Saving Social Security

The vultures are circling on this one.

It has been endlessly frustrating to Right-wing ideologues that no matter what they do, Social Security remains fiercely popular with the American people -- the "third rail' of American politics. Now they think that they can convince everyone that the retirement of the "baby-boom" generation will bring a "crisis" in the system and bring it all crashing down. Before you buy into this, there are a few things you should keep in mind.

Social Security is not about to go bankrupt. This is a classic "big lie" -- repeated over and over (by those who never liked Social Security to begin with) until people come to believe it. The truth is that the studies claiming to show that the system cannot work are based on unrealistically low estimates of population and economic growth. It can be made to work, though only if we resolve to do so now.
Social Security can be made more solid through a more progressive funding system, such as lifting the earnings cap on taxes. The biggest problem with the system is that, since the 1960's, more and more of the income in this country has shifted to investors and other high-income people. The present payroll tax, however, is regressive -- falling most heavily on low- and middle-income wage-earners. If the funding system were made more progressive, so that it followed the increases in income, the system would be sound far into the future. The best first step would be to eliminate the "earnings cap" that lets high-income people out of paying their share. Of course, this is the one proposal that the mainstream policy-makers refuse to look at.
Social Security benefits need not, and should not, be reduced. Since the system can be made sound by changing its funding system, there is no need to cut benefits or raise the eligibility age. These changes would fall most heavily on low-income people, who need the benefits more, and who have lower life-expectancies and are thus less likely to collect at a later age.
Social Security is a right of all members of the community -- not an individual savings program. Contrary to the stereotype of wealthy seniors, most retirees have very little income aside from their Social Security benefits. The system represents a decision by the American community that everyone is entitled to a dignified reitrement -- not just those wealthy, skilled, and lucky enough to do well in the market. If we traded it for a system of individual accounts, low-income people would not have enough to put in and, if the accounts were owner-managed, there would be quite a few people victimized by con artists -- or just plain unlucky. This proposal is just bad news.
No more than a small part of the Social Security trust fund should be invested in the market. This is a "solution" being touted mainly by the brokerage industry, which hopes to make big bucks from handling the trades. Putting Social Security in the market would obviously expose people's most basic retirement security to the risks of the market. What goes up, after all, usually tends to come down.

For more information, check out the Democratic Socialists of America Statement of Principles on this issue.

Other good sources of information

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