Social Security

For months I've been wanting to write about Social Security funding issues. There is so much BS written and spoken about it that even intelligent, well-meaning people can be excused for believing some of it.

I considered writing a four-part series, but truthfully that's more work than I can muster the energy for this year.  Lucky for you.

Lucky for me, it's not that complicated. Here it is in a nutshell:

• Under current law there is a gap between what's coming in and what's going out, and the gap is getting bigger.

• BUT the gap does not continue getting bigger forever. By about 2030 the gap levels off, and then stays constant as far as the eye can see.

• The Congressional Budget Office (CBO) measures the gap at 0.6 percent of Gross Domestic Product (GDP) over the next 75 years.

• And the CBO provides us with a list of Social Security change options and their size as a percent of the GDP.

Click on it to enlarge it. Then pick one or more items that add up to 0.6.

Congratulations, you've just saved Social Security and doubled your sexual desirability quotient!

Kevin Drum has written about this at greater length, and I especially recommend this post and this one. The CBO document, Social Security Policy Options, is available here.

Caveat: Somebody needs to worry about the fact that worker's FICA taxes have been temporarily reduced (2%) during this recession. It's a quick and easy way to put a little extra money in employed person's hands, so has some stimulus effect. But it has an effect on the gap described above, too. That's something to watch. Plus, there's a crowd out there that doesn't like Social Security not because it doesn't work – it obviously does – but because it's against their "philosophy." They are bound to try to use that 2% as a wedge to promote their views. Life has taught me to be very cautious of people who have a philosophy (which seems to be just about anybody who went to the University of Chicago).