The Joys of Recession

The Social Security Trustees have just projected that the date by which the system will no longer be able to meet all of its payouts has been moved up three years from 2036 to 2033. This has prompted the usual clucking about the need for drastic benefit cuts of partial privatization right now. 

What nobody seems to have noticed is that the primary reason for the pessimistic forecast is the lousy economy, particularly the high unemployment and depressed wages. Social Security is of course financed by payroll taxes. There’s no better way to put the system into the red than to have a recession and to have 93 percent of the gains to go to the top one percent (whose payroll taxes are capped).

In the late 1990s, when we had full employment, in one three-year period Social Security’s Year of Reckoning was set back by eight years, from 2029 to 2037. Full employment would solve all the system’s problems. And if wages rose with productivity growth, as they did until the late 1970s, Social Security would enjoy a perpetual surplus and we could raise benefits. Conversely, an austerity program will help kill the system.

More Joy: The New York Times reports that Mexican immigration to the U.S. has fallen sharply since 2007, according to a new report by the Pew Hispanic Center.

Though repressive policies such as that of Arizona may have played a modest role, the real reason has to be the persistent recession. People don’t come north looking for work when there’s no work.

So for the right-wing, there are lots of things to celebrate about the recession—more grist for attacks on Social Security, fewer pesky immigrants.

This could be a whole new theme: In prolonged recessions, fewer families can afford kids—less fiscal pressure on public schools! Fewer people commute to work, so we can cut public transit. Workers have less bargaining power, so corporations enjoy lower wage costs.

You think I’m kidding? Just listen to the austerity lobby.

You may also like