Dean Baker on Social Security and Obama
Via Truthout Dean Baker points to continuing insistent of President Obama to keep Social Security ‘on the table’. Dean Baker has a take on some numbers surrounding the politics and stories politicans offer:
While most of the DC insiders probably don’t understand the chained CPI, everyone else should recognize that this technical fix amounts to a serious cut in benefits. It reduces benefits compared to the current schedule by 0.3 percent annually. This adds up through time. After someone has been getting benefits for 10 years, the cut in annual benefits is 3 percent. After 20 years, people would be seeing a benefit that is 6 percent lower, and after 30 years their benefit would be reduced by 9 percent. (AARP has a nice calculator which shows how much retirees can expect to lose from the chained CPI.)
We can debate whether the chained CPI benefit cut should be viewed as “large,” but there is no debate that chained CPI cut is a bigger hit to the typical retiree than the ending of the Bush tax cuts were to the typical high-end earner. Social Security provides more than half of the income for almost 70 percent of retirees. This means that the 3 percent cut in Social Security benefits amounts to a reduction in their income of more than 1.5 percent.
By contrast, if a wealthy couple has an income of $500,000 a year, as a result of President Obama’s tax hikes, they would be paying an addition three percentage points in taxes, or $3,000, on the income above $400,000. That comes to just 0.6 percent of their income.
If the proponents of using the chained CPI to cut Social Security want to claim that this cut is not a big deal, then they must also believe that the tax increases on the wealthy were not a big deal. That’s what the arithmetic says, and there is no way around it.
(h/t Nancy Ortiz)
The more important, or maybe I should say the initial question, is why is any adjustment to Social Security benefits being entered into and discussed as a parameter in the debt/deficit debate, by Pres. Obama or any of his antagonists. The inclusion of Social Security requires accepting the extralegal concept of a unified budget. Extralegal, repeat the term three times and ask why is it within the general Federal budget discussion. Yes, the SS Trust Fund is a creditor to the Federal budget through its basic asset, the Special Treasury notes. However, the law is clear and unambiguous. Social Security is “off budget” meaning that it has a revenue stream of its own, the FICA deductions and a pool of assets (wealth) from saved excess FICA deductions over the years and interest earned and taxes on SS benefits.
No part of the benefits stream is paid out of the general Federal budget. And if you’re out there and want to scream, “Well who pays that interest and redeems those notes when necessary? The answer is the same Federal government that borrowed money from JP Morgan Chase, Goldman Sachs, China and any other entity that purchased T-Notes for a safe money haven.
No matter who the “expert” maybe, Andrew Biggs, Charles Blahous or any of the Peterson think tank employees, they always begin their deception with something like, “Well yes, Social Security funds are legally distinct from the Federal budget. There is no legal status to the “unified Budget” but….” That’s one big but that is generally followed by all manner of metrics having to do with future predictions of Social Security financial stability mixed in with the Federal budget. Extralegal, get it.
If Social Security is going to need an adjustment of any sort it is required by law to be kept separate from the general Federal budgeting process. And if the real financial need is twenty years in the future less dramatic steps than cutting benefits can resolve that problem as many here have read in the past. For example the NW Plan, as described by both Webb and Coberly, would be sufficient. Don’t let the obfuscaters confuse the budgetary debates.
Nancy says that the tax on high incomes is no big deal for the economy. We shall see about that, those higher taxes are only two months old, a bit early to call them no problem.
However, after 60 days of higher SS payroll taxes it’s clear that this does make a difference. Virtually every retailer (led by Walmart) has said they are feeling the consequences of the 2% tax hike.
In the face of this, AB continues to push for higher taxes as a way out of the SS box. Sorry, that is not going to happen.
Don’t worry about Peterson and Biggs (or me). We have been ranting for years to no avail. But now that Walmart is in the fight, the outcome is no longer in doubt. There will be no new taxes for SS.
Well for the record I have lots of obfuscations handy. Cause nothing is simple and “unified budget” rules not least. But they make Dale mad because they just confuse stuff that truth be told doesn’t need to be confused.
Discussions of Social Security have zero place in the context of any budget/deficit crisis/deal/bargain scored over ten years. Which is all of them. And when pressed ‘reformers’ concede as much. They just argue that it should be included as some token of ‘seriousness’ or more laughably ‘because it is the easiest piece to fix”.
