Social_Security_Crisis

Social Security Crisis Tony Greener BCOM/275 July 23, 2012 Kai Hintze Social Security Crisis In James Roosevelt’s(2010) article “Social Security at 75: Crisis Is More Myth Than Fact” he claims that that because Social Security has a dedicated income stream that covers its costs and consistently generates a surplus it therefore will stay solvent and remain available for future generations. This paper will analyze the reliability, credibility, and validity of the data used in the above claim and identifies any logical fallacies in the argument. In addition to this analysis of the data a rebuttal will be given to the claim that Social Security has a promising future. The credibility of the claim is in question because the author could be considered an interested party because he served in the Social Security Administration and is the grandson of Franklin Roosevelt and could be interested in preserving his grandfather’s legacy. The claim is deductively valid because if the premise is true that the income stream is sufficient then the conclusion is also true that it would remain solvent and available for future generations. While the claim is valid the premise is false making the argument unsound. In the next section the reasons for believing the argument is unsound will be given. In the article James Roosevelt(2010) states that reserves are sufficient to cover full benefits through 2037, and the income stream would be able to pay for 78 percent of benefits after that, implying that this proves the solvency of the program. The preceding statement is an example of a rationalization fallacy. James is rationalizing that since the income stream is able to cover a portion of the benefits that this makes the program solvent, but to be solvent the program would need to be able to cover all costs and expenses. As stated above the argument is unsound because the premise that the income stream is sufficient is false. According to Social Security Administration in the A Summary Of The 2012 Annual Reports" (2012), beginning in 2021 net redemptions from the General Fund will be required until their exhaustion in 2033 at which time continuing tax income will be sufficient to cover around 75% of scheduled benefits from then on. In addition to the above income shortfall, further pressures could be placed on the program if the government at any time fails to meet its debt obligations. The Social Security Administration states that tax income is invested in “special issue securities” that is then placed in general fund of the Treasury ("Trust Fund Faqs", 2012). This fact was proven last summer when President Obama stated, “I cannot guarantee that those checks [he included veterans and the disabled, in addition to Social Security] go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it” (Matthews, 2011, para. 1). Through the preceding analysis the above argument has been evaluated for its validity, credibility, and reliability. It was determined that the argument itself is biased because it was written by an interested party. The argument is valid, but not sound because the premise that reserves and income stream of the program will be sufficient is false. Lastly, the argument contains a rationalization fallacy in that the author would have you believe the program is solvent even though it is only paying out 78% of its scheduled benefits. References SUMMARY OF THE 2012 ANNUAL REPORTS. (2012). Retrieved from http://www.ssa.gov/OACT/TRSUM/index.html Matthews, M. (2011, July 13). What Happened to the $2.6 Trillion Social Security Trust Fund'. Forbes. Retrieved from http://www.forbes.com/sites/merrillmatthews/2011/07/13/what-happened-to-the-2-6-trillion-social-security-trust-fund/ Roosevelt, J. (2010, August 11). Social Security at 75: Crisis Is More Myth Than Fact. Huffington Post. Retrieved from http://www.huffingtonpost.com/james-roosevelt/social-security-at-75-cri_b_677058.html Trust Fund FAQs. (2012). Retrieved from http://www.socialsecurity.gov/OACT/ProgData/fundFAQ.html