Federal Reserve Chairman Alan Greenspan warned last week that the nation "will eventually have no choice but to make significant structural adjustments in the major retirement programs."
Translation: Cuts in Social Security benefits are inevitable.
But is the situation that gloomy? A number of economists argue it isn't. A hard look at the numbers suggests that Social Security isn't broken, only in need of minor adjustments.
The Social Security system is in better financial shape than it's been for most of its 67-year history, says Mark Weisbrot, an economist at the Center for Economic and Policy Research (CEPR), a Washington think tank.
Some see a conspiracy on the part of those who don't like the government retirement system.
"When you want to reform a popular system, you have to make the case it's broken," says Lawrence Thompson, a senior fellow at the Urban Institute, another Washington think tank.
Predictably, Mr. Greenspan's comments caused a political firestorm, especially since President Bush talks of tackling the Social Security issue if he wins a second term.
No one quarrels with his basic thesis: The population is aging and health costs are rising. And since the baby boomers start to retire in four years and Americans are living longer, the ratio of retirees to working people will rise in the decades ahead.
Greenspan's solution is to adjust the consumer price index (CPI) or raise the age of normal retirement to make benefits less costly. Some pundits praised the central banker for his courage.
He's just telling "the truth," Paul Gigot, chief editorial writer of the Wall Street Journal, said on public TV.
But some economists see any needed adjustments as modest, and perhaps not even needed at present. Here are their arguments.