False Alarm: Why the Greatest Threat to Social Security and Medicare Is the Campaign to "Save" Them (Century Foundation Book) Review

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(More customer reviews)Joseph White is an Professor in the Political Science Department of Case Western Reserve University. The 'Foreword' notes that the discussion about the future funds does not address the more important topic of productive capacity of the economy in 50 or 75 years (p.xv). Most politicians and economists have a poor record in forecasting future events (p.xvi). There are a number of reasonable options available. The word "entitlement" is used for prejudice against Social Security, which is earned and not granted. The 'Preface' explains the major parts of this book and its 247 pages of text, 64 pages of notes, bibliography, and index. One flaw in this book is the lack of a short summary aimed towards a general audience. It prevents its message from being widely received.
Chapter 1 tells of the propaganda campaign about the need to save Social Security, as if there is some horrible event that will occur in 30 or more years. The biggest expenses for government are education and Social Security, but only the latter has a dedicated source of financing. Some proposed solutions to "save" Social Security and Medicare are designed to destroy them (p.5) These schemes use ignorance and fear to sway opinions (p.8). The author points out the ignorance about the proposed changes to Social Security (p.9). Projections about the future depend on assumptions, which are based on what a person would like to see (p.11). The author suggests modest changes are all that is needed at this time. Future generations will solve future problems. The "irresponsibility" is to make changes when you don't know what will happen and do unnecessary damage (p.12). Cutting Social Security and Medicare may be good for the budget, but the government exists to benefit the people, not the budget (p.13).
The advantage of social insurance is explained (p.20). The length of life and need for retirement income is variable. You would need to save the maximum for a worst case situation. But if the money is pooled then people would be protected as a lower cost. The plan for social insurance was a reaction against the Townsend Plan which would pay for pensions out of general revenue. Doing nothing was not an option. Benefits are earned, not given, or won in gambling in the market (p.22). Page 23 explains the redistribution of benefits. Having a pay-as-you-go system also keeps payroll taxes lower (p.24). The cost of living adjustment started in 1972 [after Nixon devalued the dollar in 1971]. Another question is when to finance benefits from general revenues (p.25). [Should capital gains and dividends be taxed?]
Medicaid is given and means-tested; it is not earned. It has both state and federal features, and is less reliable since it varies as t changing income (pp. 34-35). The author points out that people pay taxes for public education even when they receive no benefits (p.36). [Yet people correctly complain against the excessive costs of public education that is paid by regressive taxes.]
Social Security and Medicare allow the retired to live with dignity and security in their old age without becoming a burden on others. The debate over Social Security is not about affordability" but of politics: what should be done (p.38).There is a hidden agenda to the attacks on Social Security, one that proponents dare not mention to the public because it is anti-human or anti-people.


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