Sam Says

Author: Sam Wilson

How about a game? Here is the Merriam Webster Dictionary's definition of "crisis" - "an unstable or crucial time or state of affairs in which a decisive change is impending; especially : one with the distinct possibility of a highly undesirable outcome." With that in mind, examine the facts, and decide for yourself if Social Security faces a "crisis."

Social Security pays for the benefits it gives out today with the taxes it collects today. However, it currently collects more than it pays out. This surplus of money is invested into U.S. treasury bonds, what important people call the Social Security Trust Fund. The Fund exists to ensure that Social Security will be able to pay out benefits, even if the program starts to run a deficit.

According to the 75 year projections the Social Security trustees make, the program is in some trouble, a shortfall of a few trillion dollars. But the state of Social Security depends on the demographics of the nation, so this projection is at best a ballpark guess.

For argument's sake, imagine its still 2003, and think of 75 years before then, 1928. Who could have possibly projected the Depression, World War II, the Pill, the Baby Boom, a decline in tobacco use and a rise in obesity? Realistically, the long term projection is a noble guess.

The administration tells us that 2018 is a crucial year because Social Security will start to run a deficit then. While not a good thing, it is expected and common. Since 1970, Social Security has been in the red 11 years. And remember, the Trust Fund exists for just that type of situation.

Unfortunately though, the projections state that as the program now stands, it will continue to run deficits after 2018, paying for the Boomers. These deficits will eventually exhaust the Trust Fund in 2042. This is the doomsday we have been hearing about, when Social Security will be bankrupt. I will be 60 then, just a few years from my retirement. Social Security will be bankrupt. Should I be terrified?

No. First, of all Social Security is a pay-as-you-go program. Taxes then will still be coming in and in turn paid as benefits to people such as myself. As the program now stands, I will be able to receive just over 70 percent of scheduled benefits when I retire. A cut yes, but the program will not simply cease to exist.

Second, I do not fear 2042 because that all of this assumes the system remains as it now stands. When the economy tanked in the late '70s, Social Security faced a legitimate crisis. The Trust Fund was set to run out in the early 1980s. Ronald Reagan came into office and decided to act rationally to fix it. He gave the program a few tweaks by cutting benefits a little in raising the retirement age from 65 to 67 and slightly raising taxes. And guess what - that solved the crisis.

So, is there a crisis?

Isn't Social Security fun?