FOLLOWING THE SOCIAL SECURITY BOUNCING BALL

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MEDIA BLOWHARD Tim Russert once again hyped a rightwing Social Security
scare figure during the NH Democratic presidential debate and the
candidates, predictably, were unable to straighten him out.

Russert uses the threat that the number of citizens on Social Security
is going to double, often without saying when. According to the Census
it will be sometime between 2030 and 2035.

But here is what Russert and others don't talk about: From a budget
point of view, what matters is not just senior citizens but the
dependent population, including children.

While it's true that the total dependent population will increase from
around 32% to 40% by 2030, consider this: during the Kennedy years it
was 45% and there was none of this panic around.

Here are the figures:

1960
Children: 36%
Seniors: 9%
Total dependent population: 45%

2005
Children: 18%
Seniors: 14%
Total dependant population: 32%

2030
Children: 17%
Seniors: 23%
Total dependant population: 40%

Now here are several other things to keep in mind:

1. The projection aren't that hot.

The official project of when the Social Security trust fund will run out
of money has increased 12 years in the 11 years since 1996. At this
rate, we'll never run out of money.

2. The  Social Security trustees make three long-term estimates. The one
that politicians and the media invariably use is one that assumes
economic growth so low that you certainly wouldn't want your Social
Security invested in the stock market because it wouldn't be going
anywhere.

3. The trust fund is an artificial accounting creation. If it runs out,
then Social Security can be funded from other sources including the
incredibly bloated military budget. To understand this game, imagine the
defense budget came out of a trust fund. Would we stop defending
ourselves when this fund was drained thanks to typical defense cost
overruns?

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