Berkeley's J. Bradford DeLong thinks Senator Boxer is smart to listen to him. And what conclusion does the senator draw:
So clearly, Social Security is not in crisis, is not bankrupt, and is not collapsing.
Yes, there is a challenge we should address.
Have we ever faced a similar Social Security challenge before? Yes. During the Reagan presidency in 1983. Working together, Democrats and Republicans, we resolved the challenge then just as we can do now. So why would an otherwise optimistic George Bush turn into a prophet of pessimism on Social Security?
Oh, maybe because he's aware that; 1. The 1983 tax increases and benefit cuts did not resolve the issue (hint: we're right back to being challenged).
And that, 2, Social Security taxes have been raised by a factor of over 14, for some people, over the years of its existence, and that hasn't solved the problems yet.
That's right, when Social Security began, the tax rate was 2% on a maximum of $3,000 of income, for $60 in taxes.
In 2004 dollars that would be about $787. However, not only has the tax rate been increased to 12.4%, the maximum income taxed has also been raised to $90,000, giving a max tax of $11,160.
Without resolving the fundamental problem.
Not to mention the opportunity costs to the workers who have been deprived of alternate investment uses of their taxes.
Wethinks the lady doeth protest too much.