Thursday, January 13, 2005

Social Un-Security

As we all know, the Bush administration is touting Social Security reform. Bush told Congress that unless they act immediately the system will go bankrupt.

I watched Lou Dobbs tonight on CNN. He had a guest on to discuss Social Security named Pete Peterson. Peterson is the former Commerce Secretary to the Nixon administration and current chairman of the Concord Coalition(a non-partisan group that advocates fiscal responsibility), and the co-founder of the Blackstone Group(a financial firm).

Dobbs said, "We have a 2 trillion dollar surplus. What is the crisis with Social Security?"

Peterson went on to say some very revealing things. A lot of which we all probably knew to some extent, but here is an insider telling us the people what the problem is. Peterson first said, ''Social Security is basically a trust fund. It is a fiscal oxymoron. You should not trust it and it is not funded." About the surplus, "The money is spent". About what it will take to save it, "According to the Concord Coalition numbers, to fund Social Security from 2018-2045, it would cost 5.4 trillion dollars and you would have to do one of three things. You could borrow the money, you could raise taxes from 11% to 18%, or you would have to cut benefits."

Neither Dobbs nor Peterson thinks that the big problem is Social Security right now. They agreed it is a problem, but not a crisis as the current administration would have you believe. They do agree the big problem is Medicare. Petereson says, "Medicare is 3 to5 times the problem Social Security is. It is the big elephant in the room. No one wants to talk about it or point it out." Dobbs asked why? Peterson said, "Medicare is not the big issue because it is tougher to solve. The problem is tougher and deals with the critical choices of life and death."
Dobbs pointed out that Medicare has a quarter of a trillion dollar surplus that is being eroded a lot faster then Medicare.

It seems to me that if Medicare is a tougher problem and deals with life and death, our government would want to solve the problem. In case no one noticed, a few months back the Bush administration raised the amount an elderly person has to pay for Medicare by 17%. The benefits are less then the elderly need to get by and now cost more to boot. You may ask why I care about either issue? Social Security will not be there when I am old enough to collect, no matter how much I pay in. If you are 52 today, in 2018 when you are 65, all the money you payed in will not be there. Medicare is going to be extinct as well. By the time my generation gets old enough to collect Medicare benefits, our grandchildren will be reading about it in school text books as a thing of the past. I care because we need to protect our futures and our children's futures. If we do not fight for personal Social Security accounts and personal Medicare accounts, neither program will exist to aid us when we all need it most. If you don't work, no future. The more you work, the better future you will have. There, I have solved three problems in one long blog post.
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