Posts Tagged ‘Social Security’

Social Security: Still Fine

Wednesday, May 13th, 2009

by Brien Jackson

Of course the hubbub of the day is going to be the annual Social Security trustee’s report, if only because it paints a bleak picture on its face, and scaring people is always good for television news (I’m avoiding the Washington Post editorial page today, for obvious reasons), but ultimately, the report doesn’t really strike me as that bad.

The main takeaway seems to be two thing:

1. Social Security begins paying out more than it takes in on a yearly basis in 2016.

2. The Social Security Trust Fund runs out (that is, Social Security becomes insolvent) in 2037, 4 years earlier than was projected last year.

Now, there’s a couple of big caveats that Fred Hiatt and Pete Peterson won’t bother to tell you. The assumptions for future revenues are based on a projected baseline for growth in the next few decades. Obviously, no one really knows what’s going to happen to the economy 20 years from now. Someone could invent, say, an amazingly awesome new fuel source that creates millions of jobs overnight, sends growth through the roof, and provides a huge influx of cash to the government (we used to call this “the 90’s.”) In this scenario, “unexpectedly” high levels of growth would change the equation, providing more revenue than projected. On the other hand, there could be a global ebola pandemic 4 months from now that kills tens or hundreds of millions of people, decimates the global economy, and creates a situation that makes the Great Depression look like a weekend in Versailles. In that scenario, revenues will be much lower than expected (basically zero), very few people will be working, and Social Security insolvency will come sooner than this report projects. Of course, we’ll also have a lot more important things to worry about than Social Security, but you get the idea.

But the important takeaway, as far as I can tell, is this; Social Security is a pretty fiscally durable program. I mean, consider that we’re probably at, or near, the nadir of what most economists expect to be the deepest recession since the Great Depression, and the decreased revenues expected for Social Security are such that, on paper, insolvency is only reached 4 years earlier. That’s really not that big of a hit when you consider the present economic situation. And that’s not to say the actuarial problems don’t exist, just that they’re really very minor, and can be fixed with very minor tweaks to the financing mechanism.

Talk Radio Liberals Watch: Always Right

Monday, March 9th, 2009

by Brien Jackson

With the budget coming out and some more substantive things in the hopper, I promise I’m going to scale back these type of posts, but this missive from Jane Hamsher is simply too egregious to let go. The matter in question goes back to the run-up to the fiscal responsiblity summit, when a lot of progressives, notably Hamsher and Digby, were absolutely foaming at the idea that the Obama administration was going to cut social security. Someone in the administration talked to Ezra Klein, and told him that social security was not going to be on the table, and that they were going to explicitly argue that healthcare reform was a much more pressing need than anything related to social security, which, coincidentally, is exactly what happened.

Without sugarcoating things, what Hamsher is doing is straight out of Orwell. Ezra’s source was completely accurate, at multiple points, but Hamsher makes multiple references to Ezra being “lied to.” Karl Rove couldn’t pull off that sort of up-is-downism with a straight face. Moreover, Hamsher references a completely unsourced, even anonymously, throwaway line from a New York Times report about Obama’s relationship with labor as evidence that she is really right, which is, obviously, pretty ironic, but also underscores the real point to Hamsher’s post.

Hamsher is employing an old right-wing trick, in which the writer is always right, no matter what happens. If it turns out that they’re spectacularly wrong, it’s really just proof that they’re right. Digby, I’m sad to say, has been using the exact same slight of hand to avoid facing up to, well, being completely, loudly, wrong. To wit, most people would look at the discrepancy between what Ezra reported and what Digby/Hamsher were screaming about and conclude that Ezra is well sourced, and Digby/Hamsher were somewhere between wildly inaccurate and slightly paranoid. But, to hear Hamsher and Digby tell it, they were never wrong, rather it was their efforts who forced the administration to change course. So, on top of being right all along, they’re also Very Important People. There’s a word for this; delusional. I like Digby as a writer (Hamsher not so much), but she doesn’t have the political influence to push a local state legislative candidate, let alone to move the White House. I mean c’mon.

