There is No Crisis

by Chris Bowers, Tue Jan 18, 2005 at 05:53:08 PM EST

I wrote recently that the time for talk on Social Security is over. In keeping with the promise of action and the power of the netroots, tonight BlogPac is unveiling its first major action to fight Bush's attempt to destroy the most successful program in the history of the United States. This action will be centered around the newly launched website, There Is No Crisis, and will begin by contacting over 30,000 journalists on the eve of Bush's corporate fueled inauguration. I am asking you to join us in this fight, which will be waged relentlessly from this moment forward.

Dave Johnson describes There Is No Crisis as follows:

ThereIsNoCrisis.com is intended as a fact repository and an initiator of action on this issue. It will help you with letters to editors, FAQs, links to articles, and, of course, a blog. The site will be promoted through a press and media campaign, including radio ads (which you can hear on the site(...) I'm asking my readers to send an e-mail to your list, asking people to visit ThereIsNoCrisis.com. The site will also feature, among other things, rapid response, fact-checking, Google-bombing, links to allied organizations, printable resources, fainthearted faction updates, and new ads when they are ready.

The time for talk is indeed over, and I am asking you to join BlogPac in the fight to save Social Security from lying, rampaging conservatives. Please, send an e-mail to your list, asking people to visit ThereIsNoCrisis.com. There will be lots more to come on this soon.

Tags: Activism (all tags)

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Count me in

The facts are clear, there is no other rational conclusion. If we can do anything to get the facts out to our useless RWCM, I think we should go for it.

by Gary Boatwright 2005-01-18 06:02PM | 0 recs

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Re: Count me in

Yes, the facts are clear.

And you are running away from them.

by John Rogers 2005-01-19 03:39PM | 0 recs

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I'll let our county party list

know about the website. Hopefully some will signup. A bunch are probably drawing SS.

by Pounder 2005-01-18 06:22PM | 0 recs

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I'm so there...

I will deliver my 20 loyal CB readers to the fight.

Corked Bats, because who needs numbers?

by Garemko 2005-01-18 06:22PM | 0 recs

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P2P -- no better way

There's a good basic article online here, a Rolling Stone interview with Paul Krugman titled "The Fake Crisis", and I e-mailed it this morning to my 26 year old niece. Those of us who eat, drink, and sleep policy sometimes forget what it's like to be a beginner, and I think that article would be good in an information packet, great for people who don't read beyond the headlines but whose lives will be drastically different if Bush isn't stopped.

Someone should contact Rolling Stone for permission to reprint this; If I were strategizing for the Democratic Party, I would do it myself.

by Jeany 2005-01-18 07:34PM | 0 recs

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Another great source

A Question of Numbers from this Sundays NYT Magazine cover story. The real meat is on page three.

The rest of the article explains the real motives of privatizers. They have always hated Social Security, and the notion that it is actually fully funded drives them this close to insanity. We are rocking their world view. And about time.

by Bruce Webb 2005-01-19 04:23AM | 0 recs

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No crisis? Just keep telling yourself that.

You are entitled to your own opinions, but you are not entitled to your own facts...

In the years 2010-2025, 77 million people - 1 out of four citizens of the US - will begin collecting Social Security payments. By 2030, we will be at the point for where every retiree, there be only two workers(In the '40's, there were around 16).

These workers will no longer be paying the Social Security payroll tax, so the revenue generated by this tax is not liley to increase much during that time, even if you assume - as many of you (strangely) do - that the economy Bush is overseeing currently is likely to soar into the next decade with 3-4% year-on-year growth....(I'm a littel more skeptical of our prospects).

Many say that the Trust Fund will save us. We will just begin tapping inot all that money and we will be home free! But when pressed, they acknowledge that the "Trust Fund" has already been spent: it is IOU to the Boomers. So it is more money that we must pay into Social Security.

These Social Security liabilities must be added to the government's other liabilities: a huge one in Medicare (which no one is addressing)and the interest that we must pay on the national debt.

Just keep telling yourselves....There is no crisis! There is no crisis!

