Tuesday, February 22, 2005

TNR Online: debunking more Social Security nonsense

Noam Scheiber takes on Charles Krauthammer's incoherent argument about the allegedly non-existent SS trust fund.

Unfortunately for Krauthammer, the logic of preemptively defusing the Social Security crisis only makes sense if you believe in the Social Security trust fund, whose existence he just spent all that ink refuting. If you don't believe in the trust fund, it makes no difference whether you start cutting benefits today or in 2018, the first year Social Security pays out more in benefits than it receives in payroll tax revenue. The size of the benefit cut or the tax increase you'd need to eliminate the red ink in 2018 would be the same either way.

Think about it this way: Social Security is going to run a surplus every year between today and 2018. Those surpluses accumulate in the trust fund. The only thing you'd accomplish by cutting benefits or raising taxes today is to increase the size of Social Security's annual surpluses, which would increase the size of the trust fund.

Now, if you believed in the trust fund, you'd agree that this additional money could be used beginning in 2018 to keep paying full benefits to all retirees. But Krauthammer doesn't believe in it. He wants us to tighten our belts today in order to run a surplus that, according to him, we would then flush right down the toilet.

Now you know why they feel the need to slime the AARP -- with logic like that, smear campaign and misdirection are about all that is left.


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