I don’t really care much about the anonymous source question (and neither does Hamsher, as she lays bare, she ust picked up Greenwald’s critique to take another shot at Ezra because she’s pissed off he was right). I think Greenwald is being a bit flippant, and doesn’t seem to have considered the fact that the sources can always hang up on the reporter if the latter refuses to grant them anonymity. Or maybe Greenwald thinks that’s a preferrable alternative, although I wouldn’t agree. I also tend to agree with Ezra; there’s no reason to burn a source that’s giving you accurate information. If you feel like you have a source who is routinely lying to you, then yes, you should probably burn them, because that’s a story in its own right. But in this case, not only was Ezra’s source not lying, he wasn’t even mistaken. He was exactly right, something that is understandably a foreign concept to Hamsher.  But what really disturbs me is the reaction. Hamsher’s post has nearly 70 responses, mostly uncritical of her ridiculous post (and glaring contradiction). Ezra’s response has 30 responses at the moment, nearly half of which are critical of him. And again, for posterity’s sake, in the initial question Ezra was right, and Hamsher was spectacularly wrong. But at least in the narrow segment of commentors on the matter, opinion seems to have lined up behind Hamsher anyway. And that’s very troublesome, and makes me question whether the progressive movement will crumble on itself even faster than the conservative movement did.

Listening

Wednesday, March 4th, 2009

by Brien Jackson

I have a hard time fully respecting bloggers who don’t host comments on their blogs. If you’re going to spout off on the internet, you ought to be willing to host criticism, disagreement, corrections, etc. You can handle the trolls. For the most part, I think it’s just intellectual cowardice and a hiding mechanism. If Ross Douthat had comments, for example, people could instantly challenge his factually dubious assertions and his ever present assumptions that the lower classes are naturally inclined to vote for Republicans. But since he doesn’t, it can only be criticized elsewhere, and he can ignore that and go on like no one ever pointed out he’s wrong. But in some rare cases, I can sort of understand it. Andrew Sullivan, for example, has a very large readership, and so it’s easy to imagine him having a hard time keeping up with comments. And, to his credit, he does seem to read a large amount of emails sent to him, and regularly posts them. So that’s something.

Still, if he had comments, things like this might happen less frequently. Here’s Peter Orszag detailing the fiscal problems with “entitltements:”

Although reforming health care is the key to our nation’s fiscal future, other programs – including Social Security – do contribute to our long-term deficit. The long-term shortfall in Social Security, though, is modest relative to the possible effect of health care on the budget. As I just mentioned, if costs per enrollee in Medicare and Medicaid, grow at the same rate as they have in the last four decades, the costs associated with these two programs would increase by 15 percentage points of GDP—rising from 5 percent of GDP today to about 20 percent by 2050. By comparison, the cost of Social Security benefits is expected to increase by 1.5 percentage points of GDP over this same period, according to the Social Security actuaries, and the system, without any changes, is expected to be able to pay full benefits through 2041. After we reform health care, the Administration looks forward to working with Congress to strengthen Social Security’s finances.

And here’s Sullivan’s take:

Entitlement reform will happen, somewhere over the rainbow.

I should probably let this go, because Sully’s obsession with “entitlement reform” is pushing the boundaries of Trig-territory at this point. Ezra Klein took him to task recently, and as far as I can tell Sully just ignored it, even though he had been engaged up to that point. But what’s really maddening here is that, once again, you’re seeing someone stake out a position that turns out to be quite inaccurate. “Entitlement reform” does not equal cutting Social Security. There is no fiscal crisis presented by Social Security. Medicare and Medicaid are a different matter entirely, but the problem with those programs is rising healthcare costs. And so the key to “entitlement reform” is healthcare reform. This is a point being made by the Director of OMB, with numbers and graphs and proof, and Sullivan is just ignoring the fundamental point. He keeps going back to the “entitlement reform” well, and he keeps getting smacked down. So he posts some videos and reader emails for the rest of the day, and then comes back to entitlement reform like it never happened. Then he gets smacked down again, and the cycle keeps repeating.

Perhaps if Sully had comments, it would be harder for him to get away with brazenly ignoring the point.