Social Security and the Middle-Class Squeeze: Fact and Fiction about America's Entitlement Programs

Social Security and the Middle-Class Squeeze: Fact and Fiction about America's Entitlement Programs

Social Security and the Middle-Class Squeeze: Fact and Fiction about America's Entitlement Programs

Social Security and the Middle-Class Squeeze: Fact and Fiction about America's Entitlement Programs

Synopsis

At the outset of his second term, President Bush's proposal to partially privatize Social Security has touched off a debate of enormous proportion. Disentangling the rhetoric and hyperbole from fact is essential for anyone trying to evaluate the potential merits or pitfalls of the plan. Leonard and Mark Santow- a father-and-son team who integrate two different political viewpoints (fiscally conservative and socially liberal, respectively)- offer specific recommendations for improving Social Security, Medicare, and Medicaid in socially responsible ways that relieve some of the stress on the middle class and promote upward mobility. Explaining sophisticated economic concepts in layman's terms, the Santows expose myths about how entitlement programs actually work, arguing, for example, that while the financial state of Social Security gets most of the press, Medicare and Medicaid are in much more serious trouble. They integrate conservative and liberal viewponts to propose a package of reforms that includes both tax cuts and increases and an overhaul of the government's economic forecasting system.

Excerpt

I have known Leonard Santow for most of my professional career. We first met in the early 1960s when he joined a prominent Wall Street government securities firm after serving as an economist at the Federal Reserve Bank of Dallas.

Our friendship has endured for many years; and I, therefore, do not write about this book from a distant perspective. For more than forty years, Len has been a member of a [Foursome] luncheon group that meets every few months. Len, Albert Wojnilower, and I have been members of this group from the start. Paul Volcker was also part of the original group. As Paul's responsibilities changed, others took his place—Guy Noyes, Rimmer de Vries, Charles Sanford, and, recently, Martin Leibowitz.

The [Foursome] Luncheon never has had an agenda. The discussions are far-ranging. When the subject of fiscal policy comes up, we always listen carefully to Len's views and analysis. On this subject, Len is what I would call an economist's economist. The federal budget is highly complex. It isn't just a matter of receipts and expenditures. There are many line items as well as off-budget activities. Many have seasonal, cyclical, and nonrepetitive characteristics. Len tracks the many budget activities of our government on a daily basis, and his projections have been vastly more accurate than those provided by our government. These projections include several important components. One is the financing needs of the U.S. government. This is not just a matter of taking the difference between expenditures and revenues.

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