Title: Social Security is a Good Deal for Younger Adults, Despite What Conservatives Claim 
Guest:  Dean Baker, Center for Economic & Policy Research
Release Date:  2/1/24


ANNOUNCER:  It’s You Earned This, the Social Security and Medicare podcast, brought to you by the National Committee to Preserve Social Security and Medicare, and now your host, Walter Gottlieb. 

HOST:  One of conservatives’ favorite tactics to undermine Social Security is to claim that it’s a bad deal for younger people. Of course, that’s not true at all. Social Security has always been a compact between the generations where current workers pay into the system in exchange for retirement, disability, and life insurance when they need it. But conservatives have been trying to rend that compact for more than 40 years. 

HOST:  In 1983, the Cato Institute published a paper entitled Achieving a Leninist Strategy, which mapped out a scheme to divide the generations and undermine Social Security, and they’ve been at it ever since. Our guest today spends a lot of his time pushing back on that right-wing strategy. He is Dean Baker, co-founder and senior economist at the Center for Economic and Policy Research. 

HOST:  Hello, Dean. How are you? 

GUEST:  I’m doing well. How are you doing, Walter? 

HOST:  Well, we’re very wet here in Washington. We’re having torrential rains, but I’m happy to be talking to you. Thanks for joining us.

GUEST:  Thanks a lot for having me on. 

HOST:  All right. So I mentioned in the open the Leninist strategy that the Cato Institute came out with in 1983. Here we are 40 years later, and we see this strategy being deployed now, again, very frequently in the mainstream media. Where is that coming from and who’s behind it? 

GUEST:  Well, basically the same people were behind it 40 years ago. I mean, these are right-wing ideologues. They hate Social Security, and they hate it for a couple of reasons. One is obviously they hate it in and of itself, that it’s a very popular program. It redistributes a huge amount of money every year from the generally wealthier people to more moderate-income people. It’s redistributive in that sense, and by design, that’s not an accident. And the other reason that they hate it is it really is the model social welfare program. So if you don’t like the social welfare state, you really want to get rid of Social Security because that’s an incredibly successful program. It’s very efficient. The administrative costs are way lower than private sector programs. There’s very little fraud and abuse. I remember the Washington Post had a big thing about a decade ago, front-page story, and led in that there were $300 million of improper payments in Social Security to dead people. And if you read through the thing, you go, well, the vast majority of these were mistakes. People die. They don’t immediately report it to Social Security. They collected more than half the money they got back, in other words. And then if you took a percent of what money was paid out over that period, it was like one one-hundredth of one percent. So it’s really a model social program. And if you want to dismantle social programs, Social Security is your best target, because that’s the model for everything. 

HOST:  Point taken. And one tenet of this argument that’s used to pit the young against the old is the greedy geezers myth. And this myth says that older people are way wealthier than young people today. So why should young people support them? And even if some older folks are wealthier, you know, and kick up the average wealth, why is that a spurious argument? 

GUEST:  Well, we have that on the prospects of the elderly and, you know, most are not in poverty. And that’s a good story. I mean, that is Social Security. I mean, because we know without Social Security, most seniors would be in poverty. But most are not living very well. They’re living, you know, comfortable existences, meaning they’re above the poverty line. They can generally pay for their food because of Medicare. They can pay for their health care. But they’re not living very well. We have the data on that. I mean, you’re looking at median incomes and people debate this because there’s some methodological issues. But, you know, $30,000, $40,000 a year, this is not living high on the hog. And you can point to people, you know, $80,000, $90,000 and go, oh, they don’t need their Social Security. And, you know, again, whether they do or they don’t, I just make the point, well, a lot of these people own government bonds. Do they need the interest on the government bonds? And then they will go, well, they paid for that. And I go, guess what? They pay for their Social Security. So, you know, yeah, I mean, could could someone who’s earning $80,000, $90,000 a year from, you know, a pension or other benefits, could they get by with less? Perhaps. But on the other hand, they paid for it and we don’t say that with their government bonds. Why would we say that with Social Security? 

HOST:  That’s a fair point. But they use this greedy geezers myth – and, by the way, did that term come from Alan Simpson? Or when did we first start hearing that greedy geezers line? 

