PART 1—STILL MURKY AFTER ALL THESE YEARS: Finally!
When it comes to Social Security, the public has heard skillfully-crafted disinformation for the past thirty years.
But finally, someone has made the program’s functioning simple and clear!
Last Friday, Steve Benen reviewed a blog post by Matt Yglesias. Yglesias' post concerned Social Security. Benen said the post made the issue especially clear—so clear that every reporter really ought to read it:
BENEN (9/16/11): Some areas of public policy can be difficult to understand, and can even rattle media professionals who get lost in the details and struggle to ask politicians the right questions."The issue really isn’t that complicated!" But uh-oh! When we read Yglesias’ post, including the passages Benen excerpted, we encountered a lot of murk and confusion—and a groaning omission.
But when it comes to Social Security, the issue really isn’t that complicated. Matt Yglesias had a good item this morning that political reporters covering the 2012 Republican presidential candidates should keep in mind.
(In its overall point, the Yglesias post explains the difficulty of funding “private retirement accounts” within the Social Security system.)
Here’s a chunk of the Yglesias post. According to its own language, the post is designed to explain “how Social Security works.” That said, we’re puzzled by the highlighted section. And uh-oh! Aside from the murk it contains, it contains the echo of a relatively new RNC talking-point, a newly standard piece of scripted disinformation:
YGLESIAS (9/16/11): Television hosts who like to ask Republican Party members politically charges questions about Social Security (you know who you are) really ought to take 10-20 minutes to think about how Social Security works, so that when faced with a superficially plausible answer, you can evaluate whether or not it actually makes any sense.It doesn’t “matter” that Yglesias posted that murky account of “how Social Security works.” What matters is the larger confusion reflected by the highlighted passage. After thirty years of disinformation, even our “liberal intellectuals” can’t seem to explain how this program works.
So to review, roughly speaking we have two kinds of people in America. We have people who are paying Social Security taxes and we have people who are receiving Social Security benefits. For the past several decades, the quantity of tax revenue coming in has exceeded the quantity of benefits being paid out. That is projected to flip around, creating the need to either redirect some additional financial stream into the Social Security system in order to repay the rest of the government’s debt to Social Security or else to reduce Social Security benefits or else to increase Social Security taxes.
The choice among these options is what the Social Security debate is about, if the Social Security debate is about funding Social Security.
In truth, Yglesias’ explanation was quite murky. Benen thought it was strikingly clear!
What’s wrong with that highlighted passage? For starters, we have no idea what Yglesias means when he talks about the possible “need to redirect some additional financial stream into the Social Security system in order to repay the rest of the government’s debt to Social Security.” To our ear, that sounds suspiciously like a certain right-wing talking-point—a relatively talking-point which was designed to confuse and mislead the public. (For details, see below.) At the same time, Yglesias omits all reference to a key part of the Social Security program. He doesn’t mention the Social Security trust fund, which will be “repaying the rest of the government’s debt to Social Security” for the next twenty-plus years!
Can we talk? After thirty years of disinformation, even our most self-impressed liberals can’t seem to explain how this program works! But this is hardly surprising, given the failure of the professors over those thirty years.
Over the past thirty years, a tremendous amount of disinformation has been spewed through the land. A string of talking-points have been designed to disinform average people about Social Security. It’s easy to list these talking-points, which have produced so much confusion. (“The money isn’t there—we’ve already spent it!”) But can you name a single professor who got off his big fat lazy ass to address this attack on democracy?
Can you name a single professor who made it his business to catalogue the talking-points which define this disinformation campaign? Who then tackled these talking-points one at a time? Who informed average people that they are the targets of this ugly campaign?
All week, we’ll be thinking about the ways the economics professors have failed us. (Along with their friends, “the logicians.”) This morning, we’ll suggest the following rewrite of that explanation by Yglesias—an explanation which seemed to echo one of those right-wing talking-points.
In our rewrite, we’ll copy Yglesias’ words as far as we can. In the highlighted passage, we rewrite his work, bringing his presentation in line with bone-simple reality:
YGLESIAS RENDERED COHERENT AND ACCURATE: So to review, roughly speaking we have two kinds of people in America. We have people who are paying Social Security taxes and we have people who are receiving Social Security benefits. For the past several decades, the quantity of tax revenue coming in has exceeded the quantity of benefits being paid out. That is projected to flip around. There will be less of that “tax revenue” coming in than is needed to pay full benefits.To our ear, Yglesias’ explanation was notably murky. We have no idea what he meant when he discussed the possible “need to redirect some additional financial stream into the Social Security system in order to repay the rest of the government’s debt to Social Security.” We have no idea why he omitted mention of the trust fund.
Until roughly 2037, the Social Security trust fund will make up the difference. After that, we will have to reduce Social Security benefits in some way, unless we increase Social Security taxes in some manner.
The choice among those options is what the Social Security debate is about, if the Social Security debate is about funding Social Security.
Yglesias’ explanation was notably murky—but Benen praised it for making things amazingly clear! That is the state of the liberal project after thirty years of disinformation and silence—disinformation from the plutocrats' agents, silence from the professors.
Tomorrow: The autumn of 96
Which talking-point did he seem to echo: We have no idea why Yglesias’ summary excluded all talk of the Social Security trust fund. Instead, he offered this murky construction:
“For the past several decades, the quantity of tax revenue coming in has exceeded the quantity of benefits being paid out. That is projected to flip around, creating the need to either redirect some additional financial stream into the Social Security system in order to repay the rest of the government’s debt to Social Security or else to reduce Social Security benefits or else to increase Social Security taxes.”
