KERRY (1/30/05): President Bush is hyping a phony crisis...You know, Social Security does not run out as the president says and become bankrupt in 2018. It can pay 100 percent of the benefits until 2042, and after 2042, it can pay 80 percent of the benefits. And all you need to do to move Social Security into safety, well into the 22nd century, into the next century, is to roll back part of George Bush's tax cut today.Hopeless! Leave it to the modern Dems—to cite only the facts and figures which are least helpful to their position! In citing the year 2042, Kerry is using the projection of the SS trustees—the gloomiest projection around! According to the CBO, SS is fine for an extra ten years. But Kerry uses the gloomier figures, omitting data which would help inform the public and would favor his partys position. Senator Kennedy did the same thing on Face the Nation two weeks ago.
Its bad enough when journalists cite the trustees figures without providing any context (see THE DAILY HOWLER, 1/28/05). But the DNC message-machine is just hopeless. We wouldnt suggest that the Dems invent spin. But Kerry and Kennedy are boys against men when they insist on using the least helpful figures. Our judgment? To all appearances, this gang doesnt care. Theyll only start to care when you make them.
For the record: Adding insult to injury, Kerry bungled the data he chose to cite. According to the trustees gloomy projections, SS will be able to pay 73 percent of promised benefits after 2042. The CBO says 81 percent of promised benefits after 2052.
By the way, how gloomy is the trustees projection? See our last entry below.
THE SHAPE OF AMERICAN DISCOURSE (PART 3): On January 17, Talk of the Nation provided a perfect example of our inept—indeed, fallen—public discourse. Im still confused, NPR host Neal Conan said, after his guest, economist Gene Steuerle, responded, at length, to a caller named Marilyn (see THE DAILY HOWLER, 1/27/05). But uh-oh! Marilyn had voiced extremely familiar concerns in the call which provoked this response; indeed, her concerns have been a basic part of the SS debate for two decades! But so what? After twenty years of this groaning debate, Steuerles answers were barely coherent, and his NPR host was still confused by the time he had finished expounding. Amazing, isnt it? Conan was still confused about Marilyns concerns after twenty years of public discussion! Simply put, American discourse has ceased to exist when this odd situation obtains.
And readers, what happens when major journalists and their expert guests cant get clear on the most basic questions? At that point, sophists enter the fray, eager to gain from the widespread confusion. Socrates warned of this long ago, and the process continues today. On January 17, it was Stephen Moore who preyed on Conan. Moore was eager to take advantage of his hosts lack of clarity.
Moore, the author of Bullish on Bush, was paired with anti-privatization author Dean Baker in the segment which followed Steuerles appearance. Conan turned to Moore to begin the new segment. And just like that, Moore began spinning:
CONAN (1/17/05): Steve Moore, let's start with you. Is the Social Security system in financial crisis?Moore started with familiar Bush Admin language about Social Security hitting an iceberg. Of course, his frightening number—$10 trillion— represents the size of the systems unfunded liabilities over the course of infinite time, a frame of reference only used when spin-doctors try to spread panic. But Conan provided no clarification. Instead, he lobbed a semi-softball to Moore, who more-or-less lied in his face:
MOORE: Oh, I don't think there's any question about that. The system is looking at somewhere in the neighborhood of $10 trillion—and that's trillion, with a T—in unfunded liabilities. And, of course, what that means is that the system has promised to pay $10 trillion more in benefits than the tax is going to collect. So I liken this to the Titanic that's headed to the iceberg, and we better be smart captains and steer this ship away from the iceberg or it's going to capsize.
CONAN (continuing directly): Now if it's simply a matter of looking at these numbers, and if people agree about these numbers, how can so many people look at the same numbers and arrive at such different conclusions?I dont know, Moore replied. Of course, that simply wasnt the case; in fact, Moore knows perfectly well why some people look at the numbers and arrive at such different conclusions. He knows that the projections of the SS accountants are based on highly pessimistic assumptions, and he knows the system can be made fully solvent for the next hundred years with fairly minor funding adjustments (links below). But Moore knew something about his host, too; he knew that Conan was still confused about elementary parts of the SS debate. Result? After Baker made some obvious points about the relative health of the system, Moore took advantage of the fact that his host is still confused after all these years:
MOORE: I don't know. I mean, I think if you look at every report that's been done for the last 15 years, whether it's—I mean, most importantly the Social Security accountants themselves say that the system is in very dire financial shape, so I do think it's irresponsible for people to say that there's nothing wrong with the system...
CONAN: Stephen Moore?So there was Moore, making hay on the point which still has Conan puzzled. Indeed, Moore did what any good sophist would do; he quickly offered the same slippery claims which Marilyn has heard for the past twenty years. There is no money in the fund! The money has already been spent! Indeed: There is no trust fund !! Citizens have heard these claims for years, leading to questions from callers like Marilyn. And to this day, our major journalists—the stewards of our discourse—are still confused by these well-known constructions.
MOORE: Well, there's two problems, I think, with that rosy analysis. One is—the big one is that there is no trust fund, and you were talking, Neal, earlier about this, but—that the money that has been borrowed from the fund is irretrievable; there's no getting it back. So Dean's numbers only add up if there were some way we could magically go into a bank vault and 500 to a trillion dollars that we've already borrowed from the fund were somehow available to us. But it's not; once it's spent it's gone forever.
Conan tried to riddle this out (text below). But how impoverished is our discourse? In truth, theres little reason to expect major hosts to know how to handle these slippery assertions. Indeed, where is Conan supposed to go if he wants clarity about Moores scary claims? Even Baker and Weisbrots indispensable Social Security: The Phony Crisis is a largely academic book; it makes little attempt to take apart the scary claims people like Marilyn hear in our endless spin-forums. The sophists are here, just as Socrates said; indeed, they crawl all over our discourse. But nowhere do our journalistic, academic or political elites deconstruct the familiar spin-points which come, in waves, from these people. Result? Twenty years into our Great Debate, Marilyn calls with her heartfelt concerns—and the experts and journalists on NPR are still confused and unable to help her.
WHAT MAKES MARILYN CALL: Theres nothing in the trust fund but worthless IOUs! And: The money has already been spent! Citizens hear these claims all the time—in yesterdays Washington Post, for example. Steven Rattner did the honors, in an op-ed piece:
RATTNER (1/30/05):We can debate endlessly what constitutes a "crisis" but not that Social Security faces a major financial challenge. According to actuarial estimates by the system's trustees, Social Security costs will begin to exceed revenue beginning in 2018—not so far off.Rattners last claim is scary but false; its absurd to say that $3.7 trillion must be put in the trust fund today. (According to the trustees gloomy projections, thats the size of the systems unfunded liabilities over the next 75 years.) But the rest of this passage is quite familiar. The SS trust fund is in reality, a myth. The trust fund has already been spent. Its just a pile of IOUs. Marilyn has heard these claims for years—but NPR hosts are still confused by them. Lets restate the fundamental fact: American discourse has ceased to exist when this situation obtains.
That would have been less daunting had we saved the very substantial Social Security surpluses of the past two decades. Instead, we mostly spent them, particularly in the past four years, leaving behind a much-touted Social Security trust fund that is, in reality, a myth.
All that resides in the trust fund is a $1.5 trillion pile of IOUs from the federal government, obligations likely to be honored by increasing the national debt. In addition, according to the trustees, we would have to deposit an additional $3.7 trillion into the trust fund today to ensure solvency until 2078. Is that a crisis or just a problem?
By the way: Rattner is not a conservative spinner. Hes a New York investment banker who formally advised the Kerry campaign; last summer, in the New York Times, he described the Bush budget policies as a disaster. In short, you dont have to be a conservative shill to be swallowed up by the potent spin that has driven this debate for two decades. When sophists gain the upper hand, confusion extends through all quarters.
TOMORROW: How to respond
SHOW HIM THE MONEY: To his credit, Conan tried to challenge Moore when he said the trust fund is already spent:
CONAN (1/17/05): Let me ask a question about something you said there, Stephen Moore, and we'll also go back to Dean Baker on the same point. Theres no money in the trust fund; the government has already borrowed it. There are bonds.Tomorrow well show you what the estimable Baker said—and well suggest what would have been more effective.
MOORE: It's already spent—you know, it's already spent.
CONAN: But there are bonds.
CONAN: There are physical bonds owned by—
MOORE: Right. That's right.
CONAN: —the Social Security Trust Fund, a trillion and a half dollars, something like that.
MOORE: That's right. Yes.
CONAN: OK. What you're saying is that—
MOORE: But the point is—
CONAN: —by political choice, Congress won't want to pay that money back.
MOORE: Well, what I'm saying is where is the government going to get the money to pay back the bonds? In other words, it's almost like if I borrowed—
CONAN: All right. That's exactly—
MOORE: —money from myself.
CONAN: All right. Dean [Baker], where's the money—where's the government going to get the money to pay back the bonds?
THOSE GLOOMY TRUSTEES: How gloomy are the projections of the SS trustees—the ones which Kerry and Kennedy cited? You dont have to be a wild-eyed liberal to know their assumptions are quite pessimistic. For example, heres George Will in the Washington Post, after saying that SS faces no crisis:
WILL (1/20/05): What constitutes a crisis is a matter of opinion, and everyone is entitled to his or her own. But not to his or her own facts. Here are some:But the figures Will cites in that last passage are (allowing for a slight apparent mistake) the figures of the SS trustees! In other words, even Will is willing to say that the SS projections are excessively gloomy. (He also says the trustees projection about 2018 is almost certainly wrong.) But Kerry and Kennedy? Good grief! They run onto network TV, eager to use unreliable figures which cut against their partys position. To their credit, Republican pols would eat live worms before theyd display such inept message-management. But thats the difference—Republicans pols actually seem to care about who wins these debates.
Social Security outlays may exceed revenue by 2018—that date almost certainly will recede further into the future, as it has before, as the economy outperforms expectations. After that, the government bonds that Social Security surpluses have bought (money used to fund the government) will be entirely redeemed, as the Social Security Administration calculates, by 2042. Or 2052, according to the Congressional Budget Office, using different assumptions about the rate of economic growth....
Some people warning of a distant Social Security crisis postulate 75 years of 1.8 percent annual growth. But if America has 75 such sluggish years, Social Security's insolvency will hardly be the nation's largest problem.