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Wednesday, March 23, 2005
Social Security: Yes, the fix was in
The new Social Security report moves up by one year two key dates. 2017 is now the first year that the trust fund is tapped and 2041 is now the year the trust fund is exhausted. After that, payroll taxes will only fund 70 to 80% of promised benefits.Atrios highlights this key passage:
Assuming the Trustees' intermediate assumptions are realized, the deficit of 1.92 percent of payroll indicates that financial adequacy of the program for the next 75 years could be restored if the Social Security payroll tax were immediately and permanently increased from its current level of 12.4 percent (combined employee-employer shares) to 14.32 percent.
Privatizers will tell you that we should adopt the Galveston model, which, of course, no Republican has actually advocated. The Galveston plan costs 13.9% of total income -- just a smidge off the 14.32% that would be necessary to fully fund Social Security indefinitely. And, of course, the 14.32% is based on pessimistic economic forecasts.
Kevin Drum points us to Brad Plumer who notices that the forecast is actually full of really good news -- like the fact that future projected deficits have dramatically decreased.
So many shenanigans, so few educated bloggers to explain them to us.
