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Comment by trevelyan | Hacker News Reader

1. Social security reform was a core part of the Democratic platform in 2000. "I will keep Social Security in a lockbox, and that pays down the national debt and the interest savings I would put right back into Social Security." (Al Gore, Oct 4, 2000). Put simply, the Democratic policy aim was to divert the surplus into paying off the debt while preventing lower interest rates from spiking government borrowing/spending by also putting interest savings into the trustee account. You can compare this with the Republican plan at your leisure.

2. Your characterization of the "feasibility" of the social security program is wildly inaccurate. Seriously, instead of turning yourself inside out trying to claim that Republicans didn't setup a system that had workers pay MORE into the system than they were taking out for 30 years, why not just roll back the Bush tax cuts and call it a day?

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I think it will take more than rolling back the Bush tax cuts. If no entitlements changes are made, it would take roughly twice the GDP of the entire world:

"Add together the unfunded liabilities from Medicare and Social Security, and it comes to $99.2 trillion over the infinite horizon. Traditional Medicare composes about 69 percent, the new drug benefit roughly 17 percent and Social Security the remaining 14 percent." –Richard W. Fisher, Dallas Federal Reserve President, May 28, 2008 [1]

1. http://www.dallasfed.org/news/speeches/fisher/2008/fs080528....

I agree that Americans pay far more for health care than they should. I agree that Bush's medicare giveaway to industrial pharma was grossly irresponsible and that it has contributed a massive amount to the crater that currently is US fiscal policy. And I do not honestly know how people who consider themselves conservatives could support either that or the tax cuts, especially when the United States was on course to actually pay off its national debt.

Returning to the issue of social security, the statistic Fisher cites comes from Table IV.B6 of the trustees’ report, which is extremely conservative in its assumptions (assuming essentially zero productivity growth over the next 50 years) and thus - even at the worst - would require only a minor tax addition to permanently solve without reducing benefits.

I do not much like your suggestion that since the Republicans instituted tax cuts the surplus is gone and there's nothing we can do about it, but will add only that if Gore's proposal had been adopted (Republicans at the time were championing the terrible idea of dumping social security funds into the stock market while cutting top-end taxes), even the "infinite horizon" figure would be nowhere near where it currently is and it would likely be possible to reduce the payroll tax or increase benefits. And given all this, I don't know how to reconcile your claim that this is not a Republican problem with the fact you claim to be a rational fiscal conservative.

I quite agree with you (and Fisher) that the Social Security system's problems are solvable (you might have confused me with winestock). My point was that SS is a distraction–Medicare dwarfs the other entitlement liabilities–and it will take more than rolling back the Bush tax cuts to bring about budget surpluses.

Apologies for the mix-up. Point well made.

Social Security has very well defined costs that are manageable if you implement some reforms.

Medicare is a another story altogether. Fact is, a 1960-style PPO for every old person just isn't sustainable when health costs rise like 13% per year.

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