Yeah because it is amazingly easy to “fix” something that is not broken and at worst needs to equivalent of having its oil changed and it’s spark plugs regapped.
(Oops did I just reveal my age?)
Krasting even granting the Walmart argument (which is mostly an argument about the stupidity of the payroll tax holiday to start with) you are arguing that the impact of 2.0% immediately in the middle of a recession equals the impact of a projected impact of 0.1% a year starting in 2018.
That is you have simultaneously discounted 20:1, immediate vs time shifted, and during recession and during expected recovery all to zero.
Plus your argument has now shifted entirely from an economic one based on your own set of data points to an entirely political one based on your gut feelings about the possibilities for political compromise. Which makes me think you have just conceded the former argument.
So thank your for playing the Game. And don’t forget to play our Home Version
The main problem is that too many believe we actually have a budget problem unified or not. The simple fact is we do not have an inflation problem, thus we do not have a budget problem. The problem is that the budget is too small based on aggregate demand and unemployment.
Social Security is NOT broken. Not even close.
The entire problem with the CPI for SS argument is not once has Obama et al asked if maybe the people would be willing to pay more to fix what they say needs fixing. They have not offered up that option. They just seem to assume that people would not.
Idiots!
Thank you, Bruce Webb
and others.
You have said what needs to be said.
The problem that remains is to get the people… Congress… to listen.
For what it’s worth, the comparison between the “three tenths of one percent” CUT in benefits each year vs the six tenths of one percent increase in taxes (on the rich) is inapt, misleading, and bad math.
If the three tenths cut in benefit were applied to all SS benefits (it is not applied to the initial benefit, which is still “wage adjusted” and so includes an implicit inflation adjuster that is not a political fiction) that would imply a 3 tenths of one percent reduction in the total cost of SS. But the total cost of SS is paid for by a 12 percent tax on the incomes of the workers who will eventually be the people getting those benefits.
If the benefit cut reduces the “costs” of SS, it will reduce those costs by 3 tenths of one percent of the 12 percent of income the workers pay. This is about four one hundredths of one percent.. or about thirty cents per week.
So what the chained CPI means is that we and Our Leaders have decided that in order to save ourselves 30 cents per week while working, we are going to cut our retirement by an average of about 6%… and rising to about 10% when we are very old….
Then the thing that needs to be remembered is that that 6% cut is from an income that is already set to be the least amount a person could hope to live on.
So there you are, Folks, big, Big, BIG Savings of 30 cents per week, so that when you are old you will have to eat cat food.
Please note, if you missed it, or were misled, NONE of that Bush tax cut ending… that 3000 dollars in extra taxes on the rich… goes to pay a single dime for Social Security. NONE.
I have been trying to think of a way to reply to Krasting without using the word idiot… not to save his feelings, but because I know that such invective damages MY credibility.
Krasting makes two serious errors which, unfortunately, are the same errors being made by Our Leaders.
The first is the assumption that money spent at Walmart is somehow “better spent” than money spent for groceries when you are old.
He fails to recognize that the payroll tax holiday was paid for by government borrowing. So, while imagining he is arguing on behalf of “the economy,” he is really arguing FOR more government borrowing. Unless, of course, he proposes that we no longer allow people to save for their own retirement because Walmart needs the money. This is a peculiar twist on the old argument by people in his political class that you can’t raise the wages of workers because they will just spend the money on drink.
Krasting seems to think the end of the tax holiday is a tax HIKE.. worse, he seems to think it is a tax hike on the rich. The rich do not pay for Social Security. And the tax “hike” is neither a tax nor a hike. SS is money the workers save, protected by a government program, but not paid for by it, for their own retirement. Restoring the payroll “tax” does not raise taxes.. it returns Social Security to what it was… paying for itself.
What Krasting and Wall Mart are seeing is the effect of the ending of a 2% emergency supplement to payrolls in response to the recession caused by unregulated banking. Without that 2% “stimulus” … paid for by government borrowing…Wal Mart may well see it’s business suffer… though we are not told by how much. But it is stupid to blame it on a “tax hike,” much more stupid to claim it as evidence that “raising SS taxes hurts the economy.”
