It never ends. The Social Security Trustees released their report yesterday, and they now predict that the Social Security Trust Fund will no longer be able to pay out full benefits after 2033. Last year, it was 2036. As Atrios puts it, “Social Security Trustees Change Arbitrary Assumptions About Future, Get Different Results.” I’ve noted many times before that the Social Security Trustees, along with other government agencies, use wildly pessimistic estimates for Social Security (and Medicare)–and history bears that out. Again (boldface mine):
According to this intermediate projection, the Social Security trust fund will run out of money in 2033, compared with 2036 in last year’s estimate. Though this date has moved earlier in recent years, this is overwhelmingly the result of the deep and prolonged recession that began in 2007. As workers have found themselves without jobs, Social Security has received fewer contributions. The 2007 Trustees’ Report projected 169.0 million workers in 2011 earning $6.5 trillion in taxable earnings. Last year, there were only 157.7 million workers earning $5.5 trillion.
Despite this extraordinary strain on the program’s finances, the exhaustion date is four years later than projected in 1997.
They always overestimate how bad things will be. But even in that case, it’s not the end of the world:
Mark Warner’s on the twitter machine lying to everyone saying this means it “runs dry” in 2033. I can’t find the new report on the website yet, but the sentence to find is the one that reads something like “After 2033, without changes to the program Social Security will only be able to pay out X% of promised benefits” where X will be something between 75-80 or so and X% will be “higher benefits in real terms than current beneficiaries receive.”
The wonky version of that is here. Removing the cap on income would completely eliminate this problem (as well as make the tax code fairer, since there is a maximum amount of income that can be taxed). And, instead of cutting payroll taxes, how about next income we chop the 15% income tax bracket to 10%?
Of course, lowering unemployment and increasing wages (that is, shifting corporate profits to workers) would also help. But TEH SOCIALISMZ! Or something.
There are things worth worrying about: jobs and wages. Taking care of those will restore Social Security to long (or, more accurately, very long) term health. This is nothing but a distraction.