For once, the Times gets it right…

… at least, if you read no farther than the headline:

Social Security: It’s Worse Than You Think

Congress and President Obama have pushed through a relatively modest stopgap measure to avoid the “fiscal cliff,” but over the coming years, the United States will confront another huge cliff: Social Security….

For the first time in more than a quarter-century, Social Security ran a deficit in 2010: It spent $49 billion dollars more in benefits than it received in revenues, and drew from its trust funds to cover the shortfall. Those funds — a $2.7 trillion buffer built in anticipation of retiring baby boomers — will be exhausted by 2033, the government currently projects.

Now of course there is no such thing as a ‘Social Security trust fund.’ There’s no Scrooge McDuck money bin where all our derisory widow’s mites have accumulated over  the years. It’s an accountant’s jeu d’esprit: cumulating a certain category of payroll tax revenues and a certain category of government expenditures and subtracting the latter from the former.  So any time people start talking about the solvency of Social Security, it’s time to count the spoons and go long on cat-food futures.

The Times catfooders do not disappoint. They go on and float  some possible approaches to dealing with this entirely imaginary crisis:

tough choices have to be made. One option is to continue raising the retirement age, perhaps to as high as 69 or 70. While the full retirement age is gradually increasing to 67 (for people born in 1960 or later) from 65, this increase is not enough to counterbalance the gains in longevity.

A second option is to increase payroll taxes, for example by taxing wages over $113,700, the current earnings limit. A third is to limit the annual cost-of-living adjustments, possibly by changing how those adjustments are calculated. A fourth is to reduce benefits — for example, by lowering the initial benefits for workers whose lifetime wages are above the national average (currently $43,000 a year). Other choices, in numerous combinations, are possible, too.

One factor that might be considered is new research suggesting that retirement itself, although popular, may reduce life expectancy by breaking lifelong routines and disrupting deep social connections. One might question how much government policy should actively encourage retirement, as opposed to merely making it an option.

When I hear the phrase ‘tough choices,’ I go for my Browning. The choices are going to be made, and they’re going to be tough, but they’re not going to be tough on the people making the choices.

20 thoughts on “For once, the Times gets it right…

  1. The photo doesn’t quite work for me. The NYT analysis is shit, not tripe. The only real problem with the ‘trust fund’ is that the worker productivity gains of the last 30-35 years have been scraped into the income piles of a tiny minority of the wealthiest. This piling has put most of the productivity gains above the payroll tax limits. Had ordinary workers gotten a fair share of those gains, they would have been paid more and have paid more tax into the trust fund and everything would have been hunky dory.

    Michael Hudson has a whole different approach:

  2. “One factor that might be considered is new research suggesting that retirement itself, although popular, may reduce life expectancy by breaking lifelong routines and disrupting deep social connections.”

    My jaw dropped from reading that one. You’ve got to have a lot of balls to suggest that a lifetime of wage slavery inside the corporate machine is actually a good thing. Imagine the brutal consequences from severing those “deep social connections” and “lifelong routines”!

  3. The assumptions the SS administrators use to determine when the buffer funds will be exhausted (which doesn’t mean that the system will co kaput) are very conservative, and assume an economy as sluggish as ours during the Great Depression. And beyond this, the system could just pay retirees out of general tax revenues, which could be as great as the government cared to make them. Or if we stick to the payroll tax funding, just raise the upper income limit on which the tax is levied. Obama intends to fuck all present and future old people. Like all recent former presidents, maybe excepting Carter, he will be rich as Croesus. As will nearly every member of Congress. And the asshole liberals will go right along with him. What a bunch of dumb fucks we are to stand for this. Boy, after a lifetime of studying about work, that shit about retirement being deadly to our health really pissed me off. A lifetime of routines and deep social connections. Who are these people kidding? Look around, folks, where are these deep connections? And routines? Well, boredom must have advantages of which I wasn’t aware.

    • What if the system that’s designed to help support seniors and the retired for once didn’t actually make money for the government? That would be a bridge too far. A tax hike? Just who do you think Social Security is for?

      Obama intends to fuck all people. Seniors and Middle Easterners are just the easiest.

    • Doug Henwood interviewed somebody on his radio show the other day — I forget the name — who did a nice demolition job on all the unrealistic and contrived assumptions made in connection with the so-called SS ‘trust fund’. IIRC, one of them was that health care costs, as a percent of GNP, would continue to grow at present rates indefinitely, or for decades to come, anyway. But of course in a couple of decades there’ll be a lot fewer boomers.

  4. Taibbi on TARP etc.

    Most amusing chunk:
    “Even worse was the incredible episode in which bailout recipient AIG paid more than $1 million each to 73 employees of AIG Financial Products, the tiny unit widely blamed for having destroyed the insurance giant (and perhaps even triggered the whole crisis) with its reckless issuance of nearly half a trillion dollars in toxic credit-default swaps. The “retention bonuses,” paid after the bailout, went to 11 employees who no longer worked for AIG.”

  5. I may be the only one commenting who actually receives Social Security because I’m old enough. In fact, I’ve been old enough for ten years. My late husband was self-employed, so paid in more than others. I worked outside the home for 27 years and paid in. Before that,I raised four children, good people and decent citizens all. Should I feel some sense of milking the system? I will just as soon as Obama and all the other politicians and whoremasters–oh, I repeat myself–are as screwed as I believe my descendents are going to be..

    • I love me my SSB’s.

