Harold Meyerson has a dire anti-Social Security piece in the Washington Post today. A friend sent this e-mail in response:

“You may have read today’s column in the Washington Post by Harold Meyerson on Social Security. Meyerson made two common mistakes in his piece that are important for you to consider as the President discusses his plans to save Social Security during the State of the Union Address tonight.

First, Meyerson’s piece in the Post was correct that under current law, benefits are projected to be paid in full until 2042. However, this ignores the real problems for the economy and taxpayers that begin in 2018. Between 2018 and 2042, Social Security will ask the federal government to redeem the bonds in the Trust Fund ($2.3 trillion between 2018 and 2041 in 2004 present value dollars). The cash will have to come from somewhere, whether from taxpayer’s pockets or other government programs. Thus, the costs imposed on society by Social Security’s cash flow deficits mean the problem actually begins in 2018.

Another common mistake is the suggestion that removing the cap on the employer’s payroll tax is a “modest fix.” While it would raise the marginal tax rate on upper-income workers by 6.2%, it won’t bring in as much as some expect. First, most affected workers will probably shift their earnings from wages to other, non-taxed forms of income. Second, there’s no way to save the extra money. Any extra dollars captured between now and 2018 will be sent to the trust fund, where it will be borrowed, spent and replaced with bonds; when the bonds come due, the money will just have to be raised again!”