Thursday, July 29, 2010

Five Myths about Social Security

Don't believe the "hatriots" (people who call themselves "patriots" while spouting hate and lies).

From MoveOn.org (supported with actual facts and research):

"Top 5 Social Security Myths

Myth #1: Social Security is going broke.

Reality: There is no Social Security crisis. By 2023, Social Security will have a $4.6 trillion surplus (yes, trillion with a 'T'). It can pay out all scheduled benefits for the next quarter-century with no changes whatsoever (1). After 2037, it'll still be able to pay out 75% of scheduled benefits--and again, that's without any changes. The program started preparing for the Baby Boomers' retirement decades ago(2). Anyone who insists Social Security is broke probably wants to break it themselves.

Myth #2: We have to raise the retirement age because people are living longer.

Reality: This is a red-herring to trick you into agreeing to benefit cuts. Retirees are living about the same amount of time as they were in the 1930s. The reason average life expectancy is higher is mostly because many fewer people die as children than they did 70 years ago (3). What's more, what gains there have been are distributed very unevenly--since 1972, life expectancy increased by 6.5 years for workers in the top half of the income brackets, but by less than 2 years for those in the bottom half (4). But those intent on cutting Social Security love this argument because raising the retirement age is the same as an across-the-board benefit
cut.

Myth #3: Benefit cuts are the only way to fix Social Security.

Reality: Social Security doesn't need to be fixed. But if we want to strengthen it, here's a better way: Make the rich pay their fair share. If the very rich paid taxes on all of their income, Social Security would be sustainable for decades to come (5). Right now, high earners only pay Social Security taxes on the first $106,000 of their income (6). But conservatives insist benefit cuts are the only way because they want to protect the super-rich from paying their fair share.

Myth #4: The Social Security Trust Fund has been raided and is full of IOUs.

Reality: Not even close to true. The Social Security Trust Fund isn't full of IOUs, it's full of U.S. Treasury Bonds. And those bonds are backed by the full faith and credit of the United States (7). The reason Social Security holds only treasury bonds is the same reason many Americans do: The federal government has never missed a single interest payment on its debts. President Bush wanted to put Social Security funds in the stock market--which would have been disastrous--but luckily, he failed. So the trillions of dollars in the Social Security Trust Fund, which are separate from the regular budget, are as safe as can be.

Myth #5: Social Security adds to the deficit.

Reality: It's not just wrong--it's impossible! By law, Social Security's funds are separate from the budget, and it must pay its own way. That means that Social Security can't add one penny to the deficit (8).

Defeating these myths is the first step to stopping Social Security cuts."


Sources:

1."To Deficit Hawks: We the People Know Best on Social Security," New Deal 2.0, June 14, 2010 http://www.moveon.org/r?r=89703&id=22141-6657076-4g9LN1x&t=15

2. "The Straight Facts on Social Security," Economic Opportunity Institute, September 2009
http://www.moveon.org/r?r=89704&id=22141-6657076-4g9LN1x&t=16

3. "Social Security and the Age of Retirement," Center for Economic and Policy Research, June 2010 http://www.moveon.org/r?r=89705&id=22141-6657076-4g9LN1x&t=17

4. "More on raising the retirement age," Washington Post, July 8, 2010
http://www.moveon.org/r?r=89706&id=22141-6657076-4g9LN1x&t=18

5. "Social Security is sustainable," Economic and Policy Institute, May 27, 2010
http://www.moveon.org/r?r=89707&id=22141-6657076-4g9LN1x&t=19

6. "Maximum wage contribution and the amount for a credit in 2010," Social Security Administration, April 23, 2010 http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/240

7. "Trust Fund FAQs," Social Security Administration, February 18, 2010
http://www.ssa.gov/OACT/ProgData/fundFAQ.html

8."To Deficit Hawks: We the People Know Best on Social Security," New Deal 2.0, June 14, 2010 http://www.moveon.org/r?r=89703&id=22141-6657076-4g9LN1x&t=2

12 comments:

Shady Lady July 31, 2010 at 12:10 AM  

Very intersting Skye! Thanks for sharing this. :)

skyewriter August 1, 2010 at 9:40 AM  

You bet, Shady Lady. Hope you are yours are well!

LeftLeaningLady August 3, 2010 at 9:19 PM  

I have been yelling about #3 for YEARS. Of course most people call me a socialist when I do!

How are you? I am back. Not full time, but hopefully part time anyway. I need to have a better balanced life and I have missed all of my 'blogland friends. :-)

poietes August 4, 2010 at 11:48 PM  

Skye,
Really informative post. Great job.

skyewriter August 5, 2010 at 8:31 AM  

Hi LLL! Nice to see you and hope you are well. I am crazy; SSDD! Balance... yes, I think I remember what that is :). I would rather be called a Socialist than a Republican *any day*. I will look forward to new posts when you are able!

Hi poietes: thank you, you are very kind, but I really can't take the credit since this was in an email from moveon; it did get my gears turning. Hope this info will help spur conversations about the reality of things instead of the never-ending spin.

mikeb302000 August 9, 2010 at 12:36 PM  

Great post. Thanks for "hatriots," that's a new one on me.

skyewriter August 10, 2010 at 10:18 AM  

Hey, MikeB. Thanks for stopping by. I read your blog when I get a chance but have learned not to comment much unless I want a gaggle of "hatriots" flooding my comment section. I admire your patience with some of the nutters that post there to you. Hope you are well.

Seeing Eye Chick August 19, 2010 at 1:39 PM  

After what the Military Industrial Complex, allowed BP to do to our entire Gulf Region and possibly our Eastern Seaboard, I think if we cut their budge we could easily save social security and possibly ourselves.

mikeb302000 August 21, 2010 at 1:34 AM  

I say "amen and hallelujah to that one. The Military spending to carry on two wars, yes two because the withdrawal from Iraq is total bullshit, could easily cover the other needs. Those are the real gangsters, those MIC guys.

skyewriter August 21, 2010 at 11:10 AM  

Hi, SEC and mikeb,
Yup, the US has never invaded a country and left. I need to find the source, but I recall reading that the US maintains something like 45 military bases globally. Who says we're imperialist? We all should care about that, especially when we are firing teachers, firemen, policemen, and closing public (read "socialist") libraries.

mikeb302000 August 22, 2010 at 1:36 AM  

I think the military bases are much more numerous than that. My friend who writes Opinione has written about it.

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