Is this what he meant by “fuzzy math?”
President Bush used much of Tuesday night’s State of the Union address to champion his Social Security privatization plan. The President repeated his past claims that by 2042 the system would be "exhausted and bankrupt".
As we have reported in the past, the truth is that the Congressional Budget Office says Social Security can pay out the current full benefit rates until 2052 (2042 if you use the Social Security Administration’s numbers) and 80% of the current rates thereafter. It seems as though we have a bit of a discrepancy.
The hope of privatization supporters is to scare the public, particularly young Americans, into fearing that if something is not drastically changed, our generation will grow old in poverty. Its a lot easier to talk people into giving something up if they don't think they're going to get it in the first place.
That's why we think its so important for you to understand the real financial situation. Anyone who really thinks they are going to get to get nothing out of Social Security is going to get ripped off! The politicians are running a game on you.
There are good questions regarding how much of a change is needed. But first, it may be best to pose the question of whether the Bush plan, drastic as it may be, will improve or harm our generation’s future. Let us examine.
Social Security Administration numbers crunchers estimate that under the Bush plan, Social Security benefits will drop to 20% of pre-retirement earnings by 2075 – that number is 42% today. That means your basic guarantee only covers 20% of what you earned while you were working. And it continues to fall after that.
The Bush plan would tie benefits to prices rather than to wages as the current system does. Since wages rise faster than prices (creating a continued rise in standard of living), this would result in a relatively decreased standard of living for our generation when we retire, and for every succeeding generation.
Proponents argue that private investment will yield greater returns than public insurance. Yet, the privatized pension system in Chile, which the Bush administration holds up as a model, has left many of its participants in worse economic positions than they would have been with a traditional social security-type system. The best you can say about it is that its a gamble.
The Bush Administration would like the equation to be this simple: An uncertain future for Social Security equals need for change. Private is better than public.
But if it were that simple, MIT would offer a course in Fuzzy Math.
-Miles Granderson
As we have reported in the past, the truth is that the Congressional Budget Office says Social Security can pay out the current full benefit rates until 2052 (2042 if you use the Social Security Administration’s numbers) and 80% of the current rates thereafter. It seems as though we have a bit of a discrepancy.
The hope of privatization supporters is to scare the public, particularly young Americans, into fearing that if something is not drastically changed, our generation will grow old in poverty. Its a lot easier to talk people into giving something up if they don't think they're going to get it in the first place.
That's why we think its so important for you to understand the real financial situation. Anyone who really thinks they are going to get to get nothing out of Social Security is going to get ripped off! The politicians are running a game on you.
There are good questions regarding how much of a change is needed. But first, it may be best to pose the question of whether the Bush plan, drastic as it may be, will improve or harm our generation’s future. Let us examine.
Social Security Administration numbers crunchers estimate that under the Bush plan, Social Security benefits will drop to 20% of pre-retirement earnings by 2075 – that number is 42% today. That means your basic guarantee only covers 20% of what you earned while you were working. And it continues to fall after that.
The Bush plan would tie benefits to prices rather than to wages as the current system does. Since wages rise faster than prices (creating a continued rise in standard of living), this would result in a relatively decreased standard of living for our generation when we retire, and for every succeeding generation.
Proponents argue that private investment will yield greater returns than public insurance. Yet, the privatized pension system in Chile, which the Bush administration holds up as a model, has left many of its participants in worse economic positions than they would have been with a traditional social security-type system. The best you can say about it is that its a gamble.
The Bush Administration would like the equation to be this simple: An uncertain future for Social Security equals need for change. Private is better than public.
But if it were that simple, MIT would offer a course in Fuzzy Math.
-Miles Granderson
posted by RTV Street Report at 2:34 AM
2 Comments:
As we have reported in the past, the truth is that the Congressional Budget Office says Social Security can pay out the current full benefit rates until 2052 (2042 if you use the Social Security Administration’s numbers) and 80% of the current rates thereafter. It seems as though we have a bit of a discrepancy.I'll say, there's a discrepancy. You are using meaningless numbers that try to feed the myth that there is a bank account somewhere called the "Social Security Trust Fund" that contains trillions of dollars stored up to pay benefits after 2018, when the system starts paying out more than it takes in. As it has been widely reported, and as you are no doubt aware, the Social Security Trust Fund is a filing cabinet in West Virginia that contains an bonds that replaced the taxes earmarked for Social Security that the government spent for other purposes over the years.
When these bonds are redeemed, beginning in 2018, the government must come up with that money from somewhere. Since RTV is fond of the CBO numbers, they should already know that CBO has stated that by 2025, Social Security will be eating a $100 billion hole in the budget every year. That means $100 billion that is unavailable for other programs, like education, housing assistance, national defense. Take your pick.
From the looks of it, RTV and AARP have fuzzy math down pat. As a member of the "hip-hop" generation that Rock the Vote is supposed to be looking out for I am outraged that you are selling my future down the river. It is time that our so-called advocates were honest with us and the American people about their goals and objectives. Protecting my generation is clearly not one of them.
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