Stop Sweating Social Security -- the End Is Not Near

Kevin Drum has an interesting article on social security and makes some pretty strong claims that it is not a crises:

The answer is all in the numbers. For instance, the future of Social Security is highly sensitive to predictions of economic growth, and the trustees assume a very conservative growth rate of 1.8% per year. That compares with expected growth of 3.9% this year, a fairly average year for the U.S. economy. Another example: Because young people are the ones who support the system, Social Security projections are also sensitive to immigration rates. Immigrants tend to be young, so the more immigrants, the stronger the system. But despite the fact that immigration to the U.S. has been steadily increasing for more than half a century, the trustees assume not just that it will stop growing - itself a conservative estimate - but that it will actually decline. What this means is that every few years, as reality outpaces the previous year's predictions, the trustees move the insolvency date forward. What's more, there's every reason to think they're still making the same mistake. Robert Gordon, a respected economist at Northwestern University, recently took a fresh look at long-term economic trends. His conclusion? The trustees are continuing to be far more pessimistic than the evidence warrants. His projections, based on recent increases in national productivity as well as more reasonable estimates of immigration, show an economic growth rate for the next two decades that's nearly a percentage point per year higher than the trustees' projections. If you plug Gordon's more realistic numbers into the model that the trustees use to project the health of Social Security, it turns out that the program is solvent for the rest of the century. In other words, Social Security needs no changes at all. Everyone alive today, young and old, will be covered in full when they retire.

I have seen before the argument that we are in a race, between rising entitlement cost and rising productivity. This seems to be a restatement of that idea, with the handicapping going toward rising productivity. I am somewhat optimistic about this myself, although personally I am more concerned about 2018, when the yearly input to social security is projected to fall below the yearly output. Since we are currently spending the excess money on other things, unless things change between now and then this will entail either a dramatic reduction in government spending or a pretty dramatic increase in taxes. Either of these things can negatively impact productivity and if they impact it enough, and in a negative enough way, they might derail this rosy picture Drum is presenting. Perhaps more puzzling to me is why Liberals like Social Security in the first place. It is funded by a regressive tax structure. It represents not a transfer of wealth from the rich to the poor, rather it is more frequently a transfer of wealth from the poor to the rich. Yes, some of it's recipients are needy, but many others are comfortable, in some cases extremely so. So what is to like about it, from a liberal point of view? And why viscerally oppose any change to the current system?