I wish you were right.

by John Rogers 2005-01-19 12:56AM | 0 recs

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Like Social Security never heard of Demography

Rogers, all those numbers are built into the models. God stopped making Boomers in 1964 and the actuaries and demographers that produce the tables of graphs that stuff the 225 pages of the Current Report are perfectly aware of their existence.

People who unleash "demographic bulge" and "covered worker ratio" like it is going to be some huge surprise to those of us who actually have been reading the Reports, still less to those that produce them need to ponder what the ultimate source of those "77 million" and "2030" numbers and dates. Yup, the same exact Reports that put out the numbers needed to fill the gap and solve the "crisis".

John, there are not two data sets at work here. We are working from the privatizers' Bible. And the Chapters and Verses are just not telling the story they want them to. Tough.

by Bruce Webb 2005-01-19 04:17AM | 0 recs

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Re: Like Social Security never heard of Demography

Why don't you refer to somthing I can read? I've given you the CBO and GAO and the SSA...

You keep talking about some Current Report....

Current Report of What? "Why Social Security Will Be Just Fine (At Least Until I Die...)?"

by John Rogers 2005-01-19 07:24AM | 0 recs

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Re: No crisis? Just keep telling yourself that.

[Y]ou are not entitled to your own facts.

But apparently right-wingers are.

Already accounted for in the 1983 SS reforms. Anyone who says otherwise is lying.

These workers will no longer be paying the Social Security payroll tax....

Only if the rightwingers get their way! Bush is actually perpetrating a double lie - not only is there no problem with the present system, but his proposal will actually cause the very problem it's supposed to be solving, by diverting nearly half the payroll tax coming into the system!

... the economy Bush is overseeing currently is likely to soar into the next decade with 3-4% year-on-year growth....(I'm a littel more skeptical of our prospects).

Thankfully, Bush will be gone in 2008, so historic rates of economic growth can resume. And we only need 2.8%, not 3-4%. What orifice are you pulling your figures out of?

... the "Trust Fund" has already been spent: it is IOU to the Boomers.

Let's see. I have a mortgage, an auto loan, and several credit cards with balances. And you know what? The money I've borrowed has already been spent, on my house, car, and other items. So by you're logic, I'm bankrupt. Those banks needn't bother sending me monthly bills anymore, because I can't possibly pay them back - the money has already been spent!

Well, that's the kind of "brain-damaged" logic you need to buy this whopper. But like I said, right-wingers are apparently entitled to their own "facts." Oh, and everything's just hunky-dory for the Iraqi election, too.

These Social Security liabilities must be added to the government's other liabilities: a huge one in Medicare (which no one is addressing)and the interest that we must pay on the national debt.

Let me get this straight. Bush creates huge deficits with his tax cuts and military spending, and huge Medicare liabilities with his Big Pharma Campaign Contribution Payback bill (aka the Medicare drug benefit), so the only logical thing to do is ... cut Social Security?? Wouldn't it make more sense to fix what Bush has screwed up, rather than robbing future retirees to pay for it?

Just keep telling yourself: Bush is all-knowing! Bush is all-powerful! Everything Bush does is wonderful!

Either that, or at long last, pull your head out.

by Mathwiz 2005-01-19 10:16AM | 0 recs

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Re: No crisis? Just keep telling yourself that.

Intersting stuff, Mathwiz. And you be OK if only your conclusions weren't at odds with the Social Security Trustees, the Government Accounting Office, the Bureau of Economic Statisics and Congressional Budget Office.

You see, they see a major problem.

But I'm sure Bush got to them, right?

Except they have been saying the same thing for two decades.

by John Rogers 2005-01-19 03:35PM | 0 recs

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That's comforting, Bruce...

