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Action on Social Security: The Urgent Need for Delay

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Publication Date: November 2010

Publisher(s): Center for Economic and Policy Research

Author(s): Dean Baker

Series:

Special Collection:

Topic: Economics (Economic policy, planning, and development)
Government (Public policy)

Keywords: Social Security; retirement

Type: Report

Coverage: United States

Abstract:

There is enormous public confusion (much of it deliberately cultivated) about the extent of Social Security’s projected shortfall. Many policymakers and analysts point out that projections from the Congressional Budget Office and the Social Security Trustees show the program to be out of balance in the long-term, therefore we would be best advised to make changes as soon as possible. This paper argues that supporters of the existing Social Security system should try to ensure that no major changes to the core program are implemented in the immediate future. It points out that:

1. There is good reason for believing that the public will be better informed about the financial state of Social Security in the future, in part because of the weakening of some of the main sources of misinformation;
2. Many more people will be directly dependent on Social Security in the near future. These people and their families will likely be strong defenders of the program;
3. The group of near-retirees, who may be the victims of early action, will desperately need their Social Security since they have seen much of their wealth eliminated with the collapse of the housing bubble; and
4. The concern over “maintaining the confidence of financial markets” is an empty claim that can be used to justify almost any policy.