The day has finally come

Matthew Hoy
By Matthew Hoy on August 24, 2010

More than five years ago, New York Times columnist Paul Krugman assailed President Bush’s proposal for partial privatization of Social Security and promised a “real plan to strengthen Social Security.”

I created a banner, and some other bloggers put it up on their sites in the vain hope of shaming Krugman into delivering on his promise.

I gave up after 65 columns and 256 days later, Krugman had failed to deliver.

Last week, the day finally came. Here’s the updated banner:

KrugmanPlan Yes, the last number is still correct. You see, Krugman finally revealed his solution to the Social Security problem.

There is no problem.

That’s right, there is no problem.

About that math: Legally, Social Security has its own, dedicated funding, via the payroll tax (“FICA” on your pay statement). But it’s also part of the broader federal budget. This dual accounting means that there are two ways Social Security could face financial problems. First, that dedicated funding could prove inadequate, forcing the program either to cut benefits or to turn to Congress for aid. Second, Social Security costs could prove unsupportable for the federal budget as a whole.

But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.

As I pointed out long ago, there is no lockbox. Krugman refers to the trust fund, it’s the same thing. That trust fund holds nothing more than meaningless IOUs. I wonder if Krugman would give me a personal loan for a couple hundred thousand dollars based on the fact that I’d written myself an IOU for $2 billion.

Krugman’s dishonesty is shocking. He knows better, but he’ll lie for transparent political points that only his sycophantic amen chorus will believe.

So, more than five years later, the banner is officially retired, along with any hope that Krugman could ever be an honest broker.

On a related note: Bruce McQuain has similar thoughts on this issue here.


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August 2010



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