Now, I am sure Krasting cannot understand this. And neither can 99% of Congressmen, or the President, but you can be pretty sure that Pete Peterson and Andy Biggs understand it full well. Which is why they paid Obama’s advisors, and the Republican “leaders,” and some poor idiot “progressive” columnists to insist upon the “tax holiday.” It gives them another lie in their box of Big Lies.
Unless I am mistaken, a switch to chained CPI does not fix the SS shortfall. Something ore would still need to be done.
Jerry Critter
Yes. The chained CPI “fixes” about a third of the projected shortfall. That is it does about what an increase in the “cap” to about 150,000 dollars per year would “fix.” Or, what an increase in the payroll tax of about 30 cents per week per year would fix.
What is wrong with these comparisons is that the chained CPI takes the money from the retirees, who will go from dirt poor to desperately poor. Or it takes the money from “the rich” in a big enough chunk (12% of the extra 50k to be taxed, or about 6000 dollars in extra taxes per year… and these would be real taxes… they won’t get the money back) for them to notice and hate and destroy SS to avoid. Or it could take the money from the workers who will get the benefits at a rate none of them would notice, much less feel.
The cut in benefits would make SS meaningless as insurance against poverty in old age…. having a dollar less than it takes to live on means that you don’t have enough to live on.
The raise in taxes on the rich would make the rich work that much harder to kill SS… and impossible for workers to claim “we paid for it ourselves.”
But paying for it ourselves would… if we had honest politicians… enable us to pay for our own “security” with money we don’t need and won’t miss.
Or, of course, we could do like Krasting, and say oh we can’t live on eighty cents per week (the full cost of the projected shortfall) less than we have today… or less than we will have after the eight dollar per week raise that we expect to get each year at the same time.. and just count on winning the lottery, or retiring when the “market is up.”
Jack
the real problem with the “unified budget” is not that it is illegal with respect to SS, but the fact that even if you want to account for “all federal spending” that way, Social Security STILL does NOT contribute to the deficit.
Social Security brings in more money than it spends.
The only way they can “count” SS as part of the deficit is if they ignore the fact that they are giving BACK to SS the money they borrowed FROM it (plus interest.)
However you “do the books”, that remains the simple fact.
Even if paying interest on the money you borrowed “increases your deficit,” it is NOT the people you borrowed the money from that increases your deficit… but you, the guy who borrowed the money, who increased your deficit. “You” in this case means the Congress and the “general budget.” The on budget budget.
And this is true even if you prefer the “unified budget” method of accounting.
it just shows you what an elit’ist crony capitalist ,bankster,1%er republican in black face obama is.
So the executives at Walmart are sure that the restoration of the 2% FICA deduction is the sales killer. And Krasting is eager to broadcast the news. The Oracles of Delphi have spoken. It is the 2% increase in retirement savings that is slowing retail sales. What about the poor holiday season in the midst of stagnant wages thanks partly to employers like Walmart? What about the IRS processing tax refunds more slowly thanks to the geniuses who thought that cutting back on the Federal work force during a recession was a bright idea? But it is the newly implemented restoration of the 2% FICA deduction, Less than two months into the year that would be a total loss, for a $106,000 annual gross worker, of a bit less than $300. Krasting and William Simon, CEO of Walmart are blowing smoke. They, nor anyone else could have any reasonable measure of effect at this time for that 2% restoration. And again, as Coberly ppoints out, that’s money put to retirement.
How can we assess the value of what Wm. Simon, CEO of Walmart, has to say? From the NY Times article reporting Walmart’s assessment of the effect,
” Mr. Simon and Mr. Holley said the refund delay was the major factor affecting customers’ spending right now, though the payroll tax increase was also having an impact.”
“We hear our customers talking about that a lot right now and making adjustments in what they do and what they buy,” Mr. Simon said. “We hear them talking about it more than we’re able to detect it in the sales patterns just yet.”
