…regarding Social Security, I think she needs to change her tune a little. Sen. Warren (boldface mine):
Last week, the president and vice-president of the centrist think-tank Third Way accused Sen. Elizabeth Warren (D-Mass.) of ignoring what they call Social Security’s “undebatable solvency crisis.” In an interview with Mother Jones, Warren fired back, countering the charge, and elaborating on how Social Security could be expanded.
“If we made no changes at all to Social Security,” Warren said, “it would continue to make payments at the current level for about 20 years,” meaning there is no immediate crisis facing the program, which assists some 58 million Americans. “Modest adjustments,” she added, “will make certain… we could increase benefits for those who need it most.”
One way to increase monthly benefits to seniors, Warren said, would be to broaden the program’s funding pool…
A less obvious, but effective way of directing more money into the Social Security pot, Warren said, would be to increase the federal minimum wage. “Raising the minimum wage means we have workers paying more in to support the Social Security system,” she said. Warren backs Obama’s call for a minimum wage hike from $7.25 to $9 an hour.
I like her solutions, and I’m glad she’s holding the line. But…
There is no crisis. I don’t mean in the sense of there’s a long-standing chronic problem that didn’t arise suddenly (e.g., disparities in educational outcomes based on class, race, and state). This, as I’ve noted many times, is a giant nothingburger. Zip. Nada. Bupkus. Why? Because this shortfall is based on ludicrously pessimistic assumptions.
If Social Security were unable to make its full payouts in twenty years (and this number year-to-year bounces around), then this means that our rate of economic growth during those twenty years has been worse than during either the Great Depression or the Great Recession (the recent unpleasantness).
Were our economy to perform that poorly for so long a time, that would be the real crisis. Even in that case, a small increase in the payroll tax–which would be much lower than previous increases–would cover the Social Security shortfall.
There. Is. No. Social. Security. Crisis.