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Social Security Reform Thursday: Week Fifty-Four -- It Could Almost Work Out, Or It Could Be Far Worse Than Predicted.


Thursdays are good days for reform, because they fall between Wednesdays and Fridays. Just because the status quo'ers got their way in 2005 does not mean the problem has gone away. Indeed, it's getting worse with each passing day. Thus, Reform Thursday continues.

That's why WILLisms.com offers a chart or graph, every Thursday, pertinent to Social Security reform.

This week's topic:

Roll The Dice.

One of the more frustrating parts of the Social Security debate last year was the lack of a common language. Liberals spoke of the program's goals glowingly, as if Social Security-- and only Social Security-- could alleviate poverty among retirees. They also often used creative math to show that the crisis was really just a small accounting blip that could be solved with a few minor tax hikes on "the rich."

The rest of us reviewed their numbers and rhetoric and were baffled and bewildered by the blatant distortions and mischaracterizations. Moreover, even official organizations muddied the debate: the CBO reached slightly different conclusions from the Social Security Trustees, who reached different conclusions from some pro-reform groups, which reached different conclusions from left-wing socialist Democrat-affiliated groups.

The establishment media usually sided with the liberal interest groups, unfortunately. The establishment media still set the agenda for the country, like it or not (except when the GOP musters its campaign resources to get directly to the people).

Thus, because these reactionary socialists wanted to maintain the broken staus quo, no reform. That's how it works, folks. The blogosphere (which has plenty of very far-left sites, if you hadn't noticed) and talk radio (which cares more about entertainment than policy reform) and Fox News (which too often follows the establishment media groupthink) are still a blip compared to the rest of the left-leaning media in this country.

It may very well have taken the resources of an entire presidential campaign, complete with nationally-televised convention, an army of paid and unpaid workers spread out across the country, a frantic stump speech schedule, a series of live debates, and two clearly defined choices, to go over the heads of the establishment media on the Social Security issue.

One point of contention was (and still is) the schedule for meltdown, not to mention how bad the meltdown will be. The anti-reform crowd had two basic policy arguments:

1. It's a small problem, not a crisis.
2. The small problem is half a century away.

Well, it could turn out to be a smaller problem than predicted, particularly if the economy consistently grows faster than historical averages. For example, if Social Security tax revenues exceed expectations and benefit payments are much lower than expected, we may only be faced with a marginal crisis, rather than a full blown one:


Notice that the crisis could end up right where we expect it to, it could end up being a minor crisis, or it could end up being a far worse crisis than expected. Not a particularly inspiring group of options.

Also notice that the problem never retreats. It just continues to get worse ad infinitum. On the other hand, reform solutions that would also increase the national rate of savings, boost the economy to the tune of trillions more in GDP growth, and empower hundreds of millions of individuals and their families, do exist. It's just a matter of how painful we want the reform to be. Do it now, it's easy. Do it later, not as much.

If you were a gambler, would you look at the projections in this graph and assert, with authority, that there is no crisis? At best, we'll barely be able to afford to pay for those trillions of dollars in Social Security benefits, with only hundreds of billions in borrowing added to annual federal budget ledgers.

Not a great bet, any way you slice it, unless the payoff is truly astronomical. So, what is the purse that inspires liberals to deny Social Security reform? What on earth could be so special that they are willing to stake the very financial health of the future U.S. economy on there only being a small crisis?

Two possibilities:

1. Old-fashioned political gain. Social Security is called the third rail of politics for good reason. Liberals (including some Republicans) obstructed just long enough to let Bush zap himself on it.

2. Defending Marxism. Social Security, each year, takes hundreds of billions of dollars (that would otherwise earn compound interest) out of the free enterprise system, helps fund big government projects elsewhere, and otherwise maintains dependence on the government. The lack of reform, manifested in 10-12 years, will almost certainly necessitate higher taxes to pay for the escalating costs. And higher taxes are always good, according to Marxists.

So, to recap, it's a long-shot, but we could end up with an almost-non-crisis, slightly later than expected. Or, if we follow the trend lines, we could end up with a more intense crisis, much earlier. Why even take a chance on doing nothing when the crisis is so evident-- and reform has so many peripheral advantages?

