A Stitch in Haste

I don’t fisk, but you might want to have a copy of my previous post “Social Security Reform 101” handy as you read through this disgraceful New York Times editorial that perpetuates the lie about there being “no Social Security crisis.” All three of my reform axioms are violated at various points in the piece– see how many you can find.

Some other, well okay, “mini-fisks.”

As it often does with dissenting professional opinion, the administration is ignoring the actuaries. But that doesn’t alter the facts or common sense. If the $10 trillion figure is essentially bogus, so is the claim that Social Security is in crisis.

So if the “correct” figure is only $9 trillion, or $8 trillion, or $7 trillion, then there is no crisis? Does the Times, or Bill Gates, or Donald Trump, or Michael Bloomberg, have a quick cool couple of trillion to keep the system afloat? Oh, and whatever happened to that “Trust Fund” that was supposed to take care of the gap, however much it “really” amounts to — is the Times, finally, acknowledging that it was a fraud from Day One?

Instead, the administration wants workers to divert some of the payroll taxes that currently pay for Social Security into private investment accounts, in exchange for a much-reduced government benefit. To replace the taxes it would otherwise have collected — money it needs to pay benefits to current and near retirees — the government would borrow an estimated $2 trillion over the next 10 years or so and even more thereafter.

Under privatization, people have the option to voluntarily accept reduced benefits in exchange for private, fully-vested accounts. The transition is paid for by borrowing (less) today instead of borrowing (more) tomorrow. This is a bad thing? Oh, and as for “much-reduced” benefits — would the Times care to explain that biased and loaded term given that there is no formal Administration proposal yet?

In any event, doing well under privatization is relative.

So is doing well under Social Security! Ida May Fuller did “relatively” well under Social Security; Louise Outing is probably doing “relatively” well under Social Security. White people with longer life expectancies, meanwhile, do very well “relative” to blacks with shorter life expectancies. On the other hand, a gay or otherwise unmarried (or widowed) worker who pays into the system his whole career and dies the day before he turns 65 is “relatively” screwed: his survivors receive a one-time payment of $255.

An especially grave danger is that investors would withdraw their funds before retirement, a pattern that is pronounced in 401(k) plans. It would be politically very difficult to refuse people access to accounts that were sold to them on the premise that they — not the government — would own them.

Lie! We have restrictions on premature IRA and 401(k) withdrawals. Putting similar restrictions on vested Social Security accounts would pose no problem and are in no way a contradiction to the concept of “private.”

[Social Security's] purpose is not to supplant other retirement investing, but to provide a crucial safety net.

Lie! The purpose of Social Security is to transfer income from young to old regardless of financial circumstances. Low-income current contributors pay the benefits of high-income current retirees. To call that a “safety net” is insolent and nauseating. For Social Security to be a “safety net,” benefits would have to be means tested. They are not. Bet you won’t hear about that little contradiction from the Times editorial pages (or the AARP).

For the Times to accuse the Bush Administration of making numbers up, or selectively touting certain points while downplaying others, or deflecting attention from other political issues, is hypocrisy of the highest order. It gives new meaning to the term “Old Gray Lady” (perhaps it’s more like “Old Gray Readership”? Compare and contrast: network news).

Related Posts:
Social Security Reform 101
Social Security: Return of the Flying Pigs
Waiting for Reform
Social Security: Read It and Weep
The Social Security Meta-Crisis

Similar Posts:

• Social Security Reform Proposal Includes Massive Tax Increase Bush Says No Way!
• Today’s Krugman Social Security Lie
• Social Security: Kerry Lies, Hope Dies
• New York Times on Social Security: Same Old Same Old
• Rock the Vote’s New Scaremongering: Social Security

Filed under: Uncategorized