Social Security turned 75 last week, and yet I saw few demands to retire the program.
Instead, pundits like Paul Krugman took the occasion to praise the septuagenarian boondoggle.
Krugman started boldly, saying that the program “brought dignity and decency to the lives of older Americans.” Huh? Social Security has indeed brought a steady income to retired Americans, many of whom would have had to rely on their children’s help to live out their last years. But Krugman doesn’t say that. Instead he implies that, before Social Security, old folks led indecent and base lives.
But think about this: Saving for yourself and living on a limited means is indecent? It lacks dignity?
Krugman also talks about the economics of the program, defending, for instance, its dual accounting method in a bizarre way. But mostly he steps carefully around Social Security’s biggest failings, which include the intergenerational swindle, providing bigger rewards-over-contributions to earlier retirees than to current recipients, and, by its nature, will take more from, and give less to, future retirees.
Most shockingly, though, he says this: “Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund.”
Krugman does all but state that the special account has money in it.
It doesn’t. The “trust fund” consists of IOUs from Congress. That’s it.
I guess Social Security is a program too important to Krugman to tell the truth about.
This is Common Sense. I’m Paul Jacob.
9 replies on “Social Security Beyond Retirement Age”
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Paul,
Thanks for a well thought out column. It goes without saying that Paul Krugman is a quintessential jackass.
Starting to look like the selection process for the Nobel in economics is every bit as stringent as the one for peace. All one has to have done is to have the potential to make a positive impact.
Too bad that the Nobel committee didn’t include a performance clause, so that they could get it back in case someone turns out to be a flake.
There is a certainly portion of the population for whom social security provides extremely important and appropriate benefits. But I was shocked to hear Krugman actively supporting the duplicitous accounting for social security’s Revenues and Trust Fund.
From the revenue and asset side, social security is a fraudulent Ponzi scheme whereby our government hides the fact that the working middle class (salary and wages from approx. $34K — $107K) pays higher marginal tax rates on earned income than their more affluent neighbors. (Note: I am referring to earned income only, not even addressing the unjustifiable preferential treatment the wealthy receive in relationship to their assets and investment income.) Social security is a social benefit program. It is not a retirement savings program. There is no “lock box”. FICA “contributions” are not invested in physical or financial assets; they intermingled and consumed as general government revenues – used to fund unsustainable current deficits.
I share Krugman’s concern about the potential hardships of misguided benefit cost cutting that could indeed remove the benefits from some who need them. But until and unless we acknowledge the dishonesty and inequity that underlies our federal tax revenue policies, and perpetuates a Myth of Progressive Tax Policies while the working middle class pays higher marginal tax rates than the wealthy, we have no hope of finding a better, more equitable, and more fiscally responsible path.
For more on the perspective I espouse I invite you to spend a few brief minutes at http://www.2pctsolution.com
Respectfully,
Douglas Hopkins
[…] I don’t know which this sounds like more, something out of Get Shorty or the Social Security Act of 1935. […]
I just read your column on social securty benifits having no increase till 2014! why did you not mention in this bad economy that congress and the potus has brought upon us,that congres gave themselves a nice raise.we the people should have a vote on all of congress pay raises linked to the state of the economy that they created. these people are all millionares and surley don.t need a raise with all the perks they get from the goverment.i guess that would make sense,something that is lacking in washington D ebt City.
sorry about misspelled words .I was angry,disgusted and it was early.god save us in america from our law makers that don’t have to obey the laws they creat for us-WE THE PEOPLE.AMERICA GET INFORMED READ THE CONSTITUTION AND THE DECLARATION OF (YOUR} INDPENDENCE. MOST BOOK STORES AND IT COST LESS THAN $5,00 I WILL BE THE BEST FIVER YOU EVER SPENT.
[…] “Social Security Beyond Retirement Age” – Common Sense by Paul Jacob – on Paul Krugman’s swindle cover-up […]