Tuesday, November 01, 2011

Is Social Security insolvent? — A reality check

Michael O'Hare at The Reality-Based Community reports:
Last week I polled my mostly-undergraduate policy design class at Berkeley as follows:

A. Social Security is in very serious financial trouble and probably won’t be there for my parents
B. Social Security is in financial trouble and probably won’t be there for me
C. Social Security is basically OK and just needs some minor adjustments.
In case you're unsure, the correct answer is clearly and unequivocally C.

It's true that Medicare is on a path toward financial unsustainability (a problem intensified, perhaps intentionally, by the way the Bush/Rove prescription drug plan was designed) and will require some serious reforms down the line. As Paul Krugman has pointed out, right-wingers often try to blur the two together by talking about Social-Security-and-Medicare as if they were a single pathological entity. But that's just a rhetorical trick. In fact, the Social Security system is quite solvent; it is not due to run into even slight financial difficulties for decades; and those potential problems could indeed be solved with "some minor adjustments".
The results were 66% B, 16% each A and C. This is a level of misinformation in an educated population that puts the capacity of democratic governance in doubt, and raises serious questions about whether mainline media are playing straight with us. Articles like the Washington Post piece dissected and hung out to dry by Dean Baker demand we resurrect language like “kept press” from back in the thirties.
The fact that 82% of O'Hare's students (not just random voters, but people taking a public policy class at a highly-ranked university) were so wildly off-base about this is a tribute to the effectiveness of a decades-long campaign of distortion and disinformation by right-wing politicians and propagandists, aided and abetted by widespread economic illiteracy among journalists and pundits. The point, of course, is to panic the electorate into letting them undermine, eviscerate, and eventually dismantle Social Security under the guise of "reforming" it.

So far they haven't been able to do that, but if they continue to bamboozle the public so successfully, they might pull it off sometime in the future—in which case Social Security really won't be there for these students when they retire. So it's important to make it clear that this whole Chicken Little story about the imminent collapse of the Social Security system (a "Ponzi scheme" and "a monstrous lie," according to Rick Perry) is simply bogus.

For a more concise version of (part of) the argument in Dean Baker's piece, you can see this post by Paul Krugman.

—Jeff Weintraub