God Knows I Shouldn't do this ....

.... since he's on my side and all, but Will Wilkinson is a bit over-wrought in his proclamations of coming fiscal doom.  While arguing in support of reforming Social Security, Wilkinson writes:

A sustainable fiscal policy has an FI of zero. The estimated FI is about $47 trillion. That's real money. To get the gravity of the problem, think about this: Holding other options fixed we could wipe out the FI if we (pick one):

....

-- raised payroll tax collections by 96.7% [!].
....

An 96.7% increase in payroll taxes would put the tax at about 12.5% of the first $80,000 in yearly income (with another c. 12.5% paid by the employer).  That's a significant increase, yes, but it's not the insurmountably amazing increase that Wilkinson appears to suggest. 

Now, Wilkinson also addresses the real reason to reform Social Security -- not that there's a pressing crisis, but because (as I've written) it's simply bad policy. 

(Via Andrew Sullivan.)

Comments

[Oberon]

How many of these privatization plans will just make the "crisis" worse?

If it were up to me, I'd scrap social security entirely and just make it federal welfare payments to old people who are poor. Problem solved.

But I don't see how putting another $2 trillion hole in the budget is supposed to prevent a crisis.

[Chris]

Whoa! I initially read that guy's name as Wil Wheaton. I was wondering what the hell an ex-actor was doing analyzing Social Security.

Time to pull my self away from blogs...

[felixrayman]

DeLong says it best:

We are indeed facing a comprehensive fiscal crisis in the General Fund. But Wilkinson makes no mention of the triple origin of this crisis: (1) runaway health care spending on Medicare and Medicaid, (2) the Bush tax cuts, (3) failure to plan for the repayment by the General Fund of its debt to the Social Security. Why not mention the origins of our comprehensive fiscal crisis? Because it would lead to the question, "Why is Bush dinking around with Social Security, then?" And the answer--because he's incompetent--is not one Wilkinson wants to plant in people's minds.

[Ripper]

Twenty five percent of most incomes for one Ponzi scheme! How about we build a time machine and send back a pack of wild dogs to devour the thief who created this monstrosity? How's twenty percent of all Blue State income for seed funding?