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.
Dean Baker and Mark Weisbrot have no trouble at all demonstrating that even on highly conservative assumptions about economic growth, the much-forecast insolvency of the Social Security system by about 2030 is most unlikely to happen then, if indeed ever.--The Economist
The authors challenge basic assumptions with vigor and intelligence. . . . An absolutely relevant and important analysis, presented with force and clarity, that asks, basically, what kind of a nation we really are.--Kirkus Reviews
Proponents--like George W. Bush--of Social Security privatization . . . typically ignore prospects for a stagnant or falling stock market. In Social Security: The Phony Crisis,
[Baker and Weisbrot] show how a falling stock market could place pressure on both future Social Security payments and privatization schemes because earnings from the trust fund could actually fall.--Jeff Madrick, New York Review of Books
About the Author
Dean Baker is the cofounder of the Center for Economic Policy and Policy Research in Washington, DC. Before founding the center, he was a senior economist in Washington's Economic Policy Institute. He has authored or edited several books, including The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (2006), Social Security: The Phony Crisis (1999, with Mark Weisbrot), Getting Prices Right: The Debate Over the Consumer Price Index, which won a Choice book award as one of the outstanding academic books of 1998, and Globalization and Progressive Economic Policy (Cambridge University Press, 1998, coedited with Jerry Epstein and Bob Pollin). Dr Baker has also written for a variety of professional and general-audience publications. His work on economic policy issues is often cited in the media, and he is frequently interviewed on television and radio. Dr Baker has also testified a number of times before Congressional committees. He received his PhD in Economics from the University of Michigan.
Dean Baker and Mark Weisbrot are codirectors of the Center for Economic and Policy Research (www.cepr.net).