Tuesday, November 15, 2011

The problem with Social Security and Rising Healthcare Costs: Two great tastes that go great together

One particularly pernicious zombie lie in politics is that Social Security is in some kind of crisis. The right wing screams it from the rooftops.  Rick Perry calls it a Ponzi scheme.  The "liberal" NY Times and the "liberal" Washington Post says it all the time.  But its just not true.  Its so amazingly untrue its pathetic that we even have to have this conversation all the time.  The reality is, Social Security can fund itself, with no tweaks at all, for the next 25 years.  25 years!  After that, a few minor tweaks amounting to 1.5% of the GDP and Social Security is saved forever.  Forever!  (Editor's note - I wanted to include a chart here but my browser is acting up and it won't let me upload the pic, so please click the link). Nevertheless, thanks to the media constantly claiming otherwise, everybody and their grandmother believe Social Security is doomed.  Doomed!
A USA Today/Gallup Poll shows six in 10 Americans who haven't retired yet say there will be nothing for them when they stop working...Younger Americans are least likely to believe they'll one day get Social Security... while those older than 55 are confident they will get benefits.
Again, this is utterly ridiculous and it's another major example of the media misinforming the public (intentionally or not, I don't know).  I have no idea why the mass media has a bug up their ass about Social Security.  It's inexplicable really.  And yet, they keep clamoring for some grand compromise that will a) cut benefits or b) raise the retirement age.  Forget the fact that we should be doing the opposite, at least in the short term.  I mean, lowering the Social Security eligibility age would actually be a really effective stimulus program because a) it would increase the capital in circulation, thus increasing demand for goods and services (otherwise known as capitalism) and b) it would open up thousands of jobs as new retirees left the workforce to enjoy their golden years. But we can't have that conversation.  He have to have conversations about "Grand Bargains" and "Super Committees".  But any decisions these committees make are virtually worthless.  Why? Because subsequent Congress' can always overturn these decisions.  It's not like we will strike a grand bargain on Social Security and then Congress retires forever (would be that it was so).  No, the next Congress comes in and raises taxes and raises those benefits, and then the next Congress comes in and raises the retirement age and cuts taxes, and so on.  Passing legislation now, that effects the population 25 years from now, is folly and has the added benefit of being politically unpopular.  The real problem we face, from a deficit standpoint, is rising healthcare costs (again graph won't cut and paste). I mean, healthcare costs are going to get really, really, really bad.

Luckily, these are two problems that take care of one another!  You see, as long as healthcare costs continue to skyrocket and the government continues to refuse to offer universal healthcare coverage, life expectancies will get so bad that US citizens simply won't live long enough to collect Social Security benefits! Its perfect. How come I never see any of these so-called number-crunchers in their nerd factories do that analysis?!? Currently the US is ranked 36th in the world in life expectancy (78.3 yrs), just behind communist Cuba (heh, heh). But healthcare costs are expected to increase 70% in the next ten years. Yeah, you read that right, 70%.  Thankfully, a lot of our poorest citizens will not have health insurance, thus they will be unable to afford any kind of life-sustaining treatment and surgeries.  So, they'll just die off before they have the opportunity to collect any of their ill-deserved Social Security benefits anyway. I mean who were these people??? Convenience store workers, manual laborers, date entry clerks, nurses aides, teaching assistants. A pox on them all I say!

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