So Wm Simon is on the floor at his Walmart stores listening to the comments of Walmart customers. Simon has his ear to the crowd. He’s unable to detect an effect in the sales patterns yet which might be a more data oriented assessment, but he’s sure its the 2% restoration of retirement deductions that’s hurting Walmart. Of course he didn’t go into too much detailed analysis of still strong profits or the continuation of sub-standard wages of Walmart employees which may also be significant factors in the assessment of the effect of the restoration of the 2% deductions for the retirement. Does Walmart provide a retirement plan that any average Walmart employee could survive on once they’ve been worn out and tossed off?
And just in case there is any question of doubt regarding the affiliation between the Social Security program and the Federal budget check this from a brief history of the issue which appears on the SSA web site.
The actual form of the 1983 change was somewhat complex. (the change of 1983 refers to the Social Security Amendments of 1983, signed into law by President Reagan on April 20, 1983). It provided:
“1) That the Social Security and Medicare trust funds (and the income and outgo to these funds) be treated as separate budget functions, starting with the 1985 fiscal year and ending with fiscal year 1992.
2) For the initial budget year after enactment (FY 1984) the Congress would be bound to use the new procedures but the executive branch would not (because the FY 1984 President’s budget had already been submitted to Congress under the old rules).
3) Starting with fiscal year 1993, Social Security and the Medicare Part A trust funds were not only off-budget, but were exempted from any general budget reductions that might otherwise apply to the entire federal budget (such as an across-the-board cut). The Part B Medicare trust fund, while also to be shown as a separate budget function, was not protected from general budget limitations.
Thus, in this rather complicated fashion, the Social Security program was again off-budget by FY 1985. Perhaps the more important date here, however, was the 1993 date because that date exempted the Social Security program from the potential of generalized budget-cuts.”
And that excemption was accelerated, –“pushed forward from 1993 to 1986 the date by which the Social Security program would be made immune from generalized budget reductions 1986 by the Balanced Budget and Emergency Deficit Control Act of 1985.”
coberly,
What people like Krasting want us to do is take many times 80 cents per week per year and invest in the private markets in hopes that we can get slightly more money than we will get with SS, and provide fund managers with billions of dollars of minimally taxed income.
Yes Jack but since then Medicare Part A,despite being funded by a dedicated SECA tax and having revenues segregated into its own HI Trust Fund has now been returned to “on budget” status leaving only SS and Post Office operations “off budget”.
That is whether a program is “off” or “on” budget has little to do with how it is funded and whether or not those funds are legally segregated. Because HI has dedicated funding and is so segregated but is still “on budget”.
There is a logic to it but it has zip to do with common sense ideas of “we are paying for it”. Because all those would apply equally to HI, OAS, and DI. Nor ifs there any overriding logic about what should be worker insured and not, because if there were DI should be treated like HI and not OAS.
Obfuscations? I got a whole pocket of them. Because to make total sense of your otherwise excellent history lesson you would need to explain why HI was switched BACK to “on budget” status leaving OAS and DI behind. And as it turns out I don’t know the answer, this is not a trick question. Hard but not inherently tricky.
The 2% payroll tax “increase” restores FICA to its normal rate, 6.25% of gross wages. To quote our friendly MSM, nothng to see here, folks. Yet, Walmart complains of lower sales. Well, CEOs of America, just imagine what will happen when each and every year the COLA retirees and others receivng federal benefits get a nice pay cut. Those federal benefits are part of GDP, you know. And, when we cut SS et al.there is less money circulating around in the economy. And, of course, the effect is contractionary. And, still, SS just has to be “reformed”, cut and its share of the economy has to be kept to 6% or YMMV. You will note that the advocates of the chained CPI do not say it is a better measurement of the cost of living of older people or others receiving SS/other benefits.
And Michel control yourself.
It’s okay to castigate Obama as being Republican-lite, I don’t agree but I see where many would. But you are not going to recover from your official “troll alert, ban on sight” current status but tossing in references to “blackface”.
Want to reentering the discussion? Stop being a hater. Which is different from ‘severe critic’. Did you think we just wouldn’t notice you slithering back on the scene?
Yes
but keep your eye on the shell with the pea under it.
As we have seen with the payroll tax holiday, Congress can change the rules… and the accounting… any time it wants.
It STILL is not true that Social Security contributes to the budget deficit. And it will NEVER be true as long as the workers pay for it themselves.
And this is true whether you use unified budget accounting, or play by the rules and use accounting that keeps the SS Trust Fund separate from “the budget.”
