Public Perceptions of Social Security Future Solvency
By Taylor Marvin
Possible presidential candidate Rick Santorum is adamant that Social Security is fiscally unsustainable due to an aging US population, a demographic trend he attributes to abortion.
This is blatantly false. Social Security, as a program, will not face any serious solvency challenge this century. Unlike Medicare and Medicaid spending, mandated social security expenditures are not projected to significantly rise for the foreseeable future. Expenditures will briefly rise as baby boomers age in the next two decades, but this is a one time demographic anomaly that will stabilize by 2035. All in all, the Social Security funding shortfall is a minor, and easily addressed, future issue.
Santorum’s warning about unfavorable US demographics is also false. It’s true that aging populations are a significant challenge to public pension programs- countries with falling populations like Japan and parts of Europe are going to have a difficult time reconciling their falling proportion of workers to retirees in the coming decades. But the United States, thanks to an above rich-country average birthrate and immigration, has a significantly younger population than other developed countries and will largely avoid this problem. Santorum’s concern about a falling US birthrate also ignores the fact that, public pension funding issues aside, a stabilizing world populations is undoubtedly vital to the welfare of future civilization and necessary to avoid large-scale disruptions to the planet’s biosphere and is desirable.
The real issue here isn’t that Santorum’s wrong on this one issue- it’s that the fiction that Social Security is hurdling towards insolvency and the necessity of raising the retirement age has survived so long in American political discourse. This is a minor panic that can be disproved with a few graph and some pretty basic research, but it still dominates discussions of the deficit. Why? The real issue is that the growing projected debt comes down to one problem — medical cost inflation. However, politicians don’t like to discuss this issue healthcare inflation, because it’s an issue that extremely hard to understand and doesn’t have any easy solutions. It’s likely that about half of medical cost inflation is due to the technological advancements that have made more conditions treatable, and having to pay more for increasingly better available outcomes is an issue that won’t ever go away. Correcting inefficiency related costs is a similarly difficult task, on that the ACA makes almost no real effort to attempt. This message — that healthcare costs are going to consume a rapidly increasing portion of the federal budget unless the American healthcare system is drastically, and potentially unpleasantly, reformed — isn’t a message that voters want to hear. They don’t really want to hear that the retirement age should be drastically raised either, but that’s a much easier message for politicians to articulate. The superficial solution to the imaginary Social Security crisis — cutting entitlements — appeals to basic conservative instincts, and would directly financially benefit the business establishment that is an important part of the Republican Party elite. This gives Republican politicians, and to an extent Democrats, a powerful incentive to ignore the real issues at the heart of the deficit issue. Expect a lot of talk about Social Security in 2012.