Greenspan Says Your Pension is Too Large
Scaring Americans Out of Social Security
| Below is a response to Federal Reserve chair Alan Greenspan's recent remarks, in which he said that Bush's deficit was so big that drastic action needed to be taken. Greenspan got that part right, but then he recommended, instead of less war or less corporate welfare, a cut in old age pensions. |
by Sam Smith
Alan Greenspan has given the effort to scare Americans out of Social Security another boost, aided as always by a non-critical press. NPR even reported falsely this morning that the Social Security trust fund would go broke in 2018 when in fact that date is only when it is estimated that expenses will exceed revenues. Here, once again, are a few facts to keep in mind as the robber barons try to steal your old age pension:1. The trustees make three long-term estimates. The one that politicians and the media invariably use is the most pessimistic which assumes economic growth so low that you certainly wouldn't want your Social Security invested in the stock market because it wouldn't be going anywhere.
Using the more reasonable intermediate projection, the trust fund will not run out until after 2040.
2. The trust fund is an artificial accounting creation. If it runs out, then Social Security can be funded from other sources including the incredibly bloated military budget. To understand this game, imagine the defense budget came out of a trust fund. Would we stop defending ourselves when this fund was drained thanks to typical defense cost overruns?
3. While it is true that there will be an increase in older Americans in coming decades, there will also be a smaller percentage of younger Americans to educate and take care of. In considering public costs, it is the combination of these two -- the so-called dependent population -- that matters. Here is what you are not being told: the dependent population was larger during the Kennedy administration than it will be in 2020 during the Great Social Security Crisis. Here are the actual percentages of total population:
1960
Children: 36%
Seniors: 9%
Total dependent population: 45%
2020
Children: 24%
Seniors: 16%
Total dependent population: 40%
Incidentally, as of 2000, the total dependent population was 39%, so we're talking about a one point increase.
In short, you are being conned on Social Security and the media is doing nothing to defend you.
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Sam Smith publishes the Progressive Review
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