Social Security Is Not “Paying Itself”

2017-11-07T15:26:53+00:00April 7th, 2015|Equal Time|

 

McArdle’s disdain for Social Security is sprinkled throughout her error-laden story.  Here are just a few samples (emphasis is ours):

“no one, left or right, really wants to take on our vast army of retirees…”

“progressives who are ideologically opposed to shrinking the welfare state…”

“It is supremely irrelevant whether that money flows through the “trust fund” or Uncle Sam holds an annual ceremony in which the trustees are handed one of those giant checks they present to lottery winners…”

“Social Security’s great political strength is the perception that beneficiaries have earned their benefits…”

“The only reason that the system isn’t in the red already is the net interest the government is paying itself on the bonds in the trust fund.”

Source: The Left Gets It Wrong About Social Security

Columnist: Megan McArdle

 

Correction:

As a columnist, McArdle is paid to express her opinions.  However, as an employee of a “news organization” she should be expected to at least build her case based on facts.  As the Los Angeles Times correctly assessed, “It’s rare to find so much sophistry, misunderstanding and misinformation about Social Security in one place.”  So much so, we can’t even begin to fact-check all of it; however, we’ll address the first four quotes listed above as classic examples of how conservatives consistently choose language describing Social Security as if it’s a “welfare state” where “vast army of retirees” are lucky enough to be “handed…giant checks” like lottery winners.  After all, it’s only a “perception that beneficiaries have earned their benefits.” Of course, the truth for millions of Americans who have actually worked and paid into Social Security for a lifetime (not just “perceived” that they did) does not resemble the political and verbal mythology created by conservatives like McArdle in any way.

The claim that Social Security’s financing is actually worse than it appears because of some sort of accounting gimmick by which “the government is paying itself” shows either complete  ignorance of how the Trust Fund works or willful misrepresentation of the facts.  Simply put, the federal government pays interest on the money it borrows from American workers’ payroll tax contributions to Social Security.  That’s not the same as “paying itself.”  It’s a legal obligation we owe to all bond holders.  We also do this for the bonds in Warren Buffett and Pete Peterson’s portfolios, so why do conservatives never treat that as somehow suspect?  While defaulting on our debt to Pete Peterson or China would never be allowed (nor should it)…refusing to pay back America’s retirees is not only acceptable to conservatives but exactly the solution alleged “fiscal hawks” want Congress to adopt.