Arnold Kling  

The Outlook for Social Security

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Charles Blahous writes,

population aging will remain a bigger financial challenge even than health cost inflation for decades to come. The vast majority of long-term cost growth in Social Security and Medicare, for example, is projected to take place by 2035. The CBO now attributes 64 percent of cost growth through 2035 in Social Security, Medicare, and Medicaid to population aging, even though two of these programs are health entitlements.

Read the whole thing.

I think that the level of knowledge among budget pundits has fallen sharply in the last fifteen years. Fifteen years ago, it was well know that Social Security is in need of major reform. We lost that knowledge.

My theory is that we lost that knowledge when the Bush tax cuts were enacted. The Bush tax cuts discredited budget compromisers on both sides. At that point, no Democrat could sell spending cuts to fellow Democrats and no Republican could sell tax increases to fellow Republicans. We have now had a decade for both sides to dig in, and that means a whole generation of politicians and pundits have emerged who are stuck on stupid.

Maybe the Bush tax cuts were not the causal event. Maybe there were underlying structural issues in American politics that were going to put us here anyway. But on Social Security, the Democrats were a lot closer to grasping reality in 1998 than they are today.

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COMMENTS (8 to date)
nazgulnarsil writes:

I don't think we lost the knowledge, I think we gained the knowledge that the current machine has ground to a stop when it comes to major structural changes. No one is going to bust their ass and **** their career to add a few drops of oil that may or may not help make the difference.

8 writes:

Social Security is already in (most likely permanent) deficit.
Social Security Full Fiscal Year Results

Lord writes:

Looking at CBO long term budget projections (bottom chart) it may be the aging population, but it is Medicare and Medicaid for them, not Social Security to any significant extent, but that was what health care reform was all about. Nothing lost, only the realization that tying the hands of future congresses is vain glorious.

steve writes:

I think they grasped reality just fine.

The issue of reforming social security was raised.

The baby boomers said: "No. End of discussion."

Dewey Munson writes:

90 yrs old
Store of value
If my earnings had retained value over the years since 1939, my Social Security would not be necessary

Dewey Munson writes:

Pay attention to 8 (above)

Lord writes:

This is baked in the cake. No one proposes any changes for those within a decade of retirement and expenses rise most a decade after retirement, so other than controlling cost increases, it is already too late. Get used to it.

Gnat writes:

What Blahous is saying is that we plundered the SS taxes/ surplus funds to pay for tax cuts for the rich so now let's count SS as part of the general fund.

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