How should we talk about Social Security!


Drum returns to the scene of the crime: Last week, Kevin Drum made a rare mistake—and as we noted, it was a doozy.

The analysts cried about his remarks (see THE DAILY HOWLER, 4/28/12). And so, a few days later, Drum returned to the scene of the crime.

How should we talk about Social Security? Drum amended and extended his remarks. But we still think there’s room for improvement:
DRUM (4/30/12): I said last week that liberals should get off their fainting couches and stop complaining every time someone reports that Social Security funding is in trouble. Unsurprisingly, not many liberals agreed with me—and I'm willing to give some ground on my defense of the "bankruptcy" formulation, which is probably suitable only for polemics. Still, the trust fund is running out of money. Social Security is heading toward insolvency. What else would you call a program that can only pay out 75 percent of its promised benefits?
Quite correctly, Drum threw “bankruptcy” under the bus; as used in discussions of Social Security, that term has been grossly misleading. But we wouldn’t be inclined to use the term “insolvency” either. In this context, most people wouldn’t know what that term means!

Drum asks a very good question: “What else would you call a program that can only pay out 75 percent of its promised benefits?” Here’s our very good answer:

We wouldn’t call it anything else! We’d call it “a program that can only pay out 75 percent of its promised benefits!”

People deserve an accurate, clear description of this matter—especially given the disinformation which has long surrounded this question. So go ahead—use a few extra words!

Stay away from technical, shorthand terms! Tell people just what you mean!


  1. The definition of insolvency, one of them at least, is an inability to pay debts as they fall do. That's not an unfair term to apply to a debtor who is only able to pay 75% of an amount promised.

    1. But since SSN isn't a debtor, that doesn't make clear sense.

      We need to understand Drumm -- "Insolvency" remains a loaded, antagonistic term.

      It is a bludgeon, not an analysis.

    2. Exactly; "insolvency" doesn't apply to obligations which aren't technically "debts". You wouldn't, for example, say the Defense Department is insolvent because it's not funded in 2013, much less after 2033.

      But Drum's tendentious, misleading and alarmist language does makes sense, because like everyone else who uses this language, Kevin seeks SS cuts.

      Here we have a widely popular liberal program, even among the tea-party crowd, which has taken millions of retired people out of what would otherwise have been poverty, but could hardly be described as over-generous.

      But Kevin Drum wants his cuts. Perhaps he too qualifies as "pseudo-liberal", to use Bob's term? With liberals like these....

  2. But since SSN isn't a debtor, that doesn't make clear sense.

    It's easy enough to quibble on these issues, but I just don't think it's helpful. SSN has made promises to pay, or at least promises to pay have been made on it's behalf. At some point in the future, it cannot keep those promises to pay unless something changes. If it doesn't, at that point, calling Social Security "insolvent" is near enough to the truth for government work.

    An obligation to pay someone something that comes due, is pretty much a debt. When the defense department gets a bill for a nuclear missile, it's a debt until they pay the money.

    1. Except there is no asset or liability known as "pretty much a debt", and there is no "obligation to pay someone" his or her social security benefits, beyond what the cash-flow of the system permits.

      It would be easy enough to say that the system won't be able to pay full payments in 20+ years without an increase in collected revenue, and that's a perfectly reasonable statement of the problem.

      But those who claim to be horrified at the thought of benefit cuts in 2033, but then go on to insist that the solution is benefit cuts now, are under some obligation to explain why cuts now are good better cuts later are bad.

    2. "When the defense department gets a bill for a nuclear missile, it's a debt until they pay the money."

      Broken logic reigns!

      For your comparison you choose to contrast *future* obligations of SS to *current* obligations of the defense department.

      The only sensible relation would be to future obligations:

      A more sensible comparison to SS's "promise to pay" future benefits is to our defense department's "promise" to maintain our security in the future*

      So, equally to SS, the defense department is insolvent. That is to say, neither is insolvent.

      The term is just wrong.

    3. Think about it, would Social Security's situation in 2033 really resemble one where someone can no longer pay their bills? With mortgage debt, for example, the debtor couldn't suddenly revise his contract so that he'd no longer be behind on his payments. He would lose his house. Nothing like that is happening here. Cuts would have to be made, but social security is not being foreclosed.

  3. How about "an easily remedied shortfall"?

  4. Maybe insolvency IS a technically apt word, maybe it isn't. It's besides the point that Bob is making, which, to me, is a great one. Why not just say EXACTLY what it is--“a program that can only pay out 75 percent of its promised benefits!” --rather than using shorthand? To me, it's so much clearer. The fact that smart people are disagreeing on this board about the word proves the point, IMO.

  5. “What else would you call a program that can only pay out 75 percent of its promised benefits?”


  6. . It's besides the point that Bob is making, which, to me, is a great one. Why not just say EXACTLY what it is--“a program that can only pay out 75 percent of its promised benefits!”

    Saying that insolvency is a problem is exact enough for all normal purposes. What may be happening here is that Bob is rewriting someone else's comment. He is besides the original commentator's point, as opposed to the original commentator being besides Bob's point. It's really not fair to require the original writer to be responsive to Bob's criticism before Bob actually makes it. In any event, this seems to be so much quibbling, and I would like to get away from that.

    1. Call a spade a spade. Calling it a "shovel" is technically accurate and maybe "good enough for normal purposes" but it's not specific enough for setting policy. All spades are shovels, but not all shovels are spades. If you need to dig up a stump and ask for a shovel, and someone hands you a trowel, you're in for a rough job.

      Saying SS is "insolvent" is not any different to the layman to calling it "bankrupt." It's still a scary term implying that SS will not be there after the trust fund runs out of money. We need to stand firm against such misleading terminology; not just to be pedantic but for our own sakes. We must correct this misimpression in order to head off the fear-based rush to "reform."

