The Social Security is broken Myth

Periodically we hear news that the Social Security system is going to be bankrupt in the near future and Congress needs to act. Solutions to fix the system seem always have the component of dismantling the program as part of it.

The latest instalment is a lead story in USA TODAY from October9, 2007 about the impending retirement of the first baby boomers.

Leading that pack will be Kathleen Casey-Kirschling generally accepted as the "USA's first baby boomer"

The article says: "Casey-Kirschling ... won't bankrupt the Social Security system by taking early retirement at 63. But after her, the deluge: 80 million Americans born from 1946 to 1964 who could qualify ... during the next 22 years."

The article goes on to claim: The boomer retirements have demographers, actuaries and economists worried as they prepare for and estimated $ 50 trillion in future obligations over the next 75 years."

" 'This' says Brian Riedl of the conservative Heritage Foundation, 'is the single greatest economic challenge of our area.' "

So the White House is lunching the "Fiscal Wake-Up Tour" A group of policy watchdogs is traveling around the country and hold Town Hall Meetings, trying to make the public aware of the need to action.

They paint a gruesome picture about the future claiming that fixing the SS system solely with higher taxes or cuts in spending would mean a 16% increase in payroll tax or a 13% cut in benefits. And I bet that the republican plan of private investment accounts will be talked about at length.

Not to long ago I read an interesting book called "Greenspan's Fraud " by Ravi Batra and here is what he has to say: "...fraud in a nutshell is this: Support tax cuts for the wealthy and ask the average worker to make sacrifices, using projections not facts." and "the real crisis [is] in the federal budget, but the government [wants] to solve the phony Social Security crisis"

So why is the crisis phony? To summarize the main points. Republicans always want to cut taxes which benefits the wealthy proportionally more then the working class and when then the government can't pay for it's obligations they scream "it's the entitlement programs" But do they offer real solutions? Do they stop spending the money that is coming in for SS on tax cuts for the rich? Or the war in Iraq? No they claim to fix it we should divert even more money from the SS system and have people invest in wallstreet, which of cause means billions in fees to the working class by investment firms.

Here is a simple solution: right now income up to $ 95,000 is taxed for social security anything beyond that is not, again great for the wealthy, so tax all income, period. And while we are at it tax all income equally, I do not care how you made your money, if it is new income (investment, labor inheritance) tax it equally. There problem solved.

Read Counter point here and here .