Monday, July 28, 2008

Let's tell the truth about Social Security

My peaceful Sunday morning was turned upside-down when I read an infuriating article in our local newspaper by the so called "Reader Advocate". Here's a link to the original:

Fixing Social Security is something I have been advocating long before it became a common topic of conversation since I had become involved with the work of the Concord Coalition. The article prompted me to produce the following rebuttal which I sent to the paper this morning:

To the Editors:

There is much to object to in Gary Vincent’s Sunday column (“Deciding what is news more art than science”, Nashua Telegraph, 7/27/2008). To enumerate them all would probably take more words than the original column and exceed the reasonable length of a letter, so I’ll focus on the most infuriating of them.

In his column, Mr. Vincent offers some analysis of John McCain’s proposals to fix the funding of Social Security over the long term. First he asserts that “claims that current workers ‘won’t receive benefits’ and that the system will ‘go bankrupt’ are false, or at least a gross overstatement”. He backs this up by offering us a time line of fiscal events derived from the Social Security Trustee’s report. From this timeline a reasonable person would conclude that the system is fully funded thru 2041 and fixable with some “tweaks” for the foreseeable future. Unfortunately, Mr. Vincent leaves out some important facts which would easily persuade us that the real situation is very different.

The most import date in Mr. Vincent’s time line is 2017, at which point the government’s cost of Social Security benefits paid exceeds the amount of Social Security tax revenues collected. So far and until 2017, the amount of taxes collected has exceeded the cost of benefits paid, often by substantial amounts. As of 2007, the assets of the Social Security Trust Fund which represents the total excess taxes collected since 1937 plus interest exceeds two trillion dollars. By drawing on these assets and future interest Mr. Vincent claims Social Security can continue to pay planned benefits to 2041.

The important fact left unstated is that these assets are not like the money you and I may have stashed away in a savings account for a rainy day. This money was spent as soon as it was collected on all the other various things the government sees fit to spend money on. What’s left is two trillion dollars in IOUs that the government has written to itself, and in 2017 payback time arrives. How does the government pay itself back? By taking money from its general revenues, which is (in no small part) the money you and I pay in federal income taxes. So in 2017, not only will the federal government have to make good on its Social Security debt obligations, it will also have to do without the excess Social Security funds it’s been using to balance the rest of its spending budget…a double whammy. As the baby boomers continue to reach retirement in larger and larger numbers the cost of benefits grow exponentially. At the same time, the ratio of workers paying taxes to retirees collecting benefits flips driving the shortfall between taxes collected and benefits paid ever higher. Once these facts are brought to light, the problem of funding Social Security into the coming decades should be clear to even the casual observer.

So why would such an obviously crucial fact that might well lead us to an opposite conclusion be missing from the analysis? Mr. Vincent is obviously an educated and intelligent individual. Frankly, I find it inexplicable. The only reasonable conclusion I can come to is that Mr. Vincent is less interested in reporting the facts than in promoting a particular political agenda which inconveniently runs contrary to the fiscal reality. So in an opinion piece which is ostensibly on the subject of the quality of news, Mr. Vincent chooses to promote half-truths which lead us to the wrong conclusions about the fiscal health of important federal social programs. On its face, this seems to raise the irony of Mr. Vincent’s title of “Reader Advocate” to Orwellian proportions.

This raises some serious questions in my mind. Where does one go to complain about the obvious political favoritism in the opinions of the “Reader Advocate” whose job it is to impartially consider complaints about the editorial policy of the newspaper? By choosing to publish such blatantly partisan political advocacy under the guise of news, don’t he and the editors compromise the position of “Reader Advocate” as impartial arbiter? How can we trust his judgment when considering charges of biased reporting by the newspaper? I have to say for this reader, the content of this article demonstrates a serious lack of judgment on the part of all the parties involved.
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