Arnold Williams (notebuyer) wrote,
Arnold Williams

Social Security Reform

When I was in college in the 1970s, I learned two things about social security:

1. The demographics don't work out: the number of workers in the workforce supporting the retirees has declined from 42, at the time that FDR proposed it (at that ratio, a brilliant plan) down to 3 to 1 today, and about 2 to 1 in 2050.  The plan is a "PAY AS YOU GO" plan, which leads to:

2. The "social security trust fund" is a fiction: the government borrowed it out as it came in, instead of investing it in things other than the government.

Neither of these has changed.  And anyone who denies either, (Paul Krugman comes to mind), should not be taken as speaking from an economic point of view (however smart he is in economics, that should not delude us into thinking he has any special expertise that he is employing until we check him against easily ascertainable facts -- wherever he contradicts easily ascertainable facts, he is no longer an expert, but a hack with pretensions to knowledge).  We have many words for people speaking outside of their expertise as if they were experts: they're not complimentary, especially when what they say violates simple logic.

Now, that doesn't mean that "we are in a crisis" -- that word implies that if we do nothing, we're in trouble in the next five years.  It takes longer than that to bankrupt the system: 2018 is the first year that inflows will not match outflows in the wrong direction.  But that brings up the next question: when is the appropriate time to address this?  If the demographic facts don't change, (they are long term realities), and there are no new sources of funds going into personal retirement, the problem is here now.

And what that means is that we need to start addressing it.  To the extent we can craft a solution now, a solution that we ease into is better than one that we craft when are at disaster's edge.  That makes sense. 

Those who say, "Why now rather than later?" are ignoring the fact that we must, as a society, adapt to facts as we learn and test them.

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