But there is a problem: the Government Accounting Office and the Congresional Budget Office both say there IS a problem - and they have been saying so for decades.

by John Rogers 2005-01-19 04:33AM | 0 recs

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When Clinton entered office

We were faced with deficits "as far as the eye can see" and Medicare was predicted to be broke in 1999. A little something called "reality" intervened. It really doesn't matter what decades of SSA and CBO projections said if the actual numbers came in above their targets. They did and they continue to do so. The deficits were turned to surpluses and Medicare's exhaustion date was shoved out 20 years. You are just wearing blinders. The numbers move in response to economic reality. We beat the predictions and the numbers move out. We can argue whether or not Social Security was in "crisis" when Clinton and Gore evoked the "lockbox" language. But that is totally immaterial to the subject at hand. The economy grew and continues to grow at a rate higher than needed to fill the gap. We are dwelling in 2005 and not in 1997 nor in 1982 and we are dealing with today's reality and last year's Report.

The economy did not grow at 2.7% in 2004 and no amount of dodging will prevent the dates in this chart from moving out in time: EPI: Changes in the Trustees projections over time

It isn't broke until you show me numbers that show that it is. I don't doubt the integrity of the professionals in the Office of the Acturary, but if they called it wrong, they called it wrong.

There was a problem. It was a crisis in 1982, we were days from insolvency, it was a small problem in 1993, we had one year of reserve in the Trust Fund, but by the end of 2003 we had three years of reserve banked.
http://www.ssa.gov/OACT/TR/TR04/VI_cyoper_history.html#wp96419

What you are attempting to do is to take static, and frankly stagnant, arguments and apply them to a dynamic situation. The earth is moving under your feet. Sorry if that is disorienting.

by Bruce Webb 2005-01-19 05:31AM | 0 recs

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Re: When Clinton entered office

You keep mentioning the amount "in reserve" in the "trust fund." Stop it. You know better. You've told me you know that, and there's no point perpetuating that lie any further.

Your point about economic projections is well taken, but you show an extrordinary degree of optimism about the economic future of this country. You sound like a pro-growth Republican: after all, pro-growth policies are low taxes, low government spending and low regulation...

George Bush says we will grow out of our budget deficit. If I believe you, I should believe him. Shouldn't I?

But yes, technically we can grow out of problems like this.

But we have to grow really well and really fast.

Productivity and employment levels have to soar to get the point where every two workers can support a senior. Incomes must really grow for every worker. Growth in payroll tax revenue must exceed not only economic growth; it must counteract the fact that around 50 million payroll-tax paying Americans (in the prime earning years, thus paying the most payroll taxes of their careers) will be leaving the workforce and paying no more payroll taxes. (This is why payroll tax revenue is likely to be flat, no matter what happens in the economy (according to the GAO, the CBO and the SSA)).

Following that dream is not an economic plan; that's suicide.

Or so says the people who study this stuff full time: the CBO, the GAO, the Federal Reserve, the treasury department, the Social Secuirty trustees...

Bill Clinton.

Interesting you should bring him up. What does he think about this? :

On Feb. 9, 1998, Mr. Clinton delivered a speech at Georgetown University devoted to "sav[ing] Social Security for the 21st century" and explaining "why it is so important" to do so.
Referring to a then-recent poll revealing that "young people in the generation of the students here felt it was far more likely that they would see a UFO than that they would draw Social Security," Mr. Clinton warned seven years ago about "the looming fiscal crisis in Social Security." He acknowledged to the students that "every one of you know that the Social Security system is not sound for the long term."
Elaborating, Mr. Clinton argued: "This fiscal crisis in Social Security affects every generation. We know that the Social Security trust fund is fine for another few decades. But if it gets in trouble and we don't deal with it, then it not only affects the generation of the baby boomers . . . when they retire; it [also] raises the question of whether they will have enough to live on by unfairly burdening their children, and, therefore, unfairly burdening their children's ability to raise their grandchildren." What did Mr. Clinton think about this? "That would be unconscionable," he said, "especially since, if you move now, we can do less and have a bigger impact." That was seven years ago.
Mr. Clinton then listed the consequences of failing to address "the looming fiscal crisis in Social Security." Addressing the students, he said: "If [we] don't do anything, one of two things will happen -- either [Social Security] will go broke and you won't ever get [the benefits you are promised]. Or if we wait too long to fix it, the burden on society of taking care of [the baby boomers'] Social Security obligations will lower your income and lower your ability to take care of your children to a degree most of us who are your parents think would be horribly wrong and unfair to you and unfair to the future prospects of the United States."

