Cut social security now. Or else….we will have to cut social security later

by pdxblake

The idea of a “grand bargain” is increasingly unlikely, and that is a good thing because the entire underlying assumption of a need to cut spending in exchange for cutting sequestration is a false choice. But, what’s worse is the claim that somehow the choice now is not whether we cut Social Security, Medicare and Medicaid, but by how much.

This is a false choice and often based on long-term projections that are inherently uncertain. For example, the idea that social security will run out of money soon, so we should cut benefits now is a silly idea that relies on a mistaken idea of how the program works (the social security tax would still cover most of the social security payments for the indefinite future even after the trust fund is exhausted).

The people arguing that the social security will run out of money also argue that the ‘social security trust fund’ is worthless anyway because…it is invested in Treasuries. But, from the same people who were willing to sacrifice the value of the US promise to pay now in exchange for Obamacare contraceptives I don’t know.

So, the state of information on these programs is poor to begin with, but we can count on NPR to illuminate make a totally pointless story about the intergenerational class war. During the story, the host makes light of a criticism from Paul Krugman, but rather than take his argument at face value, just laughs it off as a badge of credibility for an organization that is trying to cut social security and medicare to fix the deficit just out of spite (as with many of these types of crusades, they have ever-shifting rationales depending on what the perceived current problem is).

But the idea that Social Security or Medicare is a class intergenerational war is just false.  We developed a social compact after the Great Depression that allowing the elderly to live in poverty or without healthcare was cruel and not becoming of our collective ‘Merica.  And we didn’t want to watch an entire generation of people live in poverty and die very preventable deaths, so we made benefits for one generation funded by the tax payments of the younger generations.  So there is some intergenerational transfer, but it is not just from today’s young to today’s old (the war argument), but was also from yesterday’s young to yesterday’s old, so the people paying in the last generation are the people receiving benefits now.

That’s not intergenerational warfare, just a collective savings mechanism.  And the boomers collecting benefits today were paying in extra since 1986 to pay in advance for the benefits they are collecting (which were invested in Treasuries).  It is silly and disingenuous for NPR to promote arguments to the contrary without highlighting the inherent ridiculous of the argument.  The people who have been trying to cut Social Security and Medicare, have been doing so for years for various, in chameleon-like garb with doom and gloom predictions that rely on the “well it hasn’t happened today, but in the distant future it will” to conceal their spiteful intention to destroy the safety net, well, just because.

And it would be nice of NPR to accurately report the story without just promoting their latest excuse of why these programs should be cut now to solve the problem of cuts decades into the future.

Update: There is one story on Social Security today that I can find online, but this isn’t the one that irritated me (though parts of it did).  The article I was ticked off by had a woman going off about “consumption” vs “investment” (with Social Security counting as “spending” with the insinuation that it was not valuable), and I can’t find a link for it.  If you have drop in comments.