I would guess… i have no idea how those folks think, if they do… that HI got “on budget” (if it has. I hadn’t seen the report.) because some very well meaning folks decided to help the poor workers by “funding” Medicare in part from the general budget. This does keep the Medicare dedicated tax down somewhat, but the workers end up paying for Medicare anyway through the income tax, and the effect of the income tax on the prices they pay and the wages they get.
All making “the rich pay” for Medicare has gotten them is the politics that leads to “cuts” to “save the program”… while leaving the elderly standing in the street wondering how they are going to pay for their medical care now that Medicare doesn’t.
More–
There is a CPI that is probably more accurate as an estimate of the effect of inflation on senior/others but it is not considered to be a desirable feature of any “reformed entitlements.” So, the CPI has nothing to do with “tweaking” SS or “making SS sustainable.” Austerity measures like the CCPI are supposed to boost the economy and create jobs. Just not now, here where you and your family live. But trust us, things will be better in time.
Right. Maybe not. NancyO
http://www.scholarsstrategynetwork.org/sites/default/files/ssn_basic_facts_white_on_deficit_brinksmanship.pdf
Here is an excellent piece by Joe White on the deficit hawks and how they influence and direct MSM comment on the national debt. NancyO
Bruce
Your right in describing how the manipulators want things to be, but that still isn’t how they are as prescribed by legislation. Social Security draws no funding from the general Federal budget beyond the interest paid on its Treasury notes and the taxes paid on SS income. And the latter is, like FICA deductions, dedicated to Social Security benefits. The purpose of these discussions is to make an effort to educate as many people as possible to the misuse of words and the misrepresentations of facts by Biggs, Krasting et al. I am doubly disappointed that we don’t get such clarification from those who have a louder public voice.
Jack the same is true of Medicare Part A. It draws no support that I know of from the GF but is still “on budget”.
By your logic it shouldn’t be and per your excellent history lesson it briefly WASN’T .
And per Dale’s reservation: I HAVE seen the ‘Report’ aka the Analytical Perspectives on the Budget of OMB and the footnotes of any CBO Economic Outlook.
Medicare A, B, C, and D despite quite different financing mechanisms, and in the case of A identical to that of Social Security, are all “on budget” while only Social Security and the Post Office are “off budget”.
Which is why I suggest that the apparent logic of “off” and “on” budget is illusory, the categories just don’t break where they should.
Not a big deal in the scheme of things, it doesn’t effect the underlying argument from economic equity or even the argument for worker insurance, but as we all know:
“you can’t spell analysis without ‘anal’ “. And someone has to do the dirty work.
well, the word is also applied to obsessive behavior.
It does not matter whether SS is “on budget” or “off budget.” The words have become a substitute for “contributes to the deficit” or “does not contribute to the deficit.”
Social Security does not contribute to the deficit. All of the money paid TO Social Security comes from the payroll tax. No borrowed money is used to pay for Social Security.
Not even “fungible” money.
The payroll tax holiday does not constitute an exception. Social Security did not contribute to the deficit.. the payroll tax holiday did. This is not playing with words.
The tax holiday was paid for with borrowed money.. exactly to create this confusion. The borrowed money could have been given directly to the workers without involving Social Security or the payroll tax at all. Instead the gimmick of the “tax holiday” was employed in order for the Big Liars to be able to argue… as they do now.. .that, “no, see, SS really does contribute to the deficit.”
But what the payroll tax holiday really showed was that you could kill one sixth of Social Security at least temporarily by not letting the workers pay for their own retirement.
Instead, “the government” borrowed money to replace the money the workers would have paid.
I don’t know how to make this clearer.
Meanwhile, on budget, off budget, debt or deficit, unified budget view or Trust Fund view, Social Security is the workers paying for their own
retirement. It does not contribute to the deficit.
This could change. The Congress can change it. That is what this is all about. Because the people who hate Social Security want Congress to change it. And that will destroy SS… how long do you think Congress would continue to borrow money to pay for your retirement after you are no longer paying the payroll tax?
The best… only weapon… the Big LIars have is to confuse you with fast talk, misleading terminology, backward reasoning, and numbers racked out of all honest proportion to reality.
