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FactCheck is baaaaaaack!

If you care about the truth, you'll subscribe to FactChecks, the email distribution service of FactCheck.org. Be the first on your block to know, when you're forehead-deep in sheep, who is pulling the wool over your eyes.

Of course, they've back on the topic of Social Security reform.

Let's start with the AARP and Progress for America. Both are guilty of minor misstatements.

The conservative PFA addresses the question of how the number of workers supporting the number of retirees through social security taxes is decreasing. This is true. It slips by not mentioning that the ratio includes the disabled and surviving dependents. All in all, not a really attrocious misstatement.

The AARP addresses the issue of stock-market losses with privatized accounts. Again, this is a possibility. The picture they use in their ad, though, comes from a commodities trading floor. Commodities are much more volatile than stocks, and the privatized accounts would not likely feature commodities. Still, just a minor goof; most folks wouldn't look closely enough at the picture to notice.

Less benign is the resurgence of fuzzy math from both democratic and republican sides. Both MoveOn.org and the Bush Administration put the "Cybill Shepard" filter on when building their arguments about the future of Social Security.

I'm really starting to dislike MoveOn. MoveOn uses a 75 year horizon (the current "standard framing," bullshit that it is) to calculate differences between benefits calculated at the current rates and benefits calculated according to their thoughts on what the nonexistent "Bush Plan" would be. Their ad, though, preys on fears that these differences would take the form of near-term cuts that would affect recent and new retirees. I really need to dig up and finish my "no bullshit" letter and make sure MoveOn is one of the recipients.

As bad as MoveOn is with the bullshit, it's got nothing on the administration. "$11 Trillion Deficit" my ass. We're back to "standard framing" and worse.

This whole 75 year projection thing is shaky at best. It doesn't take much to throw a 75 year projection off. Unexpected wars, inflation, recessions and growth all throw projections off, and the longer the horizon the farther off. Can't trust 'em in the first place.

You know what, though? A 75 year projection only forecasts a $3.7 trillion deficit. Wait a minute, did I just say "only" and "trillion" in the same sentence? You would think that I'm a politician.

Where did that "$11 trillion" come from? The adminstration's ass? Well, kind of. To make up the additional $7 trillion (and I do mean "make up") the Bush Administration asked the Social Security Administration to change from a 75 year horizon to an "infinite horizon."

Now didn't I just say that 75 years was shaky enough to be suspect? The American Academy of Actuaries pointed out that the Great Depression and the Baby Boom were both events big enough to throw off any projections, and they happened within 30 years of each other, not 75. "Infinity" is shaky enough to be useless.

So apparently, $3.7 trillion isn't a big enough number for the administration to make its case. That's kind of frightening.


( 4 comments — Leave a comment )
Feb. 3rd, 2005 08:25 am (UTC)
So how did they come up with a finite deficit ($11T) using an infinite projection? Sure sounds a lot like VooDoo Economics .. oh wait, thats The Elder.
Feb. 3rd, 2005 02:13 pm (UTC)
It's not total voodoo, just mostly voodoo. That's $11T in today-dollars; factoring in inflation would of course result in an infinite dollar amount.
Feb. 3rd, 2005 09:33 am (UTC)
And as has also been pointed out, the "divert money away from a programme that's already in financial trouble" solution is also taking a sledgehammer to a problem that can be solved with a much finer tool.

You want to put Social Security on a basis where it has no deficit at all in a 75-year timeframe? Let the age for taking full benefits rise over the course of a generation from 67 to 68 (in line with increased longevity), adjust benefits in line with price inflation instead of wage inflation, and change the Social Security tax rate on wages in excess of $90,000 from the current zero rate to 1%. And the 75-year deficit falls to zero without doing anything drastic.

The Bush Administration's goal has nothing to do with "fixing" Social Security.
Feb. 3rd, 2005 02:11 pm (UTC)
Oh, there are tons of ways to prevent the projected deficit (assuming the projections hold). Increasing the Social Security tax by a point and a half would allow the current formulas to hold for the 75 year projection; by 2 and a half points for the "infinite" projection.

But frankly, nobody is campaigning for anything that would "fix" Social Security. MoveOn is campaigning against any changes; the changes you mention are exactly what they're describing as "cuts." The Administration is campaigning to scrap the program entirely.
( 4 comments — Leave a comment )

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