Attention Seniors: President Obama wants to Take Your Social Security Away!

What a ridiculous title!  But isn’t that baby cute?

We need to talk aboot social security reform this year whether people like it or not. It was a nice idea at first in the 1930s. The government was going to take money out of your paycheck every week and save it for your retirement for you, and then give it back to you when you turned 65. The fact that they were counting on you dying at 62…meh.

But now, when there’s all of two workers for every one recipient, and we start running social security deficits next year as opposed to 2016 when we thought, it’s time to be serious for a minute…which is aboot all the topic got in President Obama’s State of the Union. “No current retiree’s will be at risk.” Yeah, no one is suggesting they should or will be, Sparky.

The battle is coming. You know one side is going to do everything they can to use the politics of fear and scare old people into thinking the other side is coming to take their benefits away. But where do most other people stand? e21 has a handy list identifying the five basic “factions” when it comes to social security reform…

Fiscal conservatives: This group is motivated primarily by concern about rising tax burdens facing younger generations. Accordingly, this group is usually open to some combination of either pre-funding future benefits (through personal accounts) and/or reducing the growth of costs outright. They are focused mostly on the result of containing the growth of cost burdens, and are more flexible on the means.

Free-lunch conservatives: Free-lunch conservatives also don’t want to raise taxes, but unlike fiscal conservatives they are unwilling to embrace the benefit changes required to hold down cost growth. They tend to focus on personal accounts exclusive of other solvency measures. (Personal accounts change the method of funding benefits but not necessarily the total amount of taxpayer dollars committed.) Some in this camp have even argued for making current benefit promises more generous.

Centrists: This group is motivated primarily by closing the gap between scheduled benefits and projected revenues, and is open to changes on both sides.

The realistic left: This group is unwilling to constrain cost growth enough to avoid a significant tax increase. Basically, they acknowledge the fiscal problem but would prefer to raise taxes to fix most (and in some cases nearly all) of it.

The anti-empirical left: This group implicitly advocates that Social Security continue to promise trillions more in future benefits than it can finance, often even to the point of denying that the program’s financing shortfall even exists. Some in this group have (wrongly) alleged that projections of a shortfall were predicated on overly conservative assumptions. More recently some have said (equally wrongly) that Social Security was being “targeted” to solve a deficit problem to which it does not contribute. (For refutations of these myths, see here and here).

Whose side are you on?

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