April 29, 2005

Social Security: Some Things You Need to Know

It is time to begin an overview of the Social Security system for interested readers and listeners. President Bush sparred last night with the press over the issue of Social Security and the Has-Been-Media responded with an assortment of catty and tendentious headlines: “Bush Cites Plan That Would Cut Social Security,” blared the New York Times. “Bush Social Security Plan Would Cut Future Benefits,” howled the me-too Washington Post. In truth, everyone with even fleeting familiarity with the issue knows that the system is (a) an unconscionable rip-off, in which Congress takes your earnings today, spends then, and promises to return the money, plus modest interest, when you retire, (b) headed toward cataclysmic bankruptcy. Here are the main contributors to the meltdown, with links to government information sources that document the mess:

• A rapidly shrinking number of workers must support a rapidly growing number of retirees.
Retirees are living longer and thus drawing Social Security payments for many more years than previous generations of senior citizens.
• They also are receiving benefits that exceed payments because they enjoy the benefit of cost-of-living adjustments that overstate inflation, and thus provide excessive cost-of-living adjustments and apply similarly generous indexing formulas to the wages upon which Social Security payments are based.
• Add to this mix declining birth rates, falling levels of immigration, earlier average retirement ages, and other factors, and you get an incredible mess.
• If you want the most exhaustive and authoritative account of the situation, here’s the 155-page annual report of the OASDI trustees.

Use this page as a resource when you want an overview of the system. In coming installments, I’ll explore in greater detail the Social Security rip-off, tear into the arguments used by both sides to defend their positions, and analyze private-savings plans in the U.S. and around the world. By the time the president gets around to announcing a detailed plan, you’ll know enough to pick it apart — and to demand of your elected officials a plan that actually will help you, your parents, your children and grandchildren retire without having to worry about the burden of lugging a vast Social Security behemoth on your shoulders.

In the next installment, however, I’ll critique the president’s sales efforts to date, and provide my own suggestion about how he can win the battle for hearts and minds.

Share your thoughts with Tony. E-mail him at tonysnow@foxnews.com.