It's time for reform.

The clock is ticking:


Previous Reform Thursday graphics can be seen here:

-Week One (Costs Exceed Revenues).
-Week Two (Social Security Can't Pay Promised Benefits).
-Week Three (Americans Getting Older).
-Week Three, bonus (The Templeton Curve).
-Week Four (Fewer Workers, More Retirees).
-Week Five (History of Payroll Tax Base Increases).
-Week Six (Seniors Living Longer).
-Week Six, bonus (Less Workers, More Beneficiaries).
-Week Seven (History of Payroll Tax Increases).
-Week Seven, bonus (Personal Accounts Do Achieve Solvency).
-Week Eight (Forty Year Trend Of Increasing Mandatory Spending).
-Week Nine (Diminishing Benefits Sans Reform).
-Week Ten (Elderly Dependence On Social Security).
-Week Eleven (Entitlement Spending Eating The Budget).
-Week Twelve (Benefit Comparison, Bush's Plan versus No Plan).
-Week Thirteen (Younger Americans and Lifecycle Funds).
-Week Fourteen (The Thrift Savings Plan).
-Week Fifteen (Understanding Progressive Indexing).
-Week Sixteen (The Graying of America).
-Week Seventeen (Debunking Myths).
-Week Eighteen (Debunking Myths).
-Week Nineteen (Reform Needed Sooner Rather Than Later).
-Week Twenty (Global Success With Personal Accounts).
-Week Twenty-One (GROW Accounts: Stopping The Raid).
-Week Twenty-Two (Millions of Lockboxes).
-Week Twenty-Three (Support for Ryan-DeMint).
-Week Twenty-Four (KidSave Accounts).
-Week Twenty-Five (Latinos and Social Security).
-Week Twenty-Six (AmeriSave).
-Week Twenty-Seven (Cost Of Doing Nothing).
-Week Twenty-Eight (Chile).
-Week Twenty-Nine (Entitlement Spending Out Of Control).
-Week Thirty (Reform Better Deal Than Status Quo).
-Week Thirty-One (Social Security As A Labor Cost).
-Week Thirty-Two (Social Security And Dependence On Government).
-Week Thirty-Three (Social Security, Currently A Bad Deal For African-Americans).
-Week Thirty-Four (Longer Life Expectancies Straining Social Security).
-Week Thirty-Five (Howard Dean & Salami).
-Week Thirty-Six (Growing Numbers of Beneficiaries Draining Social Security).
-Week Thirty-Seven (The Crisis Is Now).
-Week Thirty-Eight (Disability Benefits).
-Week Thirty-Nine (Broken Benefit Calculation Formula).
-Week Forty (German Social Security Disaster).
-Week Forty-One (Crumbling Pyramid Scheme).
-Week Forty-Two (Overpromising, Globally).
-Week Forty-Three (Demographic Wave).
-Week Forty-Four (The Jerk Store).
-Week Forty-Five (Defined Benefit Plans).
-Week Forty-Six (Even The Empty Promises Are A Bad Deal).
-Week Forty-Seven (Our Aging Population).
-Week Forty-Eight (The Tax Increases Required To Cover Social Security's Costs).
-Week Forty-Nine (Much Longer To Get Your Money Back From Social Security).
-Week Fifty (A Vote, At Last).
-Week Fifty-One (We Can Do Better).
-Week Fifty-Two (Socialist Security).
-Week Fifty-Three (China Has The Same Problem, Only Worse).

Tune into WILLisms.com each Thursday for more important graphical data supporting Social Security reform.

Posted by Will Franklin · 27 April 2006 02:46 PM


If the Social Security Administration was a private company, the Federal Government would have shut it down and locked away its management long ago for running a ponzi scheme.

Posted by: Eneils Bailey at April 27, 2006 04:51 PM

EB...How true!

Posted by: Zsa Zsa at April 27, 2006 07:44 PM

Think of the Enron scandle and how investors were being mislead and then take a look at Soc.Sec. ??? Hmmmm...

Posted by: Zsa Zsa at April 28, 2006 07:19 AM