Social Security is not the problem

This is one of these facts that you may have heard before but it bears repeating:

When people say, “the entitlements will bankrupt America,” they’re a) wrong, and b) not talking about Social Security, or at least the shouldn’t be.

The figure below, from CBO, show that as a share of GDP, neither Social Security nor other spending (which includes the discretionary spending that everyone’s all gung ho to slash away at) are driving government spending as a share of the economy. It’s health care. And as I’ve stressed every time this comes up, that’s not a gov’t problem—that’s just a problem. In fact, health costs grow faster in the private than in the public sector.

Which is why I said “a” above is also wrong. It’s not entitlements, it’s Medicare, Mcaid, etc. And it’s not even those that will “bankrupt America.” It’s health care spending system wide that must be brought under control.

Social Security has a funding shortfall too—about 0.8% of GDP over the 75-year horizon. That’s just about equal to the revenue from the expiration of the high-end Bush tax cuts, and less than half from all the Bush cuts. So please don’t tell me we can’t afford this guaranteed pension that provides more than half of their income to more than half of the elderly.

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