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Social Security and Medicare Report

By Jeralyn, Section Economy
Posted on Tue May 12, 2009 at 07:32:09 PM EST
Tags: social security, medicare (all tags)
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A new report on Social Security and Medicare says they will begin paying out more than they take in in taxes sooner than expected. Social Security could be depleted by 2037.

2037 is ages from now. I think we should leave social security alone. I certainly don't want to pay more in social security taxes for reduced benefits, which is one suggestion made by the report:

Social Security could be brought into actuarial balance over the next 75 years with changes equivalent to an immediate 1.6 percent increase in the payroll tax (from a rate of 12.4 percent to 14.4 percent) or an immediate reduction in benefits of 13 percent or some combination of the two. Ensuring that the system remains solvent on a sustainable basis beyond the next 75 years would require larger changes because increasing longevity will result in people receiving benefits for ever longer periods of retirement.

[More....]

The social security problem is being caused by the recession, not benefits being paid out. So maybe that will turn around.

Here's what Ezra has to say. By the way, today is Ezra's last day at American Prospect, bookmark his new home at the Washington Post where he'll start blogging Monday.

If you have any thoughts on medicare and social security, here's a place to discuss them. I have no idea about the economics. I only know I've paid in for 40 years and I want my money out when the time comes, and not at a cut rate.

As for the Senators who are proposing "sin taxes" on sugary colas to pay for health care, they need to get their heads out of the sand. All that will do, like increased cigarette taxes, is further tax the poor who can least afford it while not reducing consumption.

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    So far, the best article I've read (5.00 / 8) (#1)
    by Anne on Tue May 12, 2009 at 09:31:20 PM EST
    on this is over at Salon, by Michael Lind; it's worth a read:

    On Tuesday, May 12, the trustees who oversee Social Security and Medicare will issue their annual report. I don't know what will be in the report. But I do know what the response will be. Conservatives, libertarians and center-right Democrats will take whatever the report says as evidence that there is an "entitlement crisis," which should require us not only to address spiraling healthcare costs (a genuine issue, affecting the private sector as well as Medicare and Medicaid) but also the alleged "crisis" of Social Security (an imaginary problem).

    The coalition of libertarian zealots, Jeffersonian conservatives, center-right Democrats and bankers and brokers who would like to earn fees or commissions from the diversion of Social Security payroll taxes into IRAs recycles the same arguments against Social Security, rain or shine, boom or bust. They've been doing it for more than a quarter-century, ever since a couple of libertarians wrote up a guide for small-government conservatives on how to spread doubts about a popular, solvent and effective entitlement. These tried-and-true arguments will be dusted off and dragged through the media once again, after the latest Social Security Trustees' report is published. Among the bogus arguments you can expect:

    He then goes on to counter the arguments very effectively.

    I do not want Obama, or anyone else, to "save" Social Security.

    Absolutely. I am so sick (5.00 / 3) (#3)
    by sallywally on Tue May 12, 2009 at 09:55:11 PM EST
    of people spitting out this mantra about how there's a problem. I hope (but don't expect) that Obama will not buy this line of crap.

    Parent
    Demographically (none / 0) (#5)
    by Socraticsilence on Tue May 12, 2009 at 11:22:08 PM EST
    The retirement of the baby boom generation will cause a problem- the workforce may well be smaller than the retirees, and longevity has also increased the burden on