Social Security: The Phony Crisis

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Overview

Is it true that the Social Security system is in serious trouble and must be repaired? As baby boomers begin to retire, will they inevitably, by force of their sheer numbers, bankrupt the system? Is Social Security a big Ponzi scheme that will leave future generations with little to show for their lifetime of contributions? Is the only way to solve the Social Security crisis through radical changes like privatization or bolstering it with massive new taxes?

According to the authors of this important new study, the answer to these questions is a resounding no. In Social Security: The Phony Crisis, economists Dean Baker and Mark Weisbrot argue that there is no economic, demographic, or actuarial basis for the widespread belief that the program needs to be fixed.

As the authors emphasize, there is virtually no disagreement about the facts of Social Security's finances, or even the projections for its future. Rather, the Social Security debate has been foundering on misconceptions, confusion, and lack of agreement on the meaning of crucial terms.

The authors also take on related issues: that privatization would help save Social Security, that America has a pressing need to increase its national savings, and that future generations will suffer from the costs--especially for health care--of supporting a growing elderly population.

As New York Times columnist Fred Brock recently wrote, "So-called reform of the Social Security system is looking more and more like a solution in search of a problem." In this accessible and insightful work, Baker and Weisbrot seek to cut through some of the myths and fallacies surrounding this crucial policy issue.

Editorial Reviews

Kirkus Reviews

What if the predicted collapse of Social Security is only doublespeak and all the Chicken Little economists' warnings just prodigious flummery? Social Security is truly healthy, say Drs. Baker and Weisbrot, both of Washington's Preamble Center. It simply doesn't need the dire purgatives the putative experts prescribe. There is no dispute about the figures, statistics, or projections cited by the prognosticators when they spy a shortfall along about 2034. But the authors challenge basic assumptions with vigor and intelligence. They question the methodology and even the intentions of those who would renounce the remarkable success of America's great social-insurance program. The advertised deficit in the Social Security fund over the next 75 years, they note, is based on a projected rate of growth that's less than half the last 75. Social Security bookkeeping should be isolated from that of Medicare (which is funded in large part by general revenues). The supposed overstatement of the consumer price index, discovered by experts with their own agendas, may be way off base after all. (At any rate, an adjustment of the CPI would clearly improve the dire predictions for all social programs.) The privatization of the national retirement system—promoted, naturally, by Wall Street—would wreak havoc, based as it is on clearly untenable assumptions over any reasonable period. Demographics show that intergenerational warriors promote a false, poisonous cause. All in all, say economists Baker and Weisbrot, it's not an honest debate. Let's talk about the real problems, they urge. The environment is inexorably deteriorating, the gap between rich and poor is widening, and the rising cost ofhealth care is of paramount concern for the future. So calm down, policy wonks. Let Grandma alone. Your own retirement will be fine if it you let Social Security alone. Its future is brighter than the pundits and politicos would have us believe. An absolutely relevant and important analysis, presented with force and clarity, that asks, basically, what kind of a nation we really are.

Product Details

ISBN-13: 9780226035468
Publisher: University of Chicago Press
Publication date: 9/28/2001
Edition description: 1
Pages: 175
Sales rank: 1,116,588
Product dimensions: 6.00 (w) x 9.00 (h) x 0.70 (d)

Meet the Author

Dean Baker and Mark Weisbrot are codirectors of the Center for Economic and Policy Research (www.cepr.net).

Foreword Acknowledgments
Chapter 1: Introduction
Social Security and Social Insurance The Politics of Non-Issues
Chapter 2: Social Security and its Critics
Social Security's Finances The Disappearing Trust Fund Demography as Destiny Unfunded Liabilities, Ponzi Schemes, and Other Rhetorical Devices
Chapter 3: Generating Phony Wars With Generational Accounting
How Generational Accounting Works How Generational Accounting Cooks the Books Discounting Our Children's Futures Will Education Really Impoverish Our Children?
If Health Care Costs Destroy the Economy, What Will Happen to Tax Rates?
What the Recount Shows How Will Our Children Really Fare?
Rising Incomes, Changing Demographics The Base Case What the Real Generational Accounts Show
Chapter 4: Entitlements for the Elderly: Medicare "Reform"
The Wrong Direction The Wrong Incentives Medicare and Health Care Reform
Chapter 5: The Debate Over the Consumer Price Index
What Difference Does 1.1 Percent Make?
The Boskin Arithmetic The Evidence for an Overstated CPI Substitution Bias Retail Outlet Substitution Bias Quality and New Goods Bias Sources of Understated Inflation in the CPI Inflation for Whom?
The Implications of an Overstated CPI The Boskin Commission's Failed Case
Chapter 6: The Glories of Privatization
A Happy Market, an Unhappy Economy Is There a Way to Beat 3.5 Percent?
The Returns From Privatization: Going Down From 3.5 Percent A Modicum of Privatization
Chapter 7: The Advisory Council and Other Fixes
Three Ideas From the Advisory Council Investing the Trust Fund Other Regressive Cuts Proposals for Means Testing Benefits A Worsening Problem?
The Way to Real Reform
Chapter 8: The Debate Over National Saving
An Economist's View of Saving How Saving Generates Investment Finding a Recipe For Higher Saving The Impact of Investment on Economic Growth Saving Will Not Make Us Rich
Chapter 9: Will the Age Wave Lift All Boats?
The Basic Features of the Future The State of the Nation's Health The Many Homes of the Future Benefits of the Information Boom Opportunities in Education The Future of Work The Downside to the Next Century Fix the Problems, not Social Security
Chapter 10: An Honest Debate
Appendix: The Feldstein-Samwick Plan References

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Anonymous

Posted March 1, 2005

Wonderful and useful book

It is amazing how the authors can explain everything in such a simple way and with so much details and facts. It's a wonderful book for those who still think that Social Security is going broke.
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Social Security: The Phony Crisis

Overview

Customers Who Bought This Also Bought

More About This Book

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Editorial Reviews

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Meet the Author

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Wonderful and useful book