The Obama Administration Could Well Cut Your Social Security
The Social Security trustee’s panel released a report today discussing the “worsening financial picture” of both Social Security and Medicare, because of the sluggish economic recovery. According to the report, the Medicare hospital insurance fund will now be exhausted in 2024, five years earlier than last year’s estimate. Meanwhile, the trustees say the Social Security trust fund will be exhausted in 2036, one year earlier than before. Sounds scary, right? Good thing the information released by the trustees is about as factual as The Da Vinci Code.
A few weeks ago I wrote about how the Social Security projections that we hear in the media are based on overly pessimistic actuarial assumptions about the future of the American economy. I found this out thanks to some excellent research done by Manny Goldstein at Democratic Underground. Manny discovered that the numbers the trustee panel used in their report last year to calculate that the Social Security trust fund would be exhausted in 2037 was based on 2.1% projected GDP growth per year for the US economy. Meanwhile, average GDP growth since 1960 has been 3.2% in the United States!
Now, based on the slow economic growth in 2010, the same trustee panel that used ridiculously pessimistic growth projections in last year’s report, says that Social Security’s trust fund will run out a year earlier. The economy grew 2.9% in 2010; if the economy continues to grow at that average rate, Social Security will be solvent for the next 75 years. If average economic growth really fell to a horribly low 2.1% of GDP, as the Social Security trustee panel thinks it will, we would have much bigger economic problems than maintaining the solvency of Social Security past 2036. So why is the trustee panel trying to make it seem like Social Security is in crisis when it isn’t?
According to the chair of the trustee’s panel, Treasury Secretary Tim Geithner (pictured), the new report underscores:
…the need to act sooner rather than later to make reforms to our entitlement programs. … We should not wait for the trust funds to be exhausted to make the reforms necessary to protect our current and future retirees.
Anyone who follows the politics behind Social Security closely knows that “reform” is a euphemism for cutting benefits. It was Barack Obama who appointed the Social Security trustee’s panel, it was Barack Obama who decided that a Wall Street shill like Tim Geithner should be the chair of that panel, and it is Barack Obama’s panel that is trying to lie to the American people about the financial health of Social Security.
The only possible explanation I have for why the Obama administration wants the average American to believe that Social Security is in crisis when it isn’t is because he and his administration want to cut benefits so they funnel more of the enormous payroll tax revenues to their criminal friends on Wall Street. So when it comes to Social Security, don’t believe the alarmist hype. Everyone’s money is in Social Security and we can’t let corrupt politicians and bureaucrats from either political party take it from us.Click here for reuse options!
Copyright 2011 Liberaland