Please don’t contribute to the confusion.
Dale
I would certainly agree with all of what you say. So what does that tell us about Obama? Is he complacent or complicit?
Jack
my opinion only. he has no idea what he is doing. he takes the word of his advisors… one of whom, Orszag, wrote a book about fixing Social Security, which begins by seriously missing the whole point of SS. Orszag seems to think it is some kind of investment club.
on the other hand, Obama takes political money from Peterson and others who are committed to the destruction of SS.
So whether he is one of the conspirators or just a fool who thinks he is going to go down in history as having “solved” the Social Security “problem” with a masterful grand bargain of bipartisan compromise… i don’t know.
Obama thinks it’s time to put an end to Social Security, Medicare and the Great Society programs lumped together in the term “entitlements.” I haven’t seen anything about what, if anything, he proposes to take their place. The “vulnerable” people he talks about are ordinary people who work for a living but don’t earn enough to accumulate significant savings and other assets. Welfare is good enough for these people.
Obama thinks that getting rid of the New Deal programs we now have is a good thing for the economy. Others like Alice Rivlin and Peter Orzag share this view. Billionaires like Pete Peterson and the Koch brothers agree. That’s all there is to it. What the rest of us think really doesn’t matter. NancyO
Dale if it doesn’t matter whether Social Security is “on budget” or “off budget” then maybe people shouldn’t keep brining it up as an effing talking point.
I wasn’t the person who put the gun to Jacks head or Nancy Altman’s head either and forced them to make the legalisism argument.
You can either make hyper critical arguments about the state of the law which EXPLICITLY depend on the precise meaning of terms or you can go loosy goosy “what really matters” and play Humpty Dumpty is reference to words “it is who is to be Master, that is all”.
Which is exactly what you are doing in just claiming “Social Security doesn’t contribute to the deficit” based on purely equity arguments that have fuck all to do with the way the government scores deficits
Don’t like technical terms of art that have precise meanings in the context of legislation and budget scoring? Stop using them for your own purposes and complaining about folk who point out inconvenient realities. Because when real legislation comes down the line with real actual budget scores attached you are going to look a little foolish insisting that your numbers are precise but your language is sloppy–because after all what do meanings matter?
BTW no one has even attempted to answer my question about Medicare Part A.
Bruce
“no one puts a gun to” my head…
but the way language is USED counts. somehow on budget has come to mean “adds to the deficit.” Social Security does not add to the deficit… whatever the “precise meaning of terms” is.
I don’t think we could have this conversation even among experts… people get too excited.
They insist they HAVE to be “right” even if that means insist on “technical” definitions that either no one shares, or that have nothing to do with the argument in context.
I thought I “attempted” to answer your question about Part A… that is I made a guess. I did do enough looking in the “technical” literature to at least find out you were right about it no longer being “off budget.”
But I have tried to make the case about Social Security (OASDI) that
whether it is off budget or on budget doesn’t matter:
you CAN trace… even though a CBO “expert” claims that you can’t follow the actual serial numbers on the dollar bills… you CAN trace where the money for SS comes from, and it does not come from borrowing.
Set aside the confusing language… and that’s all it is, based on a misunderstanding of what a “budget” is… and it is quite clear that Social Security does not add to the debt.
Bruce
I would suggest that “arguments that have fuck all to do..” is not the sort of precise technical language that inspires confidence.
I am fairly sure I have made the case that Social Security does not contribute to the deficit. If “our side” can’t make that case amongst the serious people, it is because they are not trying.
It may not be me who is being sloppy with language.
well, in case anyone else shows up, if you want “precise technical language”…
go to the Trustees Report… there is a reason why they are called Trustees, and why there is a Trust Fund
you will find that ALL OASDI (commonly called Social Security) comes from the payroll tax. That is “the workers pay for it themselves. There is NO borrowing. SS does not contribute to the deficit.
Then, if you can find a fairly clear statement of the “unified budget” you will see that there is “on budget” which is an account of money that comes into the general fund and money that is paid out of the general fund, and the “deficit” that arises from the fact that the money out is more than the money in. Then next to that you will see the “off budget” budget, which is mostly Social Security. There you will see that the money coming IN is more than the money going OUT, which leaves the off budget budget in surplus.
Then to get the unified budget, you will see that the surplus from the off budget budget is applies to the on budget budget to REDUCE the on budget deficit. Note in particular that SS is not “adding” to the deficit… it is, for unified budget purposes, reducing it.
Honest accounting would require some accounting for the fact that the “on budget budget” has aquired a debt… it must pay back the money it borrowed FROM Social Security. This fact is not usually reported in the discussion i have seen of “the unified budget.” this is dishonest. however there may be a perfectly good reason why the on budget budget accounts the money it borrows from Social Security as “revenue.” I don’t know what the reason is… but remember this is accounting… this is an entity keeping books in a way that helps them keep track of what they want to keep track of.
In other presentations you will see “total federal debt” which includes the money owed TO Social Security as well as to the general public. Again, the keepers of the books have a reason that i do not know for keeping the money owed to SS separate from money owed “to the public.”
But so far, at least, the law and the facts are that the money owed to SS is repaid like any other debt.
The problem begins when people whose motives are not clear, want to “count” that repayment as “SS adding to the deficit.” That is, the money paid BACK to SS (with interest) is counted as an “expense.”
This makes perfect sense. If I have been keeping my own budget which includes money i borrow from the mob and money i borrow from my grandmother, i may want to count that as income so i know how much i have to spend each month. i may want to make sure i keep track of how much i owe the mob more than i need to keep track of how much i owe granny. so i would include the loan from granny as revenue, and then subtract my expenses, and the remainder is how much i need to borrow from the mob.
it’s a bad habit to get into. because when granny comes and says, “dear, my expenses are growing and i need you to start paying back the money you have been borrowing from me.” it is really easy if you have no character at all to run around screaming about how unfair it is of granny to “increase your deficit” by asking you to pay back the loan she gave you. i mean, the idea!
“I wasn’t the person who put the gun to Jacks head or Nancy Altman’s head either and forced them to make the legalisism (legalese?) argument.”
This is a truly troubling statement, especially so when it comes in a broader argument that uses the term “technical” to define the other side of the argument.
I haven’t yet seen a definition of technical as it is being used. I would think that technical is defined by what is written in the law, in the same manner as using the term in a scientific or engineering discussion. Technical terms are those which are precisely defined so that all who use the technical terms are doing so in the same manner.
I think that the problem we are having with this discussion is that the real antagonists, those trying their best to screw up the Social Security program (including Obama), are using any terms they care to in any manner they choose so long as it supports their argument. That side of the argument is relatively simple. “Social Security costs the economy too much and is in some undescribed way holding back economic growth.” Recognizing that Social Security benefits are funded by that independent funding stream, FICA deductions current and past, interferes with that intention. Therefore all the obfuscation. They just don’t want to pay additional income taxes so the next best thing is to blame SS, Medicare, the building of bridges, etc. So to cast blame on Social Security benefits as a drain on the economy they have to make up shit. It really is that simple.
Go back and read your history of the French Revolution. Not that different. Just far more severe. Same shit, new day. Elites want more and they can enlist their sycophants to argue that the people must sacrifice in order to save the crown, oops I mean the economy or the state, which ever you prefer.
Jack,
I think Bruce is using “technical” incorrectly. He seems to mean that there are specific terms that the people who write the Federal budget use…
so far so good…
but then he insists we use the same terms with the same meaning when we are talking about Social Security.. where they become meaningless, misleading, and “contrary to logic.”
He actually seems to relish that “contrary to logic” bit.
But, as you have noted, I can’t even get him to produce the “technical” meanings in their own context. I do the best i can to be reasonable, and get shouted at for “loosey goosey” meaning I try to use language in the way ordinary people understand it.
This does not mean that Bruce, or the budgeteers are “wrong” in their usage. Only, to take an example Bruce used against me and turn it around: Bruce told me I could not use “volume” to mean “something bound in leather with pages with words on them” in a chemistry laboratory.
True enough, perhaps, but then neither should he insist that I catalogue my library books by cubic centimeters.
I would like to find a way to agree with Bruce… he is after all one of the stars of the defense of SS in blogland. But he has turned away all my efforts with contempt, and frankly offered nothing back that i can make any sense out of.