As for the worker-to-retiree ratio, Moscovitz notes that a declining ratio doesn’t automatically mean that Social Security can’t support its beneficiaries. Worker productivity has increased by 78 percent per worker since 1980. There are other reasons for Social Security’s projected shortfall, including rising income inequality, Moscovitz reported.
This piece offers lots of good context for future reporting, introduces ideas for fixing the system that might be less harmful to America’s elderly, and all in all did a good job. Bravo.
Related stories:
What a higher Retirement Age really means: a Social Security mini-primer
Social Security: Scare-mongering from CBS News
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Lieberman's insistent misleading spin really reflects poorly on CJR.
It's asinine to say that SS's problems are easy to fix, as long as we cut benefits and reduce eligibility. The reality is that recipients in the future are going to get much less out of SS, and calling that "an easy fix" denigrates the hardship that that's going to lay upon the people who are relying upon SS for their retirement.
And as for the deficit, does Lieberman not understand the issue, or does she think her readers won't? For decades, SS has reduced the General Fund's need for borrowing (i.e., reduced the deficit), because surpluses from the payroll tax were turned over to the General Fund (through the accounting device of special T-bills). Now, the payroll tax is no longer in surplus, so funds are flowing back out of the General Fund, as the Treasury redeems T-bills to SS while taking no more new money in from it. The money that the Treasury is using to redeem the T-bills is coming from current general appropriations and current general borrowing. So yes, the shortfall in the SS payroll tax means that the federal deficit is rising in order to pay SS benefits. The Motley Fool and Lieberman are simply, flatly wrong.
#1 Posted by Tom T., CJR on Fri 2 Nov 2012 at 10:45 AM