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Home Publications Blogs Beat the Press Nate Silver Gets the Story Partly Right on Social Security and Medicare

Nate Silver Gets the Story Partly Right on Social Security and Medicare

Tuesday, 18 March 2014 07:22

In his new and improved FiveThirtyEight Nate Silver examines the sources of increases in government spending over recent decades and identifies Social Security, Medicare, and Medicaid as the culprits. He then notes that these are effectively insurance programs. He then concludes that this explains the decline in trust for government:

"Nevertheless, the declining level of trust in government since the 1970s is a fairly close mirror for the growth in spending on social insurance as a share of the gross domestic product and of overall government expenditures. We may have gone from conceiving of government as an entity that builds roads, dams and airports, provides shared services like schooling, policing and national parks, and wages wars, into the world’s largest insurance broker.

"Most of us don’t much care for our insurance broker."

There is a big problem with this story. Social Security, Medicare, and Medicaid are all hugely popular programs across the political spectrum. If the public thought this was all the government did with their money, the government would likely be very popular. In fact, many people often discount these programs from the government as in the famous line from older Tea Party supporters that the government should keep its hands off their Medicare.

In fact, the public hugely misperceives where government tax dollars are spent, as polls consistently show. For example a 2010 poll found, the public on average believes that 27 percent of the budget goes to foreign aid. The actual number is less than 1.0 percent. A CNN poll from the same year found that the median respondent thought that food stamps accounted for 10 percent of the budget, while subsidies to the Corporation for Public Broadcasting accounted for 5 percent of the budget. (The actual number is less than 0.01 percent.)

Since the public huge exaggerates the portion of the budget that goes to many non-insurance programs, it is likely that its view of the government is more a result of its attitude toward these programs. The latter is in turn probably more negative than would otherwise be the case because of the exaggerated view of the amount of money these programs receive.

Anyhow, the piece does a good job explaining what is and what is not growing in the budget, but since most people are clueless on these facts (largely to due to the pathetic quality of budget reporting), the piece strikes out badly in its explanation of public opinion.

Comments (30)Add Comment
Liking SS doesn't mean I lkie the entity which administers SS, Low-rated comment [Show]
Severe analytical problems
written by Dave, March 18, 2014 8:07
There's a sever analytical problem when a person digs out esoteric statistics and claims that they are what people are reacting to. If so, why do we need Nate to dig out the statistics for us? Everyone already knows this, right?

No, people including the right-wing politicians are all reacting to right-wing propaganda, and Nate tries to find a basis in reality for the propaganda. People are losing faith in government because leaders are increasingly out of touch with reality. They make no sense at all. Everyone can see it, even those that continue to follow the mindless zombies.
His limitations
written by Robert Sadin, March 18, 2014 8:11
Dear Dean, Good on Nate Silver. But should go further. Correlation does not equal Causation.
Silver's remarks aren't even informed speculation. It is just dorm room bs.

written by JDM, March 18, 2014 8:20
Bill H,
I've dealt with social security a couple of times over the past few years and each time was an easy and very positive experience. I've gone in person, without a prior appointment, to one of their offices and found the service to be fast and pleasant with the workers there polite and well informed. And when I applied for my retirement benefits I was traveling overseas, which you'd think would make the process more difficult, but using both the online process and a phone call verification was easy, quick, and the phone call polite. They sent my verification followup letter to my hotel and started my benefits in time (direct deposit). I don't see the problem.
written by Alex Bollinger, March 18, 2014 8:49
It seems like Silver is saying that since SS et al. have been increasing as a percentage of government expenditures since the 1970s, and so has distrust in government, that there has to be a causal relationship between the two (and that that relationship flows from spending to distrust).

That's just silly. I can point to any number of trends that started some time in the 1970's (stagnating real wages, slowing gains in educational achievement, increased high fructose corn syrup consumption...), but that doesn't mean that any of them is causing distrust in the government. But

Establishing causality takes a bit more than showing correlation, and you'd hope that someone like Silver would understand that.
I much prefer my SS bureaucrats to for-profit insurance companies!
written by Tom Zeller, March 18, 2014 8:54
My local SS office staff are quite friendly and helpful. I would much rather deal with them than my for-profit MediGap provider. Anti-governmentt sentiment has been fueled by an incessant multi-decade multi-billion dollar miseducation campaign that is fundamentally intellectually dishonest. It's not by accident that Americans have the wrong idea about where the tax dollars go.
written by Kat, March 18, 2014 9:09
Bill H.
loathe and despise anyone upon whom you depend for your income

I believe this more accurately describes many employers.
written by skeptonomist, March 18, 2014 9:12
Conservatives like to insinuate that tax money vanishes into a black hole, but entitlement programs are mostly direct transfers of money from working people to the non-working elderly, disabled and other non-working people. "Insurance" is not a good description of this, especially Social Security. The people who get the money are actually more likely to spend it than those who are taxed, so the money stays very much in the private economy.

If there were no SS or employer plans, those who are too old to work would presumably be supported by their progeny or in some cases in locally-supported poorhouses, as in the 19th century when most people lived on farms. Apart from allowing people to retire earlier, which would seem to be desirable on the basis of increased productivity, having retirement support handled by the federal government does not really change the economics much.

Insurance companies want to handle health care and Wall Street wants to handle retirement funds, both in order to take huge cuts from the money flow. Capitalists would like to get their hands on the money that flows through SS, in order to speculate with it. But at this point in history there is not much doubt that central governments handle the functions of health care and retirement much more efficiently than private insurance and finance.
written by jamzo, March 18, 2014 9:45
well now we know that "data driven news" isn't any different from traditional media tendency to coalesce around story lines

nate has chose "growth in government spending"....a familiar theme in the year to year news narrative

i notice he selected chart baselines to make sure his
story had a pretty growth visual...1910 to 2014... a historical chart...no context....same old mainstream media reporting gimmick...these charts do not frame
the setting for events or terms in which things can be fully understood and assessed.

nate also seems to take an ideological position

he frames a debate that pits "good economical" infrastructure spending vs "bad economical" health and social spending

"We may have gone from conceiving of government as an entity that builds roads, dams and airports, provides shared services like schooling, policing and national parks, and wages wars, into the world’s largest insurance broker.

Most of us don’t much care for our insurance broker."

this debut is certainly not what i had hoped for

What else happened in the 1970s?
written by ifthethunderdontgetya™³²®©, March 18, 2014 9:54
The Powell Memo in 1972


And oceans of right-wing, Randian propaganda to go with it, ever since.
written by John Shaplin, March 18, 2014 9:54
It isn't just in matters of the Budget and Economic policy that the press fails in its responsibility to report the Budget. In the matter of the Ukraine the first voices they turned to was the likes of John McCain and other Republicans still in the thrall of the paranoid delusions of the Cold War, nationalist emigrants from the Ukraine in Canada and employed by various conservative think-tanks in Washington while ignoring the considered opinions coming from the Kennedy School of Government, former Ambassadors and State Department diplomats, Henry Kissinger and even the moderate leaders of