      Recall that earlier COLA adjustments have cost you about 20% of the benefits your parents would have received. Chained CPI will cost about one month’s benefits a year 20 years down the road.

      The economic elite has starved the trust fund for 30 years by claiming the money value of worker productivity increases for itself as dividends, capital gains, and ‘earned income’ above the FICA taxable limits. (I prance on without self awareness or embarrassment, my hobby horse clinched tightly between my thighs.) Average wage levels have been stagnant since Carter wore his cardigan by the fireside in his chilly White House.

      Do we milk the system? Consideration of *that* is not on the agenda until the *system* has been fixed, i.e. restored, not reformed.

      • I could get behind a drive to get as many people as possible on TANF, SSI, disability and unemployment. Overload the (state level, first) system the way the wobblies used to overload the jails.

        • The state wouldn’t suffer at all from your tactic; the people you get on the system will suffer instead.

          The state, faced with overloading, has no intention of dying of bloat. It reduces the benefits offered and the amounts people get. It refuses to hire more workers to meet growing demand. It doesn’t replace all the workers who quit in frustration.

          For almost four years I’ve been a DPW caseworker. My main job is to renew people’s food stamps and Medicaid during their eligibility reviews. Our caseloads, already killer, just keep getting heavier. There used to be seasonal workers (fall, winter) who dealt with LIHEAP applications. Costs have now been cut by adding LIHEAP to our caseloads. Our deadlines are now shot to hell. This is how the state will cope with greater burdens. And what will the average LIHEAP applicant be granted to meet his monstrous heating bills? One hundred dollars. Last year it was about three hundred dollars. Food stamp recipients used to be exempt from assets testing. The governor here in Pennsylvania has chosen to reinstate it. If you save up in the hope of trying to get out of the hole, your savings will get you disqualified from benefits. So you end up even worse off than before.

          As the numbers of benefit recipients grow, the time it takes to get them their benefits grows longer. The state will simply never acknowledge this. It insists that everything is the same as it ever was. It blames the workers who can’t possibly keep up with the stress. It never blames itself and never will.

          We’ve lost a good many caseworkers and clerical staff in the last few years. Only about half as many more have been hired to replace them. Some of us are already looking for other jobs. The pay is not bad, the best I’ve ever earned; but I really don’t know if I can keep doing this for even several more years. If I had a job in a paper clip factory, I would no longer give a fuck. Who cares if the shipment didn’t arrive ASAP?

          But it’s impossible to feel that way about this work. You’re faced with desperate people who, although they don’t see it this way, are struggling against each other to be next in line. People who come into the office; people who call, who fax, who mail, send voice messages, send online applications, call the customer service center, call senators and representatives. All these means of getting heard: but only the same inadequate number to hear them. So I’ve become one of those workers whom the public despises because I never answer my phone if I can help it. I’d never be able to get any work done if I did.

          I don’t write all this, however it reads, in order to kvetch. None of us has it easy. I only write to express my opinion that your tactic, appealing as it may sound, hasn’t a chance of working. Overload the system? They’ll see people die first. Why not? They see this already. Every day I disqualify people in need. They no longer pass the Gradgrindian standards of testing.

          Many of us workers are convinced we’re being set up for failure. We have a union, in other words. We’ll eventually be replaced with the private sector. It’s been tried in other states and has failed so miserably that it’s crawled back to the public sphere. Not that government ever feels bad about such debacles. It certainly doesn’t take the blame for them. The collapse of a public service is always edifying to the bastards-that-be. It proves that public service is a misbegotten whim.

          Why would the growing number of suffering people bring the state to cry uncle and croak? Why hasn’t it happened yet? Poor people have no clout; even less than they imagine. It’s not as if all that many of them vote, and why should they? They know better. They could all vote and it wouldn’t make a difference.

          One of my duties, in fact, is to ask people if they are registered to vote; and if not, would they like to be given a registration form? It’s almost beyond irony. The state actually implores them to vote. If elections achieved anything, we’d never be told to do this. Until the past year or so it only existed as an earnest recommendation. While talking to people, you might want to ask them if they’d like to register. But 2012, the very latest Most Important Election Ever, ramped up demands. Obama, we were meant to understand, was really putting the screws to the states about it. I guess he thinks he’s beloved of the people. We are now required to ask about voting in almost every transaction. The auditors will issue demerits (yes, auditors! demerits!) if we fail to do so. I feel like the world’s biggest schmo when I ask about voting. Some of the people I ask get fairly indignant. “What are you asking me that shit for? I’m here about my benefits.” Why indeed.

          • Right on target, Antonello. A dear relative of mine spent thirty — no, forty — years in the social services bureaucracy, and it’s uncanny how similar your narrative is to hers.

          • anto is right

            that tactic needs to be applied where the state response is helpful struggle

            a case i know of

            flood the NLRB with wagner act violations
            then blast them on all fronts for incompetence inadequacy pro boss structural bias etc etc

    • i will be up to later genertations to fight for their in terests

      its absurd
      as i think mjs suggests
      to look out beyond the next few years
      on any of this

      the present retireds need to go on the offensive
      —- i’m one —-
      not just try holding the ground they now stand on
      but attacking the “reforms” being implewmented TODAY

      like the roll back of full retirement two months a cohort

      the present cost of living index itself is a scam cooked up during
      the clinton years

      we need an old farts index

      we need to raid the trust funds now !!

      the only savings are storage
      and only more machines today
      can increase the output of tomorrow
      we can’t consume what we haven’t the capacity to produce

Leave a Reply