January 25, 2005

Social Security Reform Crisis Date

David Adesnik gets the date wrong when Social Security is going to go into crisis. He views it as a matter of accounting. It is not. Social Security will be changed, at the latest, when a majority of the electorate knows that during their retirement years, their lifestyle will take a drop during the 2042 cuts.

The argument runs something like this:

When you're old, tired, have worked a lifetime, and really can't work anymore, the current social security program is going to take a dump on your financial balance sheet and you're going to end up having to ask "you want fries with that", "welcome to Wal Mart", or some other such low paid job that your tired, worn out body will still be barely capable of doing and will fill the hole in your financial resources. When it happens is up to the growth level of the US economy over the next few decades but our best guess is that you, personally, will get nailed sometime during your "golden years" with the bill for not reforming now.

That's an argument that will change enough votes that the political crisis for Social Security will hit long before the economic crisis arrives for the program. And, in the end, it's the first of those two crises that matters. Thus, the economic analysis is a bit beside the point. The political coalition to change Social Security grows with every year. Whether it's hit majority status yet is likely to be settled in the 2006 elections as Bush is likely to reward failure on the reform front with a strong effort to remake Congress on fidelity to reform grounds.

Posted by TMLutas at January 25, 2005 04:25 PM