by Dale Coberly



LIE on TIME magazine website




Maya MacGuineas is president of the Committee for a Responsible Federal Budget (CRFB) which reliably confuses the Federal Budget with the Social Security program.   CRFB claims to want to cut government spending to balance the Budget,  but it spends most of its time arguing for the need to cut Social Security.

Social Security is not funded by the federal budget.  It is paid for entirely by the people who will get the benefits.

In MacGuineas op-ed on TIME magazine’s website


she says a number of things reasonable people could agree with.  This is not surprising,  a  technique of expert liars is often to draw you in with reasonable, and true, statements and then lead you to false, and dangerous conclusions.  MacGuineas does lead you to false conclusions without necessarily “lying,”  and I will get to those.  But I’d like to begin with a statement which she made that is not true which I find particularly egregious.

“My goal would be to both ensure that those who depend on the program are protected, while also balancing the growing cost of Social Security with other pressing priorities — from programs for children, the vulnerable, public investments, and shoring up our education and worker retraining systems”.

While it may be doubted that MacGuineas is sincere in her concern for “programs for children, the vulnerable, public investments, and shoring up our education and worker retraining systems,”  Social Security has nothing to do with funding for any of these programs.  Social Security is paid for entirely by the workers who will get the benefits.  It subtracts not one dime from the federal budget. Except, of course, when the Congress is obligated to REPAY the money it BORROWED FROM Social Security.

MacGuineas could no doubt find funds for her favorite programs by taking a gun and demanding your wallet.  This would be exactly the same as cutting Social Security to find the money to pay for someone else’s favorite program. Taking money from SS and using it to pay for other programs would not cut your “taxes” one dime.  Neither would it cut “the budget.” All it would do would to leave you “busted, dead broke”  when time came for you to retire.   This is a shell game”  “Lookee!  We’re going to cut SS in order to spend on other programs.  This will save you money, see!” The reason the SS tax was created as dedicated funding with a separate trust fund,  was to make sure the money collected for Social Security was not confused…is not fungible…with other government money.

Maya MacGuineas knows this.  So why is she pretending that somehow Social Security… your money you put away for your retirement…takes away from “the children.”  One might also ask when has there been any evidence that the Congress would actually pay for “the children” if only those greedy grannies would simply die when they can no longer work and save us all the trouble and expense of feeding them?

While contemplating that, let us turn to some of the other ways MacGuineas op-ed might have been designed to fool you…  taken as they come up in the op ed, not necessarily in order of importance:

“the program’s combined trust funds will be exhausted when today’s 50-year-olds reach the normal retirement age and today’s youngest retirees turn 79. Social Security is a $12.5 trillion problem hiding in plain sight, and while fixing it is still a manageable task, failing to do so in time could be a major cloud hanging over the president’s legacy.”

Yes, fixing it is still a manageable task.  I know that CRFB knows that SS could be “fixed” by raising the payroll tax one dollar per week per year per worker.  But CRFB has another plan…

“A reasonable plan could include a mix of policies, perhaps including raising the retirement age and indexing it to life expectancy, raising the current $127,200 cap on earnings subject to the payroll tax, and reducing the growth of benefits for higher earners…”

Sounds reasonable all right.  But what is reasonable about raising the retirement age for people who have paid for their own retirement and may be too old to work even if they are going to live a few years longer, or may not be able to find a job (because corporations lay off people at abpit sixty, when they get “too old” to be productive. ).  Raising the cap on earnings or “reducing the growth of benefits for higher earners”  sounds reasonable to certain left leaning political activists,  but it only sounds reasonable to them.  The “higher earners,”  starting at about 50k, need their SS because they have no reasonable way to protect their savings outside of SS (with luck and prudent management, they might do well enough, but they can’t be sure of that),  and raising the cap or cutting benefits for “the rich” is just a way to motivate “the rich” to do whatever they can to cut Social Security entirely.

“the program is already paying out more in benefits each year than it collects in the payroll taxes that fund it — and it has been for seven years now.”

Sounds scary doesn’t it?  Even sounds like “looming bankruptcy.”  But the present Trust Fund was designed to help pay for the Boomer retirement and that means that when the boomers retire (as they started to do about seven years ago), paying out of the Trust Fund, to avoid raising the payroll tax on the following, smaller, generation, will result in SS paying out more in benefits each year than it collects from payroll taxes that year.  This is ordinary business finance.  but for some reason people can’t understand it when Social Security does it.  The “trouble” comes after that.  Because we have been living longer, and getting paid less,  and not adjusting the payroll tax (a tiny amount) to account for that.

“The difference is made-up from interest payments that are owed to the trust funds, but that amounts to one part of the government paying another, so it is already adding pressure onto the rest of the budget…”

Yes, for some reason when Congress borrowed the money FROM Social Security…to ease pressure on the federal budget at that time… it never considered a day would come that they would have to PAY BACK the money they borrowed.  Now, paying back the money you borowed is called “adding pressure onto the rest of the budget.”  Well we can blame Social Security for that. Those grannies should never have lent us the money, increasing our debt; it’s all their fault. {I am being sarcastic.  There are people with PhD’s who think they are making sense when they say things like that.

“Those interest payments amount to roughly $700 per household per year.”

There you have it.  Those greedy grannies taking food out of your children’s mouths.  The actual per taxpayer cost of SS interest last year was about 400 dollars.  This wasn’t scary enough for MacGuineas so she used “per household” which we may assume means two incomes… maybe a hundred thousand a year combined. So that interest on the debt TO Social Security amounts to about four tenths of one percent of “household income.”  Moreover the money paid  BACK to Social Security is not paid for, in general, by “households.”  It is paid from general taxes which include corporations and the very rich,  so you probably should guess that the per household actual cost is about half of MacGuineas.

“The difference is made-up from interest payments that are owed to the trust funds, but that amounts to one part of the government paying another,”

Ah yes, the old Uncle Sam taking money out of one pocket to pay the other pocket vaudeville routine.  This lie has been around so long it’s practically a religious belief.  Unfortunately it is a lie intended to fool simple people.  The United States takes in money from many people, and pays out money to many people.  This is not taking money out of one of Uncle Sam’s pockets to put in another pocket.  This is using money to pay the people who provide goods and services arguably needed by the people who pay the taxes.  In the case of Social Security the money was originally collected on the promise that it would be used to pay for the payer’s retirement (or disability etc).  Because more was collected than needed at that time, the excess was lent to “the government” which used it for projects arguably for the benefit to the country as a whole.  Now that the money is needed for the retirement of the people who paid the money in for their retirement, it needs to be paid back by “the country” as a whole… through general taxes which are not in general paid for by the same people who paid the Social Security “tax.”  It’s not pockets, it’s people.

“The built up reserves of the trust funds are projected to run out by 2034, at which time payments to recipients will be limited to whatever is collected in taxes. That amounts to a 23% cut for every recipient no matter age or need.”

Or the tax could be raised a dollar per week per year before then, and there would be no need to cut benefits at all, forever.

“While we all may differ on specific priorities and policies, we should be able to agree that failing to make changes is irresponsible and adds to the costs. For example, closing Social Security’s shortfall today would require either immediately increasing payroll taxes on all workers by 22%…”

But this is 22% of a 6.2% tax. This means that a tax raise of about 1.4% would be needed.   But 22% sounds so much scarier.  1.4% of a thousand dollar per week paycheck would be about 14 dollars.  You would not notice it.  And you would get the money back about threefold when you will need it most.  In fact, it makes more sense to look at it as about six fold given that “there are [only] two workers for every retiree.”  So, take six times 14 dollars:  That adds up to an extra 3 or 4 hundred dollars per week on your retirement check.  Note, inflation is included in the “three fold” return,  but if you were to save the money on your own, you would have to first meet the cost of inflation before you saw any “profit,”  so the comparison is fair if not the way you are used to seeing it.

MacGuineas concludes with

“How old will you be when Social Security’s funds run out? We created this easy tool to tell you and show how much money you stand to lose. And we created an even more important one that lets you decide how you would fix it. Maybe our political leaders should give it a try.”

This is the “user participation” part of the con:  By giving you a chance to perform some meaningless exercise they increase your emotional buy-in to the story they are selling.  The fact is that how old you will be when the money runs out is meaningless if the money does not run out… which it won’t if we are smart enough to pay in as much as we will need (with interest) when we get old. When I tried their “how would you fix it” feature it did not allow me to “increase the tax one tenth of one percent per year for each the employee  and the employer each year the Trustees report “short term actuarial insolvency.”  But, hey, that’s a little complicated and not likely something a mark would come up with.

You might try “increase the payroll tax one percent next year, one half percent 25 years from now, and one quarter percent 50 years from now,  and about one tenth of one tenth of one percent per  year after that.

These numbers are for the worker… the money he sees. They would need to be matched by the employer… who no doubt will take the money from any otherwise scheduled raises….  but the issue is dubious and the money is trivial compared to what you are  getting for it:  “peace of mind.  priceless.”

I’ll leave it to the reader ot look for other ways in which MacGuineas spins her language to fool you.  She says some things that are true along the way.  You can look for those too.