Never Bring a Bobo to a Brain Fight

David Brooks and Paul Krugman both write about Social Security. One man is a pablum issuing, template using, thumb-sucker...one is a Professor of Economics and potential Nobel Prize winner in that field.

It goes about how you would expect.

Bobo:

Which brings us to the current moment. In Europe, everybody is aware of the problem, but the remedies are so bad that most countries avoid them. Meanwhile, we in the United States are embarking on our own debate over the future of Social Security. Many liberals are claiming that we don't need to fundamentally revamp our system because there is no crisis. To the extent that's true, it is because we have not been taking their advice for the past 50 years.

...uh-huh, like we didn't listen to liberals over those Bush tax cuts and Iraq, and, of course, about seventy years ago we listened to those damned liberals when we created the most successful program in the nation's history too!

Meanwhile, after nanny has spoken, it's time for the Professor to chime in...

Krugman:

The people who hustled America into a tax cut to eliminate an imaginary budget surplus and a war to eliminate imaginary weapons are now trying another bum's rush. If they succeed, we will do nothing about the real fiscal threat and will instead dismantle Social Security, a program that is in much better financial shape than the rest of the federal government.

In the next few weeks, I'll explain why privatization will fatally undermine Social Security, and suggest steps to strengthen the program. I'll also talk about the much more urgent fiscal problems the administration hopes you won't notice while it scares you about Social Security.

Today let's focus on one piece of those scare tactics: the claim that Social Security faces an imminent crisis.

That claim is simply false. Yet much of the press has reported the falsehood as a fact. For example, The Washington Post recently described 2018, when benefit payments are projected to exceed payroll tax revenues, as a "day of reckoning."

Here's the truth: by law, Social Security has a budget independent of the rest of the U.S. government. That budget is currently running a surplus, thanks to an increase in the payroll tax two decades ago. As a result, Social Security has a large and growing trust fund.

When benefit payments start to exceed payroll tax revenues, Social Security will be able to draw on that trust fund. And the trust fund will last for a long time: until 2042, says the Social Security Administration; until 2052, says the Congressional Budget Office; quite possibly forever, say many economists, who point out that these projections assume that the economy will grow much more slowly in the future than it has in the past.

So where's the imminent crisis? Privatizers say the trust fund doesn't count because it's invested in U.S. government bonds, which are "meaningless i.o.u.'s." Readers who want a long-form debunking of this sophistry can read my recent article in the online journal The Economists' Voice (www.bepress.com/ev).

Brooks is now intellectually on the floor holding his nuts (does he have those?)