  7. Whenever someone decries the fact that, at some future date, the trust fund will run out of money, the obvious answer is that it was always intended to run out of money. Reagan raised the payroll tax to build up a fund that would later be spent down to support the baby boomers retirements.

  8. Just wait a minute. What's being called "promised benefits" are not that at all...They are projected payments based on increases at rates from the past. Much of the problem can be forestalled just by holding back on the increases. Hell, I got a nearly 4% increase in my SS in January and I don't even know anyone who is on SS (and I know plenty) who actually needed an increase.

    1. EXACTLY!!

      There is nothing in Social Security that is any more "owed" than the future expenses of *ANY* part of our government are "owed."

      We project that we'll spend money on the military in the future.

      We don't have that money today.

      Does that make DoD "insolvent?"

      What a load of pure crap!

  9. What does our defense department promise in the future?

    Can it deliver that with no future expenses?


    Well, since it can't & has no guaranteed revenues, it's insolvent, by the logic of Drumm and some.

  10. Underfunded by current projections.
    We might suffer a pandemic that wipes out every human over the age of 65.
    Problem solved.

  11. Anybody know if it's true that current SS obligations are being balanced out of the general fund, now? Are the lock box IOUs being redeemed out of the current federal tax haul?

    1. Never mind. Found it myself...

      "The trust funds have been paying out more in benefits than they have collected in payroll taxes since 2010. The funds, however, will continue to grow until 2021 because they will earn interest on the Treasury bonds, the trustees said."

  12. jesus christ . . . the problem with terms like "insolvent" and "banrupt" and even "underfunded" isn't that they aren't technically accurate. you can have your myopic little arguments over whether "the definition of insolvency is an inability to pay debts as they fall do" all you want, but you're missing the forest for the trees. the problem is that these are terms that (often deliberately) mislead the average joe and jane into thinking that there won't be any money left in s.s. by the time they retire, which is a complete lie. if anti-government ideologues and the financial institutions who would benefit from the privatization of s.s. can convince enough people of this lie, then s.s. can be done away with or privatized, which is exactly what they want.

    1. You beat me to it. And you're exactly right.

  13. Yes, that goes to an issue of persuasion. Is it more effective to point out the defects in the other guy's case, or argue one's own. I have a sense that Republican rhetoric is effective because it's bold, and because they take the initiative. What they say might be ridiculous but they say it consistently, on message, loudly, and with a great deal of scorn for anyone with the temerity to disagree. The Democratic response is often to criticize specific aspects of what they say, but in doing that, Democrats are always playing on the ground Republicans have chosen. Also Democrats tend to get bogged down in quibbling, such as fairly hypertechnical arguments about what words like "insolvent" mean. I can practically hear the eyes glaze over when we talk about stuff like that in the broader arena.

    How's this? Social Security is a promise made between the generations, by Franklin Delano Roosevelt, updated by Ronald Reagan, on behalf of all Americans, one we can afford to keep, one that Democrats want to keep, and Republicans want to dishonor. Or something along those lines.

    1. "But everyone knows that back then there were so many more workers per retiree -- that's changed and now even liberals like Kevin Drumm agree SS is going to soon be insolvent."

      So, no. That won't work.

      It's not "technical" -- SS isn't, won't become, and as it's constructed can't be insolvent.

      No more than the defense department or any other operation of government.

      Now, maybe people are persuaded that the whole government is insolvent.

      Lord knows, there's a whole line of bullsh!t being fed to us on that as well. But that's a different problem, and it's not a "problem with Social Security."

  14. More people should also be pointing out that "75% of projected benefits" is still more money than is being paid out in benefits today. It's just not as much more as we thought retired people would be getting.

    More importantly, there are ways to fix that problem that don't involve cutting benefits (is there a dumber solution to the problem of a projected benefit shortfall?).

  15. One thing I haven't seen mentioned here is the so-called "payroll tax", which is actually the social security tax listed on your pay check stub (and taken out of your check). That tax (labelled SS tax on your stub) was increased a number of years ago, when the prospective problem with SS payout was finally acknowledged. The "payroll tax cut" is a roll-back of that increase. Those in the political establishment who are complaining that SS will go insolvent because it's an inefficient government program (and because they want to put the money into their financial system instead), are also those who want to cut the tax for political reasons (so people will vote for them and so they'll spend more money at Walmart and send it to China).

    Another interesting fact: A large chunk of cash has gone into the SS system on phony SS numbers, out of the paychecks of illegal immigrants. I've not seen any attempt by the SS Admin to challenge any of these numbers; they seem to be just entering the phony numbers into their db and putting the cash into their accounts so they can perform current payout. I've heard a figure of $600,000,000,000 over the past few decades. Will the illegal workers ever get to collect on what is due them in SS at retirement? Not if they have to prove their citizenship to get it.

    If this is really a problem (I've only heard one report on it so far), one thing I can't figure out is, what do they do when they go to enter a phony number and they find out that there's already a legit number for a real account in their db? Do they just shine it on and add the cash to the real account, or do they maintain the phony number separately and apply it to the second name (giving a new meaning to "double-entry accounting")? If it's the former, some folks are going to get some unexpectedly large payouts someday. If it's the latter, I think you could call that "cooking the books".

    The fact that not much has been made of this indicates, at least to me, that there is some real collusion going on here, a bald acceptance of illegal activity. Since SS numbers are the default for an identity number in the US (despite the original intention of the SS law), you'd think the Dept of Homeland Security would want to become involved. Somebody in government would want to talk to somebody else about this. I guess it's more important to monitor people's water bottles at the airplane gate.