they won't tell you that outright, because the American people like Social Security, and don't want to get rid of it. So these people instead try to trick the American people by confusing them about what's really going on with the system. They don't want you to know that the system is pretty much fine as it is, and will definitely be there for you.
Instead, they introduce things like private accounts that eventually make it so expensive to keep the current system going that the choice will either be "raise taxes" or "cut spending." People don't like high taxes, so the bet is that "cut spending" is what will happen. Then the program gets cut altogether. In public they pretend they are "saving Social Security" but in reality they are trying to "starve the beast."
"So, what do I do then?" You get yourself informed about Social Security, and what the Republicans and our President are trying to do to phase it out. The information is out there, in many sources. I laid out some basic facts for you, but there's more detail all over the place. Read the New York Times or Washington Post. Read Josh Marshall and Kevin Drum and The Daily Howler. Read The Phony Crisis by Dean Baker and Mark Weisbrot.
Armed with new knowledge, you then find a way to articulate why it is that Americans find Social Security so effective and vital. You tell people who scoff at it how it is one of the most virtuous things we do as a society, in that we all agree that our best off will help to make sure that every one, no matter what their circumstance, can face old age with dignity and not in poverty.
Then you take it upon yourself to become super-knowledgeable about every aspect of the issue. Know the answers to these questions: What are the options that are available to us to keep the system solvent forever? What are the options that are being currently debated?
Once you've done all that, you stop letting other people our age go on TV and the radio and you stop letting our peers tell pollsters stupid crap like "I believe in UFOs and Santa Claus more than I believe Social Security will still be around."
Because that misinformed attitude makes it easier for the people who want to get rid of it to achieve their goal. Because it makes our generation look foolish and apathetic and callous.
But mostly because it isn't true - Social Security will be there for you.
Dan Filowitz is Toronto-born, New-Jersey-raised, Indiana-University-educated, and Chicago-residing. In addition to his Lost At Sea contributions, Dan is a senior staff writer for political humor site TalkStation.com and the president of ChicagoImprovAnarchy (The CIA) a Chicago-based improv theatre company. We are not mentioning the 9-5 corporate job. Apparently, Dan does not sleep much. Dan Filowitz is the perfect dinner party guest - fun, witty, intelligent, with wide-ranging interests, ecclectic tastes and a winning smile. Just make sure you have coffee available.
See other articles by Dan Filowitz.
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