Shame on Tom Brokaw for saying, during the recent presidential debate, that Social Security is broken, and that it forms (along with Medicare) "a big ticking time bomb that will eat us up maybe even more than the mortgage crisis." The widespread claim that Social Security is broken, often-repeated by the media and by politicians in both parties, is complete nonsense.
Read this sentence several times, to counteract the wrongness of the last several hundred news stories you've read on the topic: Social Security is running a surplus and has all the savings it needs to pay all promised benefits until 2046, according to the nonpartisan Congressional Budget Office. Even after that date, it could still pay retirees more real, inflation-adjusted income than current beneficiaries are getting. It's not a problem that the Baby Boomers are retiring because U.S. economic productivity (in dollars per person-hour worked) keeps rising over time. This doesn't produce a free lunch, but it does generate a predictably larger societal pie.
Social Security's savings are held in U.S. Treasury bonds-the exact investment which money managers worldwide are flocking to in droves because it is safe. (In contrast, those who want to privatize Social Security have suggested putting the money into the stock market, which, as we are seeing right now, falls very short in the "security" department.) The U.S. has never defaulted on its sovereign debt, ever. If it were going to start (an idea which Wall Street would fight tooth, nail, and lobbyist), the U.S. would still not default on its bonds to Social Security because these debts are owed to senior citizens, the age group that votes at the highest rate.
This is also the reason why there is no parallel between Social Security and the many private-company pension plans that are in trouble. Those are going downhill because federal regulators have let companies underpay their pension funds and invest them in too-risky speculations. (Also, private companies can simply get away with offering worse pensions these days, now that our country has spent decades undercutting labor unions.)
The government has been trying to underplay its economic mistakes by not including, in official federal deficit figures, the money it is borrowing from Social Security via those treasury bonds. But this fuzzy math is not a problem with Social Security, which is running a surplus. The problem is the borrow-and-spend Bush administration, which inherited a budget in the black, but embarked on expensive wars and massive tax cuts for the rich, both of which the next administration should pull out of.
The widespread misinformation about Social Security is due to a combination of ignorance, groupthink, and right-wing efforts to convince people not to trust government-even in areas, like Social Security, in which government has a decades-long record of working well and efficiently.
In stark contrast, Medicare and Medicaid, along with our entire healthcare system, are broken in a big way. We should focus on fixing them and other problems due to arrive before 2046.
Elizabeth Palmberg is an assistant editor of Sojourners. She appreciates the Center for Economic and Policy Research's invaluable information on Social Security.