Jeez, I guess the Bush people got to him with word of their fake little crisis.

Seven years ago.

And what the people who worked with Clinton? What does Alan Greenspan think of all the lies being circulated about Social Security insolvency? Or Leon Panetta? Or Robert Rubin?

You don't really want to know.

You prefer to take it from books like "Why Social Security Is Safe and Secure (At Least Until I Die)" by Ebenezer Cranky.

That's sad. Eventually the truth about this program (and Medicare) will get out.

by John Rogers 2005-01-19 07:15AM | 0 recs

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2.1% is not "really fast"

I am not putting this up for you, you obviously are simply making whatever talking points you can. But for everyone else, examine the numbers of the Low Cost Alternative, determine for yourself if the following string of productivity numbers is some difficult target:

2004 2.8% (oops reality turned in 4.0%)
2005 2.1%
2006 2.2%
2007 2.2%
2008 2.1%
2009 2.0%
2010 2.0%
2001 and beyond 1.9%

This is all it takes to produce a fully funded Trust Fund with a five year reserve. And it doesn't matter what Clinton said in some speech years ago, it wouldn't matter what Clinton says in a speech tomorrow. There is rhetoric and there is numbers and no amount of spin is going to make the latter go away.
What is the Low Cost Alternative? What does it mean? Disclaimer: this links to my site. But if you like Social Security numbers, I have supplied a whole smorgasbord.

And John. Why won't you admit that the economy was different seven years ago? Wake up, its 2005.

by Bruce Webb 2005-01-20 04:09AM | 0 recs

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Re: 2.1% is not "really fast"

Why don't you admit that even a steller growth will not make up for the fact that 20-25% of workers will stop paying payroll tax entirely during a 15 year period?

The pros know this. Here are the SS trustees:

"The program continues to fail our long-range test of close actuarial balance by a wide margin. Projected OASDI tax income will begin to fall short of outlays in 2018 and will be sufficient to finance only 73 percent of scheduled annual benefits by 2042, when the combined OASDI trust fund is projected to be exhausted."
(Keep in mind that this lovely scenario takes place even as government spends trillions in curretly unbudgeted money - to pay back the bonds of the Social Security "trust fund.")

Here's the Government Accounting Office:

"GAO's simulations lead to an overarching conclusion: current fiscal policy is unsustainable over the long term. Absent reform of federal retirement and health programs for the elderly--including Social Security, Medicare, and Medicaid--federal budgetary flexibility will become increasingly constrained. Assuming no changes to projected benefits or revenues, spending on these entitlements will drive increasingly large, persistent, and ultimately unsustainable federal deficits and debt as the baby boom generation retires. "

And, oh yeah, the Congressional Budget Office:

Only four approaches to narrowing that gap exist, and each of those approaches has drawbacks:
The benefits scheduled to be paid under current law could be reduced, lowering Social Security's contribution to the income of future beneficiaries.
The taxes that fund Social Security could be increased, drawing additional resources from the economy to the program.
The resources consumed by other federal activities could be cut to make up for the shortfall in Social Security. However, the aging of the U.S. population and increases in medical costs will also lead to higher costs for other entitlement programs, most notably Medicare and Medicaid.
Federal borrowing could be increased, which would also draw additional resources from the economy to Social Security. But that borrowing would need to be repaid by future generations, either through higher taxes or lower spending.
Any changes to Social Security will have to be made in the context of the pressures on the total federal budget. CBO projects that spending for government health programs will grow even faster than spending for Social Security because of rising health care costs. In particular, increasing outlays for Medicare and Medicaid are projected to cause long-term shortfalls in the rest of the budget that will be even greater than Social Security's. Unless taxation reaches levels that are unprecedented in the United States, current spending policies are likely to result in an ever-growing burden of federal debt held by the public, which will have a corrosive and potentially contractionary effect on the economy."

