Bush's Voodoo Math Calculations On Social Security

[Itsthetruth]

Dayton Beach News-Journal
February 9, 2005

Manipulative math on Social Security
by Pierre Tristam

It would be inaccurate to call the president's characterization of the future of Social Security "inaccurate." When he said in the State of the Union address that "by 2042 the entire system would be exhausted and bankrupt," the president was simply lying. By any standard, a system that is "exhausted and bankrupt" is a system that cannot pay a cent. By all accounts, including those of the White House, the Social Security Trust Fund will be able to pay full benefits at least through 2042, and by other government estimates, at least through 2052. After that, if not a single change is made to the program, the system will still be able to pay out 70 percent to 80 percent of benefits. Bankrupt? Not even close.

The president is abusing another misconception that has the ring of gospel: That the fewer people pay into Social Security, the harder it is for Social Security to meet its obligations. Bunk. In 1962, there were five workers for every Social Security beneficiary. Social Security ran a $1.3 billion deficit that year. In 2004, it was down to three workers for every Social Security beneficiary. Social Security ran a $151 billion surplus. True, lawmakers decided in 1977 and 1983 to expand the system from pay-as-you-go to include a savings account in preparation for the boomers' impact. But the surplus has exceeded expectations. It was expected to run out in 2029 just six years ago but just got a 13- or 23-year extension. What gives?

Simply this: It isn't just the number of workers paying into the system that matters. It is the kind of worker they are. A single engineer making $90,000 a year will contribute as much money to Social Security as eight burger-flippers making minimum wage.

But when the president turns to calculating Social Security's future health, he bases his assumptions of economic growth on the Social Security Administration's notoriously pessimistic calculations: An average annual growth of 1.8 percent over the next 20 years, an annual average worsening to 1.3 percent after that (the last 20 years' average was 2.6 percent) and anemic wage growth.

The reality is that between new immigrants and a fertility rate well above Europe's, which together are projected to raise America's population close to half a billion by 2050, and an economic growth rate matching the average of the last 20 years, Social Security's future is assured well past 2042 without a single change in current law. A crisis is indeed facing Social Security. It isn't bankruptcy. It is President Bush's proposed thievery, on Wall Street's behalf and with voodoo calculations, of the nation's most successful and functional government program.

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