Building an Economy that Works for Everyone

No monsters in the Social Security closet

Froma Harrop’s Sunday column in the Seattle P-I is a breath of fresh air.

The simple fact that Social Security is solvent through 2041 is lost on many who would rather ring false alarm bells to drum up support for privatization schemes – but not Harrop, who writes:

If politicians want to agonize over retiree benefits, they have their hands full with Medicare. Paying for that program will be a bear of a problem. But they should keep their paws off Social Security.

But here’s the really surprising news:

The 2008 Trustees Report projects that when those just entering the work force, reach retirement age, both workers and retirees will have considerably more buying power than they do today.

Come 2050, Social Security taxes at their current level will finance benefits for the typical retiree worth more than $20,000 in 2008 dollars. Today’s average annual benefit is $12,800.

Harrop points out:

Much could change in more than 20 years. Productivity gains have helped fewer workers pay for more retirees in the past and could in the future.

So rather than dismantling a successful program, we should focus our efforts on strengthening the American economy and increasing the productivity of the future workforce.

Looking for a quick history lesson on developments in Social Security – the “lockbox”, previous Trustees Reports, etc.? Here’s a good start.

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