But Bruce Webb says its all a conspiracy. Demographers know nothing; we will grow so fast that none of this matter. Bruce Webb knows there is no crisis.

Don't ask how.

He just knows.

by John Rogers 2005-01-20 05:13AM | 0 recs

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Re: That's comforting, Bruce...

The Social Security trustees say there might be a problem at some point between 2030 (the "Doomsday" scenario) and "never" (the "optimistic" scenario). 2042 is the projection for the "intermediate" scenario, but for the past decade, the "optimistic" scenario has consistenly been the most accurate one.

As a result, the projection for the trust fund running out has continually receded further and further into the future. In 1997, they said the trust fund would run out in 32 years; i.e., by 2029. Now, they're saying it'll run out in 38 years - by 2042. Funny how the "crisis" keeps receding even faster than we're approaching it!

The CBO says the trust fund will last until 2052. I find that projection a bit more believable, but even if the 2042 date is - for once - correct, it would seem we have plenty of time. Why do we need to fix the problem right now, when government is controlled by a bunch of radicals who'd like nothing better than to utterly destroy Social Security? What's the rush?

The answer, of course, is that right now, government is controlled by a bunch of radicals who'd like nothing better than to utterly destroy Social Security. If we wait, we might end up with a President who'd fix Social Security rather than ruining it, and we surely don't want that!

by Mathwiz 2005-01-19 10:32AM | 0 recs

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Re: That's comforting, Bruce...

Mathwiz! You haven't discovered the little secret about the trust fund!

We have to pay for it!

Saying the "trust fund" will take car of things is like saying my mortgage will pay off my credit card bill.

Bu....uh...your mortgage is just another bill....

by John Rogers 2005-01-19 03:38PM | 0 recs

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Here's a taste of reality

"Over the next few decades, the nation's fiscal outlook will be shaped largely by demographics and health care costs. As the baby boom generation retires, federal spending on retirement and health programs--Social Security, Medicare, and Medicaid--will grow dramatically. A range of other federal fiscal commitments, some explicit and some representing implicit public expectations, also bind the nation's fiscal future. Absent policy change, a growing imbalance between expected federal spending and tax revenues will mean escalating and ultimately unsustainable federal deficits and debt."

From the Government Accounting Office. ( http://www.gao.gov/special.pubs/longterm/ )

by John Rogers 2005-01-19 04:37AM | 0 recs

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Re: Here's a taste of reality

Define over the next few decades. Explain why government bonds owed to the SSA are worth nothing, whereas those owed to the rest of the world are worth something. Explain why privatization is a solution when simply raising the earnings cap would solve most of these issues. As you quoted the GAO report, I don't see statistics that demand privatization of anything. Explain why you aren't looking at the UK's experience with privatization, so that you have a model to compare your fear mongering with. Explain yourself.

by Carol 2005-01-19 05:14AM | 0 recs

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Re: Here's a taste of reality

I never said government bonds are worth nothing. I said they must be repaid. REPAID from the Treasury Department to the SSA. The government loaned the money to itself. The "trust fund" is not an asset; it is a expensive liability.

The government really had to lend the money to itself: it can't just stash away trillions of dollars in cash. Had this money been in private accounts, that never would have happened.

Instead of boomers trying to get the government to repay them their money with interest, they would have their money in an account, like a 401K or an IRA.

As for privatization in Britain, with trains it has been a disaster. But public ownership in most things has been worse.

by John Rogers 2005-01-19 06:07AM | 0 recs

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Re: Here's a taste of reality

I never said government bonds are worth nothing. I said they must be repaid.

Actually, this is what you said: "... the 'Trust Fund' has already been spent: it is IOU to the Boomers."

It's true you didn't use the exact words, "worth nothing," but that was the clear implication.

Typical Rethug: When caught lying or otherwise saying something completely ridiculous, lie about what you said! Are you really Vice-President Cheney, by any chance?

The "trust fund" is not an asset; it is a expensive liability.

