The Hoover Institution publishes an interesting article from Chuck Blahous, one of Social Security and Medicare's public trustees, outlining what he sees as important myths about the programs. These myths include:
- We "only" have a healthcare financing problem, not a population-aging or senior-entitlement problem. Medicare's financing shortfall is therefore much bigger and more urgent than Social Security's.
- Social Security does not and cannot add to the deficit.
- Medicare's projected insolvency date is the critical barometer of its financial condition.
- Social Security projections are conservative; a good portion of its projected shortfall might disappear on its own.
- Social Security's projected solvency through 2036 means that beneficiaries have pre-paid their benefits through that date; any benefit changes, therefore, should be deferred until later.
Check it out here.
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2 comments:
Andrew, is this guy for real?
“Social Security's projected solvency through 2036 means that beneficiaries have pre-paid their benefits through that date; any benefit changes, therefore, should be deferred until later.”
Wow, what happens if for some unknown reason all workers stopped working. How long would SS-OASI be able to pay benefits? Certainly not full benefits until 2036.
Prepaid means you paid in full. So any person who retires before 2036 has prepaid his benefits in full.
Here is what the SSA says about the program.
“Social Security was never meant to be the only source of income for people when they retire. Social Security replaces about 40 percent of an average wage earner’s income after retiring, and most financial advisors say retirees will need 70 percent or more of pre-retirement earnings to live comfortably. To have a comfortable retirement, Americans need much more than just Social Security. They also need private pensions, savings and investments.
The money you pay in taxes is not held in a personal account for you to use when you get benefits. Your taxes are being used right now to pay people who now are getting benefits. Any unused money goes to the Social Security trust funds, not a personal account with your name on it.”
Social Security: a simple concept, http://www.socialsecurity.gov/pubs/10024.html
Uh, I think he was arguing that it's a myth...
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