Letters
Social Security —
Thoughts &
Corrections
Dear Editor:
I wish to point out two errors and one misconception in your otherwise
excellent, thoughtful piece on Social Security
(March 1999).
The cap on income taxes by Social Security in 1999 is no longer $68,400,
as you state; it is now $72,600 and has been since January 1.
Second, economist Dean Baker errs when he says removal of the cap would
generate about three-quarters of the projected shortfall: It would generate more than 100
percent of the shortfall. The long-term (75-year) shortfall in revenues when compared to
expenditures has been estimated as between 1.8 percent to 2.2 percent of the total
national payroll — that is about $77 billion annually, even if we assume the more
pessimistic estimate (2.2 percent). But removal of the cap would generate about $80
billion annually.
Lastly, the misconception: You warn that the ratio of workers to retirees
by 2030 would drop to three to one (that is, three workers to every retiree), and you
conclude that this "spells trouble." What you neglect is the dependency ratio,
which would include more than the ratio of retirees to employees; it would include
children. The number of children is decreasing even more rapidly than the number of
elderly Americans is increasing. Thus, the dependency ratio will be lower in 2040 than it
was in 1960, and the burden on workers will be less, not more.
Those who want to junk Social Security will admit this (when pressed!) but
quickly add that children are cheaper to support than elders, whose medical expenses are
greater. But by using a cut-off age of 18, they avoid including college expenses as part
of the cost of supporting children.
— Marvin Mandell,
West Roxbury, Massachusetts |