Some of that is clear and accurate. It’s true: As we proceed, we may have to increase Social Security taxes. Or, we may decide to reduce benefits. But we have no idea what Yglesias meant by that third possibility—by the claim that we may have to “redirect some additional financial stream into the Social Security system in order to repay the rest of the government’s debt to Social Security.”
We don’t know what he’s talking about in that murky passage. But to our ear, that passage echoes one of the newer RNC talking-points.
Do you know which talking-point we mean? This talking-point is hard to search for. Samples as we proceed.
Good points all around - Yglesias either didn't know what he was talking about or didn't know how to express it.
ReplyDeleteBut how is he one of the top liberal players? I'm not a liberal, but I do wonder how all these people who don't even subscribe to liberalism go around saying that they're liberals. Yglesias has said he doesn't get why income inequality is bad, supports ethnic cleansing in Israel, and supported the iraq war. I don't read his site that often, but whenever I hear about him he's advocating something ideologically in between Evan Bayh and Joe Lieberman.
Perhaps purity tests are out of the question, but maybe writers and pundits should be required to have some sort of liberal worldview before the put up a shingle as a liberal thinker?
The enemies of Social Security are vast in number and they are well funded. We have all the right wing libertarianish think tanks (corporate shills) like Cato, Heritage and The American Enterprise Institute spreading all the anti-SS tripe every day with a lot of air and ground support from the US Chamber of Commerce and the Pete Peterson Institute, to name just a few. On a side note, has anyone else noticed how much air time the C-SPAN channels (including C-SPAN 2 and 3) give to Cato, Heritage and AEI? One or more of those 3 corporate sponsored propaganda "think" tanks are on the C-SPAN channels on an almost daily basis. They are nothing more than phoney baloney so called think tanks paid to pimp for the giant corporations and the billionaire oligarchs. Bernie Sanders has a good plan: no cuts to SS, do not raise the retirement age but do raise or eliminate the wage cap on incomes of $250K and above. Problem solved. The SS trust fund is worth $2.5 trillion and it's earning interest every day. Don't believe the lie that the trust fund is fake phoney IOUs. The SS trust fund is made up of actual real treasury bonds backed by the full faith and credit of the US government. They are special issue but so what, they are still treasury bonds just as valid as those held by China or millions of Americans.
ReplyDeleteI believe that “redirect some additional financial stream into the Social Security system in order to repay the rest of the government’s debt to Social Security” means that the SS trust fund bonds would be repaid in the same way as other federal bonds, using general tax revenue (i.e. not the Social Security payroll taxes).
ReplyDelete@Duke
ReplyDeletePerhaps that is what he meant, but if so, it makes no sense to phrase it that way. After all, you wouldn't be directing additional financial streams "into the Social Security system." Unless I'm mistaken, that debt is accounted for as part of that big "national debt" number spending hawks like pimping.
A paragon of clarity Yglesias' post is not.
The Trust Fund is made up of treasury bonds, which means, by definition, the money is lent to the government for general fund purposes. Like any other treasury bonds, in which the buyer lends money to the government, that must be repaid. If not, the US Government has defaulted.
ReplyDeleteThe Trust Fund is as real as any other Federal obligations. It's established by law, just as it is only law which allows you to puy things with a piece of paper with some pictures and numbers on it. You can any future obligation and "IOU," but the law requires that it be repaid.
What people like Tim Russert with his absurd chalkboard never get -- with the scare language about the Baby Boomers as if the Trustees and the Greenspan Commission are or were a bunch of idiots -- is that the Trust Fund was established for the very purpose of handling the population bulge of the Baby Boom generation. It was intended to be depleted when that bulge was taken care of, which it largely will be by 2030.
We should never be talking about what "will" happen in 25 or 30 years. Indeed, that's irresponsible. These are nothing more than projections (most likely of three scenarios) based on many assumptions about what will happen in the future, that is a highly imperfect process. In 1997, the Trust Fund exhaustion date was projected to be 2029. Just 14 years later, it is 2036. Several years ago, tracking with strong economies, the Chicken Little Date had jumped all the way to 2042. It has fallen back to 2036 with this recession. If we ever pull out of it, the date will start moving back out further into the future.
Because these distant projections are subject to a high level of uncertainty, we should not be talking about making any commitments to do anything at this point -- whether it's reducing benefits or asking for more revenue. There will be plenty of time to get a better fix on whether and to what extent something needs to be done.
"What people like Tim Russert with his absurd chalkboard never get -- with the scare language about the Baby Boomers as if the Trustees and the Greenspan Commission are or were a bunch of idiots -- is that the Trust Fund was established for the very purpose of handling the population bulge of the Baby Boom generation. It was intended to be depleted when that bulge was taken care of, which it largely will be by 2030."
ReplyDeleteWhat's more, the funds it raised were intended to be lent to the government. What do the Russerts of the world think they should have done with the money? A giant piggy-bank? Lending the funds to the government not only effectively makes the funds an investment, but it also reduces the need to tax or borrow from other sources. Far from being some kind of "looting" of the fund, the purchasing of bonds was sensible and pragmatic.
Just one thing about Tim Russert: he's 3-years dead. Who do you have in mind?
ReplyDelete