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NASI releases misleading video on Social Security as tool for teachers

Using flawed logic, “Just the Facts”, a video released by the “National Academy of Social Insurance”, seeks to prove that Social Security Insurance and Social Security Disability Insurance are in good fiscal order.

Comparing the amount of money spent to the size of the economy, the group uses powerpoint-esque animations to help children, communities and college students understand how important and inexpensive the programs are. It’s all propaganda.

In each of the last three years (2009-2012) the Social Security Trustees have released reports showing a shorter time-horizon and larger cost to save Social Security. In 2010, the trustees said that benefits would need to be cut by 22% or taxes raised by 28% by 2037 in order to prevent insolvency. In 2011 that year changed to 2036. In the 2012 report, the trustees say that a 33% increase in taxes or 24% reduction in benefits must occur by 2033. The financial changes and the urgent dates by which they are needed are dismal and getting worse in an accelerating manner.

Social Security has been spending more than it takes in since 1985 and it will likely be generations, if ever, that it returns to surplus budgets.

Some in the media have focused on the $2.7 Trillion surplus that the Social Security Trust Fund reportedly has. Actually, it has loaned all of that money, as it must, to the general fund for Congress to spend as it sees fit. That leaves $2.7 trillion debt that the Treasury owes to Social Security. If Treasury could repay it, and it can’t, that amounts to $8,734 for each American citizen[1] – spread that over your retirement..

The video also focuses on the retirement of baby boomers, which will certainly increase the ratio of payees to payers. What they don’t mention is the rapid growth of the disabled population taking SSDI since eligibility rules were relaxes between 1984 and 1990.

Between 1984 and 1990, Congress and the S.S.A. loosened the disability requirements, especially for children and people suffering from mental disorders. The agency also agreed that it would no longer cut off recipients it thought were “no longer disabled” unless it could show that their medical condition had improved, something that is exceedingly difficult to do. [2]

According to a New York Times editors’ blog post, from 2001 to 2007, disability payments have increased 65% while medical reviews to prevent fraud have dropped more than 75%. SSDI is not going to get better if the government is going to rely on the honor system to police it.

The video is plainly misleading and is intended as a teaching tool in schools and universities as NASI states “The “Just the Facts” video is a tool for schools, colleges, community and religious organizations, and journalists to educate their students, communities, viewers and readers”. A tool for use in schools so that the myth of infinitely maintainable socialized retirement and disability can be planted in the minds of the young. The math, however, is just plain misleading.

sources:
[1] JustFacts – Social Security: http://www.justfacts.com/socialsecurity.asp#financial
[2] The Disability Mess: http://roomfordebate.blogs.nytimes.com/2009/05/07/the-disability-mess/

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