Blog on the Run: Reloaded

Friday, December 13, 2013 7:08 pm

The New York Times does not understand Social Security


For evidence of this, I offer the following email exchange between me and D.C. bureau reporter Jonathan Weisman. I first wrote him regarding this article, in which he stated as fact:

Some conservatives feel betrayed, as they often have since the Republicans took control of the House in 2011. Representative Jim Jordan, Republican of Ohio, said the House Republican conference agreed in the spring that spending levels exacted by the sequestration cuts would not change unless Congress and the White House could strike an accord to control the long-term causes of the rising costs of the federal debt, Medicare, Medicaid and Social Security.

Leave aside for the moment that the actual biggest drivers of federal deficits, and thus the growing national debt, are, in fact, NOT entitlements:

The key fact on which I wish to focus is that Social Security does not contribute to the federal deficit AT ALL. This is a simple and widely understood fact with which the reporter took tendentious issue before throwing in the towel, as shown:

On Thu, Dec 12, 2013 at 2:26 PM, <ordercs@nytimes.com> wrote:

Email: lex.alexander@gmail.com
URL:Your budget-deal story
Comments:Jon, how many times does it have to be said before it sinks into the heads of reporters for the Times Almighty? SOCIAL SECURITY DOES NOT CONTRIBUTE TO THE DEFICIT. It is funded by contributions that, since 1983, have been accumulating a large surplus to be used to pay retirement benefits to the Baby Boomers. Now that Baby Boomers have begun to retire, that surplus, which peaked at around $3 trillion, is being drawn down … just as planned in 1983. There is enough of a surplus that SocSec can pay 100% of expected benefit demands until the mid-2030s and, with continuing FICA withholding revenue, about 80% of benefit demands pretty much forever after that even if we do nothing at all to Social Security. And with small changes (raising the cap on income subject to FICA withholding), we could have SocSec paying 100% of benefits pretty much forever.

Once again: Social Security does not contribute in any way, shape or form to the government’s operating budget deficit. And this isn’t just a matter of opinion, this is an error of fact so egregious that it demands a published correction. My next stop is the public editor, for that very purpose.

Best,
Lex Alexander
Greensboro, NC
www.lexalexander.net

On Thu, Dec 12, 2013 at 2:35 PM, Weisman, Jonathan <jonathan.weisman@nytimes.com> wrote:

You are simply wrong here. Since 2010, Social Security has been operating in deficit since 2010. As the annual trustees report said, Social Security’s “cash-flow deficit will average $75 billion between 2013 and 2018 before rising steeply” http://www.ssa.gov/oact/trsum/

It is true that the system is now cashing bonds it has been given by other parts of the government that have “borrowed” from its surplus over decades. But the fact is, every bond cashed must be paid in cash by the U.S. government and the taxpayers. Social Security as a system is not in debt yet. It is redeeming what is owed it. But those redemptions ARE driving the the debt upward, along with Medicare, Medicaid and other programs impacted by the aging baby boom.

On Thu, Dec 12, 2013 at 2:56 PM, Lex Alexander <lex.alexander@gmail.com> wrote:

OK, fine, if you’re not going to believe me, how ’bout walking down the hall or picking up the phone and talking about it with your colleague Paul Krugman, OK? Or, hell, economist Dean Baker at the Center for Economic and Policy Research, or Brad DeLong at Berkeley, or … pretty much any half-sentient economist not on a corporate payroll. Will you do that for me? Please?

Best,
Lex
On Thu, Dec 12, 2013 at 3:01 PM, Weisman, Jonathan <jonathan.weisman@nytimes.com> wrote:

I am aware of their position on this. They are saying Social Security is solvent because it has trillions of dollars in bonds that are real and owed to it. That is true and it is a valid position. But Krugman, DeLong et al also know that as those bonds are redeemed, the cash must come from the Treasury. That is why Larry Summers wanted to wall off the Social Security surplus, to run large surpluses for the day when the bills come due. That did not happen. Now we are paying the piper. What liberal economists would say is it is simply unfair to make Social Security and its recipients pay for the rest of the government’s profligacy (and maybe theft).

Ask them. (Krugman is at Princeton, not in the building)

On Dec 12, 2013, at 4:27 PM, Lex Alexander <lex.alexander@gmail.com> wrote:

Had the government borrowed the money for its deficits from, say, a private bank, would you seriously argue that the private bank is contributing to the deficit? No, you would not; it would be ridiculous. But, in part, that’s exactly what the government did: It borrowed, in the form of U.S. bonds, not only from the Social Security Trust Fund but also from investment banks, commercial banks, institutional investors and individuals. So how is Social Security “contributing to the deficit” when these other bond holders are not? Or are you going to argue that they ALL are “contributing to the deficit”? That argument, though also basically silly, at least would have the benefit of being consistent and contextually complete.

Best,
Lex
On Dec 12, 2013, at 4:30 PM, Jonathan <jonathan.weisman@nytimes.com> wrote:
OK, whatever

Jonathan Weisman

New York Times
* * *
So that’s the kind of intellectual firepower the Times is assigning to the biggest domestic-policy story of the week. Good to know. I’ve emailed the Times’s public editor, for all the good that will do.
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