GUEST:  Well, I don’t know if Alan Simpson originated, but he sure did popularize it because he was running around everywhere talking about the greedy geezers driving their expensive cars and their gated communities, and it was one of these things. You just go. Okay, Senator Simpson. You know that probably describes maybe 1% of the senior population and you know that that’s not where most of the Social Security money’s going. And you know you want raise their taxes. I’m all for that, but you know, but that’s not gonna affect the Social Security budget. 

HOST:  And to be clear, I was referencing – I know you know this Dean, but just for the listener – former Wyoming Senator Alan Simpson. It seems to me that what the conservatives are saying is that Social Security is a bad deal for younger people. Let’s explain why that isn’t true. First of all, they pay into the system like everybody else and when they retire they’ll get the benefits too. 

GUEST:  Right, that’s right and there’s you know, much of their efforts has been about saying, oh, you won’t get it when you retire – and I’ve been in this game long enough, as probably of you, that you remember them saying that 30 or 40 years ago. And while those people are now retired and getting the benefits, they constantly say that. 

HOST:  And we like to point out this, this fun statistic – that if you’re a 27 year old – 27 okay, that’s a young adult with two children and a spouse – you have cumulatively two million dollars worth of life and disability insurance from Social Security right now. 

GUEST:  Yeah, and that’s a really big deal. Again, no one anticipates getting sick, dying young, but it does happen, unfortunately, and this is: it gives people insurance. That, again, a lot of people don’t even realize it’s there when they need it. Hopefully they realize and collect it, but, but it’s a really important source of security for basically all workers. 

HOST:  And another myth is that we can’t afford to spend money on programs for other adults because we’re funding Social Security, which has several falsehoods embedded in it. But can you help tease that out for us and debunk that one? 

GUEST:  Yeah, there’s two points in this. First off, Social Security is funded by designated tax. So, in principle, if we cut the benefits, we presumably cut the taxes or whatever. It’s not supposed to go to anything else and that’s something we’d hear to for over 80 years. Again, you could vote to change that, but that is the law as it is today. It’s funded by a designated tax.

HOST:  Dean, you wrote a piece back in October responding to an opinion piece in The New York Times where they were making this very B.S. argument that Social Security isn’t fair to younger generations and the whole greedy geezer thing, and those authors were making the exact point that we were just talking about. Oh gee, this is two conservatives. Oh gee, if we didn’t spend so much on Social Security, we could spend more on single mothers and children and, as you point out, the conservatives are the Republicans. They don’t want to spend money on those programs either. 

GUEST:  Yeah, no, that’s exactly right. It’s just really disingenuous for people to make those arguments, and I will say I know one of the authors, Craig Seuerle. I think he actually would like to spend more money on on those programs. But the vast majority of people pushing for cuts of Social Security are not out there clamoring for more money for kids, for for child care, whatever it might be you don’t tend to find that. So the idea that somehow, if we just cut Social Security, we would have generous funding for these programs for kids, that’s there’s literally zero reason to believe that. 

HOST:  And thanks for sticking up for Craig, because we hit both authors pretty hard when that piece came out. So fair is fair, you know, fair is fair. So what you wrote in response to that piece you said, “We have made a series of policy decisions that have led to a massive upward redistribution of income in the last half a century.” And you say the impact of this upward redistribution on the income of young workers dwarfs the impact of demographics, and I think by that you meant it dwarfs the impact of all these arguments about which generation has more money and which has less. You’re saying the issue and the reason young people are struggling is because of income inequality, not because they’re paying into Social Security. Do I have that right? 

GUEST:  Yeah, exactly, and this is a really crucial point. So if we look at the, the post-war boom following World War II – I have to specify World War two because we’re getting old enough – that’s distant past – but we have 30 years of fantastic growth that was more or less evenly distributed, so everyone shared in the benefits. You look ’47 to ’73. It’s 25 years, but anyhow we had very good growth and was evenly shared. So the typical worker, minimum wage workers, they got more or less the same gains as everyone else. That stopped, you know, particularly beginning after 80, huge upward redistribution. If the median wage today, so the middle worker for all workers, gets about $23 an hour give or take. If their wage had kept pace with productivity as it did over that period, ’47 to ’73, it’d be over $40 an hour. What they pay in Social Security, Medicare taxes is trivial compared to how much they lost due to upward redistribution over the last half century. So what should we be focused on if we care about young people? 

HOST:  So in other words, young people have a lot bigger problems than paying that 6.25 or whatever it is percent tax on their income so they can have all these Social Security benefits. 

HOST:  Exactly. I mean, if they got their fair share of the pie, if they got the same share of the pie that young people were getting 40 or 50 years ago, they would be so much better off regardless of what happened with Social Security taxes. So basically, we’re hiding the ball. What really matters is the upward redistribution. And again, Social Security is a tremendously important program that we should all be prepared to defend on its own merits. But that’s not what the taxes for Social Security is, not what’s making life difficult for young people. It’s just dishonest to imply that’s the case. 

HOST:  And you know, in fairness to Gen Z and millennials and younger Gen Xers, they do have a lot of challenges. There’s student debt. There’s the fact that a lot of them are having trouble affording a house. A lot of them are having trouble saving for the future. We do sympathize with that, right? We’re just saying Social Security is not the villain here. 

GUEST: Yeah. And, you know, if you look at the people who have been supporting things like increased funding for child care, free college, student debt cancellation or, you know, partial debt cancelling, however you want to cut that, overwhelmingly, those are the people who support Social Security. And the people who are looking to cut Social Security are overwhelmingly among the people who are opposed to that. So it’s it’s you know, it’s not a coincidence that you find people who support Social Security also support actions that would benefit younger people. 

HOST:  So I want to close with this because we’re running out of time. These memes and myths about Social Security being for greedy geezers and hurting younger people, they’re coming from somewhere. And it’s my take that they’re coming from very well-funded think tanks, many of them funded by billionaires and big corporations. Is that accurate in your opinion? And how are they so successful in getting their message, having their message permeate the mainstream media, the editorial pages of The New York Times and The Washington Post and some of the news networks more than our message on the other side? 

GUEST:  Yeah, well, they have more money is kind of the bottom line here. And they’ve been at it for a long time. And you have groups like the Peterson Foundation was funded by private equity billionaire Peter Peterson who passed on a few years ago, but his foundation still lives after him. And they’ve managed to secure a position in the media as authoritative sources. So it’s rare you see an article on the budget deficit that doesn’t include someone from the Peterson Foundation expounding their their wisdom, which usually focuses on things like cutting Social Security. So they’ve been at it a long time. They have a lot of money. And I should also point out, there’s a direct monetary interest for many of these people in the sense that if you envision Social Security cut back or eliminated altogether. But that means more money for Wall Street because they’re going to be looking to put more money in 401ks, IRAs. So there’s a huge amount of money there in principle available to Wall Street if they could cut back or in their dreams eliminate Social Security altogether. So it’s not just an ideology, it’s it’s money in their pockets 

HOST:  Or privatized, in which case they could get their hands on those payroll contributions that are taken out of everybody’s paycheck. I just want to ask you for a quick closer. We have a formidable, well-funded campaign of misinformation on the other side. What can we do as protectors and defenders of Social Security? How can we keep young people from believing this stuff? 

GUEST:  Well, I think part of it is going after the media. You know, if reporters are called to account for bad reporting, when there’s bad reporting, you call their attention to it because a lot of them do feel an obligation to try and do honest reporting. And if you can call attention to their to the cases where they don’t do honest reporting, where they’ve clearly made mistakes or gave an incomplete story, in many cases, they’ll be more careful. They may not correct that piece, but they’ll be more careful in the next one. I think that’s worth doing. I’ve been doing it for, you know, 25, 30 years now and I think with some success. So I think it is worth doing. 

HOST:  I think you’ve done it with a lot of success and we appreciate everything you do. How can how can people find your blog, Dean? 

GUEST:  It’s everything that I write at our website, CEPR.net, CEPR.net. 

HOST:  Well thank you again for joining us. I wish we had more time. It’s clear we could go on for another half hour about this very topic. But thanks for your insight. Thanks for fighting the good fight. And we hope to see you again. 

GUEST:  Happy to do it. Thanks a lot for having me on. 

HOST:  And if you want to help us fight the good fight, become a member of the National Committee to Preserve Social Security and Medicare today by visiting ncpssm.org. That’s ncpssm.org. Our engineer today is Shahab Shokouhi. Our editor is Simon Laszlo-Janssen. I’m Walter Gottlieb. And remember, you earned this.