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‘It turns out that the fiscal crisis of Social Security is grossly
exaggerated by its political enemies. The trustees [in the 2003 Social
Security Trustees’ Report] project Social
Security balances forward for 75 years. Their report uses pessimistic
assumptions of just 1.6%. Even so, the 75-year shortfall is projected at
just $3.8 trillion, or just 0.73% of gross domestic product over this
time. By contrast, the Bush tax cuts equal $8.7 trillion, or 1.68% of
GDP over 75 years, according to Peter Orszag of the Brookings Institution,
and new proposed tax cuts would push the cost to over $12 trillion.
‘[Using the Trustees’ projections] If the Bush tax cuts are
pared back by less than half, the money can be used to replenish Social
vaunted "crisis" disappears.
‘Whether to cut Social Security benefits for the 96% of Americans in the
system or reduce tax cuts for the top 2% is, of course, a political
‘All of the conservative proposals for restoring the Social Security
system’s health are different forms of cuts in benefits.
‘Raising the retirement age
is a reduction in benefits. So is fiddling with the cost-of-living formula.
Partial privatization is the most costly and intellectually dishonest
fix of all. Not only would it reduce the guaranteed part of the retire-
package, but it would require the government to borrow $2 trillion to
$4 trillion to
keep paying benefits to current retirees while payroll taxes of younger
Americans were diverted to new personal accounts.’
[Finally, An Honest Debate Business Week 03/15/2004 subscription]
Home » Social Security: It’s a Bush-made crisis