Doing this may have toned down that big, bad $10.4 trillion number by setting it against a big, good $295.5 trillion number. But this is misleading, too, in its own way. If payrolls are $295.5 trillion and the deficit is $10.4 trillion, that means Social Security’s anticipated payments to the infinite-horizon must, by definition, be $305.9 trillion — which is a really big, bad number.
As others have noted, this $295.5 trillion represents the payroll tax BASE. I guess Mr. Luskin either thinks the tax rate is 100% or is proposing a massive increase from the current rate of only 12.4%. I thought he said he was against tax increases?
Of course, Luskin might object that he knows this figure represents the tax base and not tax receipts, but since his oped was complaining about others allegedly misleading the public, why is he trying to mislead his readers?
Update: Luskin also writes:
If you want context — so that the public is sure not to be misled — then how about this? That $10.4 trillion number represents the value of economic assets today that would have to be contributed to the Social Security system to assure its perpetual sustainability based on the best estimates we can make at this time. To set things right, then, we would have to contribute today virtually the entire market value of the S&P 500. We would have to throw down the gaping maw of Social Security almost every share of every major company in America today in order to satisfy the hungry beast.
Table B.102 of the Federal Reserve’s Flow of Funds reports the assets and the liabilities of Nonfarm Nonfinancial Corporate Business to be $20.9 trillion and $10.2 trillion respectively. Table B.100 reports the balance sheet for households showing the combined value of corporate equities and mutual fund shares held by households is around $10 trillion. But as we play this comparison, let’s note that household net worth $46.7 trillion which is about what the present value of the General Fund deficits stack up to be. But is Luskin crying out that Bush’s fiscal policy is taking the General Fund towards bankrupty? Is he writing that there is some “imminent crisis” here?