Tuesday, November 30, 2004

The Crisis That Doesn’t Exist.

President Bush has been pushing on the idea of privatizing Social Security. We’re told over and over again that Social Security can no longer pay out to retirees as it did in the past, and when the Baby Boomers retire the entire system will go bust. So what is the problem? As it turns out there is no problem. The administrative costs of Social Security is a measly 0.6 cents of every dollar paid out in benefits. In contrast, private accounts, such as those in England and that Bush is pushing for creating, would cost 15 cents for every dollar paid out.

Ten years ago Argentina’s economy crumbled. Argentina went from one of the most promising and strongest economies in the world into a fiscal nightmare. It was a result Argentina privatizing their Social Security program, on the behest of the IMF (International Monetary Fund).

So what are we to do? Social Security is heading for a disaster right? Isn’t it about to go bankrupt? Not exactly. The Social Security trustees' report shows the program can pay its benefits through 2042. Well maybe these people are just kooks, right? Not exactly. The Congressional Budget Office found similar findings, except they found that Social Security will remain just fine until 2052, just as it is today.


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