Wednesday, May 14, 2014

What Tim Geithner doesn't know about Social Security is ... shocking

From the Los Angeles Times business section, courtesy of Eschaton:

But let's get to the nub. Does Social Security "contribute to the deficit"?

The answer is, bluntly, no. By law, it can't contribute to the federal deficit, because Social Security isn't allowed to spend more than it takes in. Those who claim -- as Geithner has at one point or another -- both that the program contributes to the deficit yet will be forced to reduce benefits to retirees once its trust fund is depleted are trying to have things both ways: The reasoning behind the threat of reduced benefits is that Social Security can't engage in spending money it doesn't have, i.e., deficit spending.


Geithner either knows that, or he was an amazingly inattentive T-secretary. You see, every year he served in Washington he put his signature to the Social Security trustees' report that listed the program's T-bond purchases, in numbing detail. 

More here.

This is what I keep talking about.  The people who get paid the big bucks to understand economics DON'T FREAKING UNDERSTAND ECONOMICS.  And this is a real nuts and bolts issue, pretty simple, not rocket science, not vague, abstract, or weird.  Social Security is on a completely separate accounting system from the one used when we talk about federal deficits, and it's that way by design.  Indeed, as the article observes, the Social Security trust fund is prohibited by law from running deficits.  So any political figure who talks about the need to cut Social Security benefits as a way of dealing with the deficit is either totally stupid or just straight up lying.  

Actually, I'm not sure which is worse.  If Geithner and his ilk don't know what they're talking about, then our nation is being run by total incompetents who need to be tossed out on their asses immediately.  Because, you know, we could probably do just as well with a four year old child in charge.  That's pretty bad.  Chances are very high that the ship of state will be sinking soon, and it's kind of amazing that it hasn't already.  But if they're lying, which I assume would be for various ideological reasons, or for subservience to the vastly wealthy class who own the nation and our political system, or both, then we can be pretty certain that we citizens simply don't matter, and our concerns are seen as nothing short of contemptible.

Stunning incompetence or deep seated malevolence, which is worse?  I suppose in the end it doesn't matter.  The nation is totally screwed no matter how you slice it.