Here's my take on the Social Security situation and why I think the story regurgitated in the mainstream media is mostly agitprop.
There's no question that the demographic trends of the US population has the potential of putting a squeeze on the social security system. The baby boomers, as a class, didn't have enough kids so the calculations that led to the original configuration aren't the same as in the 1930's.
That having been said, it does not mean that the present -- and already changed from the original configuration -- system needs further "adjustment."
The rationale for the need for change in the system is basically that the money earmarked for Social Security benefits will run out in about 2015, according to the projections by the trustees of the Social Security trust fund. Their numbers, however, are taken out of context. The numbers were created as a "worst case scenario" for the purposes of planning, not for a best guess of where the system would most probably be. Thus when these particular numbers are used as a rationale for change, the political agenda of the proponents of the change come into sharper relief.
The actuaries hired by the Social Security trustees projected running out of money around 2015 based on a GDP annual growth rate of 1.8 percent. The problem is, sustained growth rates that low haven't occurred since the Great Depression. Thus either either the actuaries know something we don't know about coming economic malaise (unlikely) or the numbers at the very foundations of the proposed need for change aren't appropriate for use as benchmarks in policy discussions pertaining to the solvency of the Social Security system.
To show you how far off base they are, I point to a study by the significantly-right-of-center Heritage Foundation which shows that since 1970, annual GDP growth has averaged double what the Social Security actuaries have assumed: GDP growth has averaged 3.16 percent per year -- after inflation. If you want to read the study, go to the following link.
Thus, if we can use the past 35 years as a point of comparison, it follows that revenues from Social Security taxation will grow at twice the rate presently predicted. Of course, if the economy grows that the even rosier rates predicted by Bush, the amounts will be still higher. The most important point here is that this salient fact is absent from virtually all "mainstream" debate, a fact for which democrats need to accept most of the blame, as they are in the best position to point out the hocus-pocus which Bush and his ilk are peddling to the public like so much snake oil.
I don't have an argument with having a debate over whether, given GDP growth rates of 3.16 percent, Social Security revenues still won't be enough. If that really is the case, then a meaningful policy debate can proceed, and, I feel, in good faith. But since the present debate is founded on numbers which are negated by historical precedent, I'm compelled to conclude that the "debate" has much less to do with th epublic good than it has to do with the advancement of the agendas of certain constituencies who put the present bunch of policymakers into office.
It is no secret that the banking, securities, and insurance industries have been historical patrons of Congress and the White House. The next question is who will benefit most from the proposed changes? Among others, the banking securities and insurance industries, of course.
In my view, what we're seeing here is a large-scale wealth transfer program from the middle class to the wealthy, one that will take place over the course of a few generations. Because the changes will be slow, they'll go largely unnoticed as a political issue. Instead, we'll just have larger and larger numbers of people who are old and disabled who live in poverty, and who, of course can be blamed for their plight. Once again, the democrats are in an excellent position to point this out, but they are largely silent on the issue. No wonder why: their patrons in the finance business will cut off their campaign contributions if they don't get on the Bush gravy train.
I should add one more point: it seems that the reform of the Social Security tax structure enacted under Bush the Elder (and spearheaded by Alan Greenspan) has made its way into the Memory Hole. We already had this debate, and Social Security taxes went up as a result. The population numbers used for that fix of the Social Security system are no different from the ones being used today. The only difference is the shift in political power away from the middle class, in favor of the rich.