National NOW Times >> Spring 2005 >> Article
Talking Social Security While the Privatization Push ContinuesBy Rebecca Trinite, Development Associate
You'll find the Social Security "crisis" in the same undisclosed location as the Weapons of Mass Destruction — or in the same dictionary as "Clear Skies" or "Family Time Flexibility," two Bush measures that did nothing their title implied. Here's a step-by-step explanation of the historic and future status of Social Security, where those numbers come from and what they mean.
By the early 1970s, when the "baby boomers" joined the workforce in huge numbers, this large group began paying in much more than was needed to support current retirees, and continue doing so to this day. In effect, the boomers began "saving" for their own retirement and continue to do so. They are building a surplus (often called the "Trust Fund") to cover the expected high costs during the bubble when boomers retire en masse.
The boomers haven't started retiring yet, so the surplus continues to grow. Based on conservative estimates, the surplus will continue to grow until 2018. Well, then what?
In 2018, the boomers retire and no longer "save." As intended, they use the surplus they built up to pay their own benefits. Will we start "taking more money out of the system than is being paid in" in 2018, as conservatives warn ominously?
Yes, and for good reason—to pay out the benefits boomers have been saving for throughout their working years.
In either 2051 or 2042 (depending on whether the economic growth estimate is conservative or very conservative), most boomers will no longer be collecting benefits and the surplus will have been spent for its intended purpose.
This is what Bush refers to with alarm as "bankruptcy." In reality, at that point we simply go back to the pre-boomer method of pay-as-you-go with current workers paying current benefits.
To read more about Social Security and the right-wing plan to undermine our only guaranteed retirement, disability and life insurance program, visit NOW's issue page on Social Security.
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