Keynesian ideologue Paul Krugman is out with a
piece in the New York Times praising
Social Security as proof that the
government is the solution to poverty in America. He wants us all to celebrate
Social Security's 75th anniversary. He goes on to lament the fact that some Democrats and most Republicans are considering cutting benefits and/or raising the retirement age to 70. According to Krugman,
Social Security is in a strong financial position and should not be changed because it would hurt the poor. Ever the elitist, Krugman takes it upon himself to set the record straight on
Social Security stating:
About that math: Legally, Social Security has its own, dedicated funding, via the payroll tax (“FICA” on your pay statement). But it’s also part of the broader federal budget. This dual accounting means that there are two ways Social Security could face financial problems. First, that dedicated funding could prove inadequate, forcing the program either to cut benefits or to turn to Congress for aid. Second, Social Security costs could prove unsupportable for the federal budget as a whole.
But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come.
I am impressed with the arrogance of this economist who has been wrong time after time. Just for readers to remember, this simpleton called for the
Fed to create a
housing bubble in 2002 to "stimulate" the economy. What is particularly scary is that the ruling class in Washington and at the
Fed listens to this bedlamite. Anyway, Krugman again makes numerous mistakes when he discusses the alleged solvency of
Social Security. He asserts that because
Social Security ran surpluses for 25 years, it has credit in a special account called the trust fund. This is not correct. While it is true that Social Security did run surpluses, the problem is that the
government already has spent them. In return,
Social Security was given nothing more than an accounting entry confirming the fact. The truth of the matter is that all
Social Security has is paper IOUs from a bankrupt and heavily indebted
federal government, which has been forced to
print money to pay its bills. If the government was to make good on these IOUs they would have to either borrow more money, raise
taxes, cut spending, or
print money. Krugman would be correct if the
government had not stolen the
Social Security's surplus for the past 25 years and used it to fund normal
government spending. But they have spent the surplus, and so the idea of a trust fund with hundreds of billions stashed a away for a rainy day is a lie. If Social Security is to be funded after it slips into perpetual deficit, it will come from directly from the government and not from people paying into
Social Security.
