Security Blanket: How Social Security Can Save Us All

Thank god, Bush failed to privatize Social Security. Now it can help to rescue the economy.

—By James K. Galbraith

May/June 2009

it's not widely enough appreciated just how hard this economic crisis is going to be on the old. Why? Because unlike the working population, they are often, well, no longer working. And while the laid off are, of course, in deep trouble, those who hold on to their jobs in a depression do fairly well. Their costs (like gasoline) tend to fall more than their incomes. That means real wages rise, as indeed they have, thus far, in this crisis.

But the elderly tend to live off their assets. These include homes, already down by nearly 30 percent nationally and much more in certain parts of the country. They include corporate stocks, often in 401(k) accounts, down by 50 percent or so, so far. They include cash and bonds, which earn the interest rate—enough said. And there's not much else. A sharp decline in any one of these would be a problem; the simultaneous crash of all three is a calamity for the ages—and the aged.