Bob Cropf

Is Social Security in danger?

In Social Security on February 22, 2009 at 2:01 PM

Two contrasting views on whether the Social Security program is in trouble. The first one is in the latest issue of the Regional Economist, an online publication of the Federal Reserve Bank of St. Louis. The article by staff economist, Michael Pakko, argues that the program is in need of reform as a result of the cumulative effects of climbing US debt, the growing deficit and “The retirement of the Baby Boom generation and a slowing rate of growth in the labor force will create a demographic time bomb in which entitlement growth threatens to swamp available resources.”

The second article is in the liberal newspaper, The Nation, entitled “Looting Social Security” by William Grider. Greider argues that the program is not in financial trouble as many critics claim. Instead, there is emerging, according to Grider, an attempt by 82-year old billionaire, Peter Peterson to undermine the government’s retirement program. Grider claims that Peterson’s

“most blatant distortion is lumping Social Security, which is self-funded and sound, with other entitlements like Medicare and Medicaid. Those programs do face financial crisis–not because the elderly and poor are greedily gaming the system but because the medical-industrial complex has the profit incentive to drive healthcare costs higher and higher. Healthcare reform can solve the financing problem only if it imposes cost controls on private players like the insurance and pharmaceutical industries.”

Two differing, recent perspectives on the fate of the Social Security system, a program that, no doubt, will come under increasing scrutiny in the months ahead in light of entitlements’ tremendous impact on the budget deficit.

–BC

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