Is Social Security in Crisis?
George Will casts doubt upon the conservative fiscal argument, preferring the philosophical one instead:
The president says Social Security should be reformed because it is in “crisis.” That is an exaggeration. Democrats say it should not be reformed because there is no crisis. That is a non sequitur. Social Security should be reformed not because there is a crisis but because there is an opportunity.
What constitutes a crisis is a matter of opinion, and everyone is entitled to his or her own. But not to his or her own facts. Here are some:
Social Security outlays may exceed revenue by 2018 — that date almost certainly will recede further into the future, as it has before, as the economy outperforms expectations. After that, the government bonds that Social Security surpluses have bought (money used to fund the government) will be entirely redeemed, as the Social Security Administration calculates, by 2042. Or 2052, according to the Congressional Budget Office, using different assumptions about the rate of economic growth. That depends partly on the rate of productivity growth: Might a growth rate unusually high by historical standards become normal? Immigration rates will affect the ratio of workers to retirees.
Some people warning of a distant Social Security crisis postulate 75 years of 1.8 percent annual growth. But if America has 75 such sluggish years, Social Security’s insolvency will hardly be the nation’s largest problem — and personal retirement accounts will reflect, not compensate for, the stagnation.
Changes in life expectancy are certain; what they will be is unclear. Since 1900, life expectancy at birth has increased 30 years (from 47 to 77), mostly during the century’s first half, largely from reducing infant mortality by conquering infectious diseases. But since 1950, the most dramatic gain has been in life expectancy at 65. How much more progress can be made there? How many people who live longer will choose to work longer? What unknowable public health developments will intervene? For example, if government succeeds in getting dramatic declines in smoking, some anticipated Social Security savings — from the early deaths of millions of smokers — will vanish.
All these are just the known unknowns; there surely are, as Donald Rumsfeld says, unknown unknowns. Which means that today we may be less distant from the enactment of Social Security (1935) than we are from a real solvency crisis in the system.
Will makes valid points, and I certainly sympathize with the opportunity message. But his case, as I’m sure he knows, is much harder to sell amid other important priorities like the Iraq War, terrorism, and employment. Unless political supporters of privatization create a sense of urgency, the Social Security agenda will be placed in the backburner — and the opportunity that he so cherishes will be lost.