The Bullshit Lies of Alan Simpson about Social Security


From FIREDOGLAKE

[...] Let me elucidate some of the ways that Simpson is wrong about Social Security:

SIMPSON: It’ll go broke in the year 2037.

FACT: The Social Security program faces a modest long-term financing shortfall of tax revenue and interest on Trust Fund assets. The Social Security Trustees estimated in 2009 that the Old Age, Survivors, and Disability Insurance program will continue to add tax revenue to their Trust Funds up to 2016. The Trust Funds will continue to grow because of interest earned through 2023, at which time total assets will be $4.3 trillion. Subsequently, Social Security will gradually draw down all reserves before the end of 2037, if Congress takes no action whatsoever, it will have sufficient resources to pay about three-quarters of scheduled benefits. Hardly “going broke.”

SIMPSON: All of them have to do with stabilizing the system, which we are told is insolvent, it’s paying out more then it’s taking in.

FACT: Social Security is currently running a surplus. In 2009, an estimated 94 percent of Social Security tax revenues were spent to meet current expenditures (benefits and administrative costs). The surplus tax revenues, along with interest credited to the Trust Fund, contribute to a growing Trust Fund balance.

SIMPSON: It’s 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been setup.

FACT: The interstate highway system was built in the 1950’s when Social Security’s income and outgo were equal. The build up of the trust fund began after 1983 when Congress consciously chose that route as part of the 1983 amendments.

SIMPSON: When I was your age there were 16 people paying into the system and 1 taking out and today there are 3 people paying into the system and 1 taking out.

FACT: This is the same misleading information that Bush used to sell his privatization plan. The 16 to 1 ratio is a figure plucked from 1950, the year that social security expanded to cover millions of farm and other workers. All pension programs that require a period of employment for eligibility show similar ratios at the start or when expanded because all newly covered workers are paying in, but none of them have yet qualified for benefits. By 1955, the ratio was 8 to 1 and by 1973 the ratio was where it is today…

More here.
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3 Comments

It is a mistake to buy into the frame that has Simpson being sincere. No doubt he is sincerely promoting the interests of his financial backers who want to get their hands on what little is left of the US credit line, but there is no reason to adopt the position that he is wrong simply because he is lying in a manner to mislead the credulous. The Class War is heating up. No point confusing incoming artillery with mere brain farts.

Arming ourselves with debating points is the effort here. -DS

Any shortfalls in Social Security could be fixed and then some by simply requiring the FICA tax to be imposed on all income, whatever the level. Now, income above $130,000 (approximate) is not subject to the FICA tax. As anyone with a brain can figure, this tax is regressive in the extreme. Furthermore, although income BELOW a certain level is not subject to income tax. It is, however, still subject to the FICA tax. Just one of the myriad ways in which the rich get richer . . .

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