That is why 2042 is a fiction. The really important date is 2018. That is when this pay-as-you-go system starts paying out more (in Social Security benefits) than goes in (in payroll taxes). Right now, workers pay more in than old folks take out. But because the population is aging, in 13 years the system begins to go into the red. To cover retiree benefits, the government will have to exhaust all of its FICA tax revenue and come up with the rest -- by borrowing on the world market, raising taxes or cutting other government programs.
We have to reform the system. There is no free lunch. Private accounts are a fine idea for other problems, such as dependency and transferability to heirs. They are irrelevant to the solvency problem. We would have to raise taxes or cut benefits -- or borrow, endlessly and ruinously.
The Democrats' plan is to stick their heads in the sand. The problem is that every year that we allow to go by means that the reduction in benefits or the increase in taxes will have to be larger. If we had started this in the fat years of the 1990s, we could have done it at reasonably low cost in benefit cuts and/or tax increases. We now have 13 years rather than 20 or so before the system starts bleeding red.
That is why the president's 2042 date is so disastrous. It makes it seem like the problem is very far away. True, he mentioned 2018, but bringing up 2042 simply muddies the logic. It reinforces the idea that there really is a trust fund from which we will be drawing to pay the elderly for the quarter-century between the years 2018 and 2042. There is not. It is just paper.
Moreover, 2042 creates the ridiculous distraction of the conflicting Congressional Budget Office estimate that the (fictional) trust fund becomes (fictionally) bankrupt in 2052 -- 10 years later and 10 more reasons for Democrats to ignore the whole problem.
To bring the silliness full circle, the president himself has since admitted that there really is no trust fund. But his 2042 date is based on the idea that there is. We will never be able to reform the system if the chief reformer does not clearly articulate what the impending crisis is, when it is coming, and why.
Charles Krauthammer is a 1987 Pulitzer Prize winner, 1984 National Magazine Award winner, and a columnist for The Washington Post since 1985.
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