I defer to one of my favorite SciFi authors, Robert Heinlein-
What are the facts? Again and again and again — what are the facts? Shun wishful thinking, ignore divine revelation, forget what "the stars foretell," avoid opinion, care not what the neighbors think, never mind the unguessable "verdict of history" — what are the facts, and to how many decimal places? You pilot always into an unknown future; facts are your single clue. Get the facts!

Why did Al Gore delve into SS issues? Has the govt looted America's pension as corporate thugs have? Will the boomers retirement stress the SS system to an unmanageable kludge? The numbers don't look good to me.

"Let me tell you something,...In Washington, the truth is an unidentified flying object. And it's time that someone stood for the truth. The American people demand nothing less."

- Congressman Dennis Kucinich, November 07

It's not in a crisis if you're retiring within the next 20 years. However, if you're younger than that, the SS trust will go bankrupt at some point because of the Baby Boomers retiring and we will only be able to pay out what we put in per year. I don't remember absolute numbers at all (trying to go back 7 year or so to my college fiscal policy courses), but SS benefits for those after that point will be about 70% of what benefits currently are, which isn't much. The issue should be raised. The problem is that people identify this with Bush's privatization ploy which is not an honest fix and seriously harms certain individuals (women who take off years of work to take care of their children, for example). There are solutions that can help solve this that aren't privatization.
SS is in a solvable crisis. None of the solutions look good politically (raise taxes or cut benefits, you choose) so it never gets solved. If you're under 30 or so (like myself), this is a crisis and should be tackled as soon as we can.
Gore was trying to address the issue that the rest of the govt can "borrow" funds from the SS trust every year to fund themselves. This makes that trust go bankrupt sooner. His "lockbox" idea was that the SS trust is for SS alone.
Feel free to add stats that prove me right or wrong. I'm going from old memories.

In Ron Susskind's book "The Price of Loyalty" Ron writes that the former Secretary of the Treasury Paul O"neil and Alan Greenspan had plans to take a large chunk of the surplus from the Clinton and 41's years and roll it over into the upcoming shortfalls for the boomers. And give the Bush fat cats their tax cuts.

The fat cats got their tax cuts but the Social Security shortfalls well....we know where that $$$ went.

The No4 Kucinch quote rocks...thank you....Paul ONeils book also revealed that there many problems that Bush had no desire to fix....or work on- really.....thanks for posting on this..

5 Ruthless People Says: As long as there is a Republican in the White House there will be a Social Security crisis.

So true, their crisis being that they can't get their filthy fingers on it yet.

The longer we wait to make the few adjustments that will keep SS solvent for the next century, the bigger the adjustments will be. All it needs is raising the retirement age a little, and raising the maximum income on which SS taxes are paid a little.

John Kerry lost my respect in the 2004 campaign when, addressing seniors, he said he'd never raise the retirement age. Pure pandering, when that's one of the things we really need to do. And the sooner the better.

(But I did have to vote for Kerry anyway. Defensive voting, given the awful alternative that we're still saddled with.)

Al Gore talked about a Social Security lockbox and was laughed at, but he understood the funds were being drained for other programs and tax breaks for those who need it the least.

Obama repeating GOP talking points?

Who'da. Thunk. It?

1. Our failure as progressives to tap into the moral underpinnings of the nation is not just rhetorical. Our fear of getting “preachy” may also lead us to discount the role that values and culture play in some of our most urgent social problems.

2. For progressives, I think we should recognize the role that values and culture play in addressing some of our most urgent social problems.

3. “I think it’s important particularly for those of us in the Democratic party to not cede values and faith to any one party.”

I guess since Republicans are the only ones with morals and values, it makes good sense to try to be just like them. But when will those nasty progressives learn?

Social Security is under attack, and will continue to be, for two reasons.
1) It is the most visible remaining artifact of the "New Deal," which the Right has been endeavoring--and succeeding--to undo since Roosevelt died in '45.
2) It is the biggest, intact pile of cash left for the CorpoRat Carpetbaggers to abscond with as they make their getaway.
To keep 'em busy, they've already started dismantling the vestiges of Johnson's Great Society, too.
These guys seem to yearn for Hobbes' 'war of all against all.' I guess they think they can win it. But they could not, ever, if it came to that. Because they're outnumbered.

The neocons will not rest until the Social Security fund is completely eliminated, and the elderly are left to fend for themselves.

mudshark @ 23:

Ron Paul would like to do away with all of the social programs.

He might would like to but he'd have the Dems, American people, and the huge voting block of seniors on his side to end the war, not to end Social Security so it would never happen.

Yes it is in "crisis" I suppose, although I'd choose a different word.

When you are carrying the kind of debt load we are, Social Security could be reduced so as to effectively disappear with the stroke of a pen in the next few years. Perhaps even from a Democrat. The 20 year projections to NOT rely on CURRENT facts (as the RAH fan above points out).

Believe it. Or, just take a look at the numbers yourself. You really trust Bush not to steal from one hand to pay the other?

Hey, at least we might get medical care out of the deal. YAY! Now we can grow old and starve to death gracefully with great teeth...

Wait a minute. Pt. 2 Then . . . The Century Foundation in 2005 reporting on Social Security noted this (interestingly enough!)

The surprising message of Figure 2 is that every Democratic president (Kennedy-Johnson, Carter, and Clinton) left office with the ratio of national debt to income below where it was at the beginning of his administration, while the last three Republican administrations (Reagan, George H.W. Bush, and George W. Bush) have presided over explosive growth of the national debt relative to national income. Since 1960, Republican administrations have added 38 percentage points to the national debt/GDP ratio, while Democratic administrations have subtracted 23 percentage points from that ratio. This record stands on its head all the clichés about who is fiscally responsible.

Source: Economic Report of the President 2005 Table B-78, available online at http://a257.g.akamaitech.net/7/257/2422/17feb20051700/www.gpoaccess.gov/....

Wait a minute. Pt. 3 But waaay back in the 2002, Under Secretary of the Treasury Peter R. Fisher made these sobering remarks to the Columbus Council on World Affairs:

The most recent Financial Report of the United States Government, published last March, provided an accrual-based assessment of the government’s net liability for Social Security, for Medicare, and for government worker and military retirement benefits. The government has assumed these obligations, and designated taxes and revenues to pay for them. The Report projects that Social Security and Medicare will begin falling short around the year 2016. On a 75-year horizon, these programs collectively have a negative net present value of $26 trillion. The figure is even higher if one wants to ensure a fully sustainable system beyond that point.

That figure does not account for the other, general revenues that the government collects. Treasury staff estimate that if we tap general government receipts, projected at the recent average of 19 percent of GDP, the figure falls to negative $23 trillion. Again, that’s using a 75-year NPV calculation.

The Congressional Budget Office is Krugman's source. Continue . . .

A Congressional Budget Office study from this July took another tack. It projected the government’s finances out to 2075, holding discretionary spending constant as a share of GDP. The result? The federal government would double its share of the economy, from 19 percent of GDP today to 40 percent in 2075. Reverse engineering these CBO projections gives you a negative NPV of “only” $18 trillion.

Both these estimates are fairly crude. Making 75-year projections about anything is an inherently imprecise and risky business. But making promises of future government payments without keeping track of the costs is even riskier.

On the backward-looking basis, our debt to GDP ratio is 30 percent. On the forward-looking basis, our liabilities to GDP ratio is 200 percent or more.

Think of the federal government as a gigantic insurance company (with a side line business in national defense and homeland security) which only does its accounting on a cash basis – only counting premiums and payouts as they go in and out the door. An insurance company with cash accounting is not really an insurance company at all. It is an accident waiting to happen.

This particular insurance company, it turns out, has made promises to its policy holders that have a current value $20 trillion or so (give or take a few trillion) in excess of the current value of the revenues that it expects to receive. A real insurance company could try to grow its way out by raising its premiums and its earnings on investments faster than its liabilities. The federal government, however, would have to raise taxes or borrow faster than it increases outlays."

We've been spending money like a drunken soldier for five years, and borrowing. How did the picture all of sudden get so rosy according to Paulsen?

The solution depends on which voting bloc the politicians are willing to piss off. If they continue raising the retirement age, eventually the younger crowd might put down their cellphones long enough to organize. I don't see that happening anytime soon though.

Totally agree with George,

It seems everyone is ducking this issue but Obama and Fred Thompson. I am by no means a fan of Fred, but at least I give him and Obama credit for talking about an unpopular subject. The first boomer has already applied for benefits - after 70 million of their cohorts retire, it will put an incredible stress on the system. If we do nothing now, we have a choice of raising taxes an astronomical amount and/or drastically slashing benefits.

If the cost of living allowance (COLA) was indexed to inflation instead of wage increases, that would be a huge help. The only problem is that Democrats will complain that you're 'cutting benefits' even when you're just providing as generous as an increase.

But right now, we've got a monetary policy that's hit us with a regressive tax of 10% due to the falling value of a dollar. Couple that with double digit inflation (the Consumer Price Index used by the FED EXCLUDES fuel and food so it's pretty much a worthless indicator of inflation).

At this point, everyone should plan for their own retirement without factoring Social Security - we'll all be better off.

f anyone trying to get street cred with the Stephen Moore types by pretending there's a crisis

Obama hasn't been impressing me and now, with this whole Social Security nonsense, he is really pissing me off. Talk about taking right wing talking points from people who despise the very existence of Social Security and running with them.

Wait a minute. Pt. 2 Then . . . The Century Foundation in 2005 reporting on Social Security noted this (interestingly enough!)

The surprising message of Figure 2 is that every Democratic president (Kennedy-Johnson, Carter, and Clinton) left office with the ratio of national debt to income below where it was at the beginning of his administration, while the last three Republican administrations (Reagan, George H.W. Bush, and George W. Bush) have presided over explosive growth of the national debt relative to national income. Since 1960, Republican administrations have added 38 percentage points to the national debt/GDP ratio, while Democratic administrations have subtracted 23 percentage points from that ratio. This record stands on its head all the clichés about who is .

fiscally responsible = conservative ¿ ¿ ¿ :(

Larry @ 13:

I think the crisis in Social Security is because too many hands are in the Social Security pot taking millions out on a regular basis to fund needless wars, and distribute tax breaks to the wealthy elite.

-----------------

The Social Security Trust fund has always been a federal debt to Social Security. The money has gone to pay all manner of federal government expenditures by both republicans and democrats.

David M. Walker, the Comptroller General is on a fiscal wake up tour about this, and other monetary issues that don't make for a pleasant sleep pattern. If there is, according to Krugman, no crisis maybe some republican PR guru (read Frank Luntz & co) can come up with a more orwellian term to describe this unpleasant situation?

http://www.gao.gov/special.pubs/longterm/wakeuptour.html

timmm @ 37:

C'mon, Krugman "explains" jack shit. If any one is the "fool", it's someone who parrots something about a presidential candidate that's unfounded. Specifically, Orszags' analysis is highly tentative and speculative, and all over the map with regard to what he thinks "could" be the problem. Whereas it's a fairly straightforward conservative estimate that by 2042 we'll be receiving 73% of our benefits. So yes, there are other problems, but it's not at all "foolish" to say let's think about how to fix this relatively concrete one.

I challenge you to do a better job on your posts.

The real challenge would be for you to understand what you're talking about. It's not the conservative estimate, the 73% is the middle or base case used by the SS Trustees in their 2007 report. If you read the report, you'd find that the upper or optimistic case, which uses GDP growth assumptions closer to the historical record of the last 20 years, shows the system meets all its obligations throughout the projection period.
You could discover in that report that SS, even with the baby boom cohort retiring, requires funding of 6.4% of GDP before deducting the payroll taxes collected each year of around 4% of GDP. So, at most, SS costs about 2 to 2.6% of GDP each year or 10-15% of total governmnet revenue. If the upper, optimistic case is true (the case closest to historical growth in GDP), SS pays for itself from tax collections.

That same report includes data on Medicare and Medicaid which shows the real crisis. By 2042, Medicare will require as much as 16% of GDP or almost all federal revenue. The retirement fund is fine but to keep those seniors healthy, will require either all federal revenue or the huge tax increase everyone fears.

Do some homework, it's hard, I know, but there are probably adults around you who could help. Don't be afraid to ask.

social security crisis.
Obama's fear mongering. Needs to be announced on fox news.