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Home Publications Blogs Beat the Press WSJ Is Wrong: SS Is Not In the Red

WSJ Is Wrong: SS Is Not In the Red

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Monday, 26 April 2010 22:06

The Wall Street Journal told readers that: "the Congressional Budget Office said recently the social security trust fund will record a deficit in 2010, returning to the black briefly, before permanently going back into the red 2016." This is not true. The Social Security trust fund is projected to show a surplus of close to $100 billion in 2010 and will remain in the black until after 2020.

The Journal likely forgot to include the interest on the bonds held by the trust fund. If the WSJ is talking about the trust fund, then this money must included. It is remarkable that the paper's editors somehow missed this error.

Comments (6)Add Comment
“Stupidity is an accepted phenomenon in politics
written by Scott ffolliott, April 27, 2010 12:35
“Stupidity is an accepted phenomenon in politics. I would almost say: to succeed in politics, one needs a measure of stupidity. Voters don’t like politicians who are too intelligent. They make them feel inferior. A foolish politician, on the other hand, appears to be “one of the folks”. : Uri Avnery
...
written by izzatzo, April 27, 2010 7:35
No, no, no, another errant typo,
It's not, not in the red,
It's SS is Red,
With socialist redistribution,
By Ponzi execution,
Which requires privatization,
By Wall Street emasculation.
...
written by Queen of Sheba, April 27, 2010 11:33
WSJ editors are not in the habit of "forgetting" anything. They are, however, in the habit of including in their articles only the information that will lend support to their notions of what their readers should believe. In this case that amounts to the message that Social Security is going broke and should immediately be "reorganized" with an eye toward its eventual privatization.
...
written by cas127, April 27, 2010 1:52
Yes, by *all means* the important bit of info isn't that SS has gone cash-flow negative seven years early - and therefore has to draw against the already massively deficit financed general budget - but rather the WSJ has left out a comparatively small element of the Trust Fund, which will extend its internally-financed life by a little over 4 years (maybe).

It is thinking (and posturing) like this that has caused the Left to permanently lose credibility with independents.

The bottom-line issue is that the fundamental mismanagement/political gaming of the so-called Trust Fund now (or very shortly) will force us (unless there is an increasingly likely tax rebellion) to sacrifice more of the free economy to the DC-NY shitheel nexus...
...
written by cemmcs, April 27, 2010 2:00
Yes, by *all means* the important bit of info isn't that the WSJ made a false statement. It's that Dean Baker permanently loses credibilty when he points it out. There's no argiung with that kind of logic, is there?
Draw against the GF?
written by Jim Z., April 29, 2010 1:04
The General Fund has borrowed some $2.5 trillion (so far) from the surplus of the SS Trust Fund. [And that bal. is expected to rise to the $6 trillion range before it begins to decline, decades from now] Since 1983, Workers have paid into this surplus with their FICA taxes, additional money against their future retirement. The GF owes every penny of this back to the SS Trust fund for this very purpose. What can you possibly mean by the phrase "draw against the General Fund?" The SS Trust fund has been propping up the GF while Bush gave away GF revenues to his top-end cronies in the form of tax cuts. Follow the money, for gosh sakes.

The idea that Social Security is somehow a burden on the GF shows an utter lack of understanding of fiscal facts and the relationship between the two funds.

We have a crisis of the General Fund, not of the Social Security Trust Fund. The GF is in trouble because of such decisions as the Bush tax cuts, two massive unfunded wars, Medicare part D, and the recession.

Any actuarial issues with the SS Trust Fund can and should be fixed with fairly minor adjustments to its formulas such as raising the FICA wage cap, modestly extending retirement age (due to improved longevity), etc., just as Congresses have done in every decade beginning in the '50's as conditions have changed. Only in recent times has Congress refused to do the normal housekeeping adjustments to the SS program to maintain the 75-year actuarial balance. Wonder who's been behind that refusal?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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