Social Security status-quo defenders have assured us for the past 25 years that Social Security is fully funded—for the next 25 years, or 2036. So if there are real assets in the Social Security Trust Fund—$2.6 trillion allegedly—then how could failure to reach a debt-ceiling agreement possibly threaten seniors’ Social Security checks?
The answer is that the federal government has borrowed all of that trust fund money and spent it, exactly as Krauthammer asserted. And the only way the trust fund can get some cash to pay Social Security benefits is if the federal government draws it from general revenues or borrows the money—which, of course, it can’t do because of the debt ceiling.
Thus, the answer to my initial question is that the president is telling the truth now in the sense that he is conceding there’s no money in the trust fund to pay benefits; but he and other Social Security status-quo defenders have been deceiving the public for decades.
And here’s the real irony: Anytime someone has proposed personal Social Security retirement accounts as a way to ensure that people have real assets in their own account without bankrupting the government or future generations, defenders of the status quo would pounce, calling such a reform, in Al Gore’s words, a “risky scheme.” They have vociferously claimed that those trust fund assets are real and that only by having the government manage and control the accounts would seniors be guaranteed to get their retirement checks.
Well, we have the status quo and seniors may not get their checks.
Friday, July 15, 2011
People have been slowly catching on to the fact that Obama's threat to withhold Social Security checks contains an unexpected admission against Democrat interests: if there isn't enough money to write SS checks, doesn't that mean the sacrosanct "trust fund" is empty? Verum Serum picked up on it first (actually, they credit Say Anything with being earlier). Now Investors Business Daily and Forbes are bringing the story closer to the mainstream.
The crazy thing is that it's really not that unusual for Social Security checks to be threatened during times when serious budget cuts are under discussion. Yet, everyone has so totally bought into the idea of a Social Security "lock box" on the one hand, and the "Republicans want to kill Grandma" on the other, that the president can go on television and make these sort of reality-challenged claims without anyone batting an eye. Scott Pelley, who was interviewing Obama when he threatened the elderly - talk about throwing Grandma off a cliff! - didn't say a word, of course. But even Republicans can be slow on the uptake on this sort of thing.
Democrats will say this is no problem because it's "just politics." But, politics is the only reason we have Social Security and a million other drains on the federal coffers. Moreover, the MSM is always happy to provide Democrats with friendly coverage that elides the basic contradictions in their rhetoric. No Republican is allowed to get away with the sort of facile double talk with which Democrats "protect" The Elderly, The Poor, The Children, The Workers, and Anyone Else you could name. That's why serious reform is virtually impossible until liberals can't rely on predictable MSM narratives about brave liberals "holding the line" against "intransigent Republicans."