Does Social Security Need to be Fixed?

Posted By Elgin Hushbeck

Democrats are saying that there is no problem with Social Security and that Bush proposal is merely and attempt to destroy the system. To some extent the Democrats are correct on the first part. Social Security is not a problem today, however it will be a huge problem in the future. The Wall Street Journal had a chart on in an editorial on Jan 5, 2005 (Article on paid site  ) showing the percentage of income taxes revenues it would take to make up for the funding short fall in SS and Medicare. The two programs combined are already paying out more than they bring in. By 2020 both will be in the red and there will be a combined shortfall equal to 28% of income tax revenues. By 2030, it will take over 50% and by 2070 it will take over 100% of income tax revenues. The sooner these problems are addressed, the easier it will be. If they had been address back in the 1980’s the change could have been made with little or no pain. Now we no longer have that luxury. The longer we wait, the more painful and difficult will be the changes.

Frankly I just do not think it is reasonable to ask our children to pay for SS and Medicare when there will only 2 workers for each retiree, plus pay back all the IOU’s from previous generations who raided the SS fund. We can lament about how it should not have been raided, but the simple fact is that it was, and by both parties. Sticking our collective heads in the sand and denying there is a problem is a sure way to make sure the system collapse completely.  

As for Bush wanting to destroy Social Security, it would be valid criticism if it were true, unfortunately, like so many liberal criticism, it is based more on their own rhetoric than on reality. The system Bush is proposing is not some pie in the sky theory. It has already been put into practice with great success by Chile. They switched over in the 80s and not only has it worked very well, it worked better than expected. Not only has it given those who switch to the new system more money to retire on, it also allowed them to increase the payments to those who remained on the old system more than expected.  

On the other hand, just what is the Democratic plan for Social Security that will allow it to over come the massive shortfalls that are looming? Just how do they expect those that will be working in 2070, which will include the children of today, to pay all of Social Security and Medicate, plus the shortfall which will amount to the total revenues from income taxes in addition to all the other government programs, and still have any money to live on? Just what is the democrat plan? Currently the Democrats are saying there no problem and that we should just ignore it.

Jan 10th, 2005

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