I was just on CNN’s “Your Money” show with host Ali Velshi this weekend, and among the topics was Social Security on its 75th anniversary, as they interviewed Michael Astrue, the Social Security commissioner.
Michael made all the right points about how “exhaustion” of the Social Security trust fund in 2037 does not mean Social Security goes away, but it does mean we have to consider ways to bring the program into better balance–the hard choices between benefit cuts, tax increases, or some combination of both.
But I wish he (and the Social Security Administration as an institution) had not emphasized the program being able to cover a bit over three-fourths (78 percent to be exact) of promised benefits even after trust fund exhaustion, because it puts still too much emphasis on the trust fund balance (which even now is only filled with IOUs and not real money) as determining how sustainable the program is.
The point I tried to make in my remarks on the CNN program was that I am optimistic that Social Security will be there after 2037 and should be there to serve a social insurance function (not a private, high-return-but-high-risk investment function that Stephen Moore suggested), that Social Security is not “broken” but simply underfunded which just means it will start costing us money on net (like the rest of government, I suggested), and that we could easily choose to continue to fund 100 percent (not just 75-78 percent) of promised benefits–or any other level and distribution of benefits–with the policy choices we as a society are willing to make.
The President’s weekly address also emphasizes that Social Security can be counted on, but that there’s work to be done to “strengthen” the program if we want to keep the program self-sustainable–more work for the fiscal commission again, by the way.
The President also rightly stresses that privatizing the program is not the answer, because Americans value the safety of Social Security–especially given the current economic climate that puts so much fear in people (and which was the opening topic on the same CNN Your Money show this weekend).
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