Some Simple Points About Social Security
I’ve been talking with some friends and fellow bloggers about how we can help educate the public about the issues surrounding Social Security. What’s needed is boiling down the issues into simple talking points that can be understood by busy people who have been hearing for years that Social Security is going bust. In fact, one 1995 poll showed that the younger generation are more likely to believe in UFOs than that Social Security will be there for them when they retire. It will take simple, and compelling stories (built on a foundation of truth) that can be made into effective presentations, oped pieces and ads. Here is an approach I’ve been thinking about: Explain the dates.
One reason that the Social Security issue is so confusing for people has been the decades long sales job that has been run by those who really don’t like government being in the business of providing benefits to individuals. They say they believe that individuals are corrupted by Social Security (it’s socialism, you know).
When FDR first put the program in place, there were tremendous battles opposing it from the conservative forces. And as we all know now, when George W. Bush ran for elected office in 1978, he was already campaigning on privatizing Social Security.
When Ronald Reagan came into office there was recognition that the program was unsustainable as it was then configured (back then, a pay-as-you-go system where one generation covered the bill for the previous generation) because the baby boomer generation was so much larger in comparison to the next generations.
In 1983, the Greenspan commission was convened to come up with a solution to the problem and they recommended increasing the payroll contributions by a small amount for a number of years so that in essence the baby boomers would be pre-funding their retirement by building up Social Security reserves that could be drawn on when they themselves retired. These excess payroll taxes have been used to buy US treasuries. The treasury notes that have been purchased plus the interest on the notes are what is known as the Social Security trust fund.
Today, when people talk about fixing the Social Security problem they are talking about two different problems with two different dates. When you talk to your friends and family about what is proposed, you should be careful to clarify what is signified by these dates and what the politicians are saying when they talk about the crisis in Social Security.