Either you don't know much accounting or you are being deliberately thick-skulled (again). Everything that is a liability to someone is an asset to someone else. Treasury bonds are a liability to the Treasury, by definition. But they are also a valuable asset to the bondholders, whether Social Security or other investors.

As I've said many times, if we ever get to the point in this country where the Treasury can't honor its debt, Social Security will be the least of our problems. (See Argentina circa 2002.)

You can deny it until evil is eradicated from the planet, but anyone with half a brain (I know, that excludes you and the President, but bear with me) can see that the best way to reduce the risk of such a default is to reduce the deficit! Why some people are so easily bamboozled into believing that the problem is instead with Social Security is beyond me.

by Mathwiz 2005-01-19 11:05AM | 0 recs

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Re: Here's a taste of reality

Let me get this straight: you misquote, attack for me what I didn't say, admit all this but say that I implied what you thought I meant, and then you call me a liar?

As for the "trust fund," we will pay back the money. "Pay back" are the operative words. The "trust fund" bonds will cost money to redeem; the "trust fund" is going to reescue SS.

by John Rogers 2005-01-19 11:24PM | 0 recs

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Re: Here's a taste of reality

Herein lies the rub:

a growing imbalance between expected federal spending and tax revenues

TAX CUTS HURT AMERICA ! ! ! ! !

This is man made desaster and man can undo it by halting the tax cuts.

by Parker 2005-01-19 05:26AM | 0 recs

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Re: Here's a taste of reality

Your argument would be compelling BUT...

Social Security is meant to be ENTIRELY funded by the payroll tax, and the payroll tax wasn't cut.(If Bush had tried, he would have been defudnding Social Security - imagine the howls)

Many Americans pay nothing but their payroll tax, and because the payroll tax wasn't cut, the tax cuts went to people who pay income tax (in addition to the payroll tax).

That's how tax cuts went to the rich. You argue all you want about how bad the tax cuts are, but the Social Security crisis is the result of demographics, political cowardice and poor planning. We seen this coming for years.

by John Rogers 2005-01-19 06:00AM | 0 recs

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So what is your problem???

You "seen" what coming???

by Parker 2005-01-19 06:26AM | 0 recs

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Re: So what is your problem???

I seen it, and I intends to solves it.

by John Rogers 2005-01-19 06:43AM | 0 recs

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Bush is the only crisis here

There is no crisis... except that created by allowing Bush to get anywhere near Social Security.

While there is no acute solvency "crisis" facing Social Security today, the mere fact that Bush is aiming his Bushwacker policy machetes at this largest and most successful of FDR's New Deal programs presents the only real crisis here. At risk is the very likely result of having "Social Security solvency" look very much like "Iraqi peace and freedom." The method proposed -- privatization -- is a recipe for dismantling Social Security, not fixing it.

Unfortunately, to merely enter into the fray with the battle cry of "There is no crisis" is to play the assertion / counter-assertion game instead of to strongly attack the Administration's proposal on the facts: the high administrative costs to manage tens of millions of tiny accounts, especially for a highly-mobile population; the built-in down-the-road benefit cuts which are projected to approach 48%; the several trillion that the private account portion will cost to start up; the upward pressure on interest rates as the federal government is forced to borrow to fund current benefits in the absense of current worker contributions, the very real liklihood of rampant fraud and deceptive selling practices by Wall Streeters... just to name a few.

If it were to be made clear to citizens that the only result possible -- under such a scheme as is being proposed -- is the demise and dismantling of Social Security, and that this result is the deliberate, intentional and desired outcome of the Republican Party (and has been since 1935), then we might begin to approach having a real debate. The Republicans went after Social Security during Reagan's first term, and lost the Senate at the mid-term elections as a result. Now they're back, and they will only kill Social Security if they are allowed to do anything at all.

by PJBurke 2005-01-19 10:02AM | 0 recs

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Re: Bush is the only crisis here

PJ,

I might direct you to the GAO, the CBO, the Federal Reserve, the Treasury Department or the Social Security trustess. They think there is a crisis.

But you seem to have made up your mind.

by John Rogers 2005-01-19 03:41PM | 0 recs