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Social Security fund in trouble
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WOULD YOU like to have a doctor who was afraid to tell you that you have cancer or heart disease? No. Then why do we tolerate government leaders who will not admit that our Social Security program is in trouble?
Both President Obama and Republican presidential candidate Mitt Romney agreed in the first debate last fall that no changes were needed in the Social Security program. Yet two academics are just the latest to vehemently disagree with that political soft soap.
The two are Gary King, professor of government and director of the Institute for Quantitative Social Science at Harvard, and Samir Soneji, a demographer and assistant professor at Dartmouth's Institute for Health Policy and Clinical Practice. Writing in the Jan. 5 New York Times, they maintain that the government's methodology for determining the solvency of the Social Security program is deeply flawed. If no changes are made, the program's trust fund will be empty within 20 years.
That should send shivers down the spines of anyone paying attention. Ninety percent of Americans age 65 and older receive Social Security, and of that number, 23 percent of married couples and about 46 percent of unmarried persons rely on Social Security for 90 percent or more of their income. That's a lot of elderly people who will be left out in the cold should the system fail.
The problem, writes Messrs. King and Soneji, lies in the antiquated and inaccurate techniques used by the government in forecasting Americans' longevity. Social Security's methodologies have barely changed since the program began in 1935. This rigidity yields unrealistic conclusions.
For instance, improvements in health (a decrease in the prevalence of cigarette smoking and improved cardiovascular care, for two examples) are not taken into account when calculating how long people will need to draw benefits. More Americans will be living longer, and collecting benefits longer, while supported by the payroll taxes of fewer workers than the agency predicts.
Although Social Security has a trust fund ($2.7 trillion, stockpiled to offset the baby boomer bulge in population), it will have to pay out about $800 billion extra per year by 2031--and will be exhausted by 2033.