Fact & Fiction on Social Security

I’m writing a series of posts as a blogging fellow for the Strengthen Social Security Campaign, a coalition of more than 270 national and state organizations.

Republicans (and some Democrats) have started a full-scale assault on the social safety net that has made America the great country that it is. They are doing what they can to dismantle the safety net and leave the masses to the whims of the so-called “free” market. This market doesn’t actually exist in the real world and it never has on any significant level. The market that exists in the U.S. is rigged. Under the safety net, the market was “rigged” by government in favor of the people, particularly those who are in need. Republicans are seeking to change that and instead rig the market in favor of the rich and corporations. They can’t tell people that, so they are using all kinds of lies and falsehoods to convince people that what they are really doing is based on some higher philosophical principle, whether that be “keeping government off our backs” or allowing people to “keep their own money” or by attacking government programs by saying that they don’t work or can’t work or cost too much. Almost across the board, these arguments are almost always wrong.

I wanted to take a look at a few of these arguments they make and debunk them. None of this is new information, but I haven’t seen it talked about much on the Florida blogs and it’s been a while since I’ve seen the info in one easy-to-find, easily-digestible format.

It’s okay to cut Social Security since no one expects it to be around when they retire anyway: The program is a guarantee to the people who pay into it. They’ve earned the benefits it gives, they aren’t just a privilege.

Social Security is a big contributor to the deficit and debt: Social Security has not contributed a single sent to the deficit or debt. It currently has a $2.7 trillion surplus. That surplus will grow to $3.7 trillion by 2022. It is actually illegal for Social Security to go into deficit mode. The real causes of the deficit and debt growth are the Bush tax cuts, the recession, the wars in Iraq and Afghanistan, stimulus and recovery spending and the bank bailouts.

Times are tough, everyone has to share the sacrifice: Banks and other companies have received massive bailouts and taxes for the rich have been cut. Ending bailouts and making the rich pay their fair share would go much further towards fixing our economic problems than harming Social Security would. It would have added benefit of being the morally correct thing to do.

Social Security is bankrupt and in a crisis: Social Security is fully funded for the next 25 years. After that it can pay 77% of promosed benefits through 2085 and 74% after that, with no changes to the program as it is now.

There is no easy solution to fixing Social Security, so we have to do something difficult: There is a Social Security tax cap on people with wages more than $106,800 a year. If those people paid taxes on all of their income — like everyone else does — there would be no funding problems for Social Security. The program would be fully funded for at least the next 75 years.

The public favors changes and/or cuts to Social Security to reduce the deficit: 15% of the public does. 82% oppose cuts. Even 74% of Tea Party supporters oppose cuts. Similarly, large majorities of Americans oppose cuts to make the program solvent (67% oppose), oppose means testing the program (63%), oppose raising the retirement age to 69 (69%) and support eliminating the tax cap of $106,800 (66% support). The popular solution to potential future problems with Social Security is also the morally correct solution.

Continuing the payroll tax holiday is a good economic solution: The holiday increases corporate profits without stimulating hiring and cuts revenue coming into Social Security. Corporations don’t need a revenue boost. In the first quarter of 2011, they made a record $1.7 trillion in profits and the currently sit on a record $1.9 trillion in liquid assets. Corporations have more money than they’ve ever had and they aren’t hiring. Giving them more, in order to cut other programs, is a terrible idea. The holiday also is one of the worst ways possible to boost economic activity. Moody’s analytics says that extending unemployment benefits, increasing food stamps and providing direct aid to state governments all boost the economy significantly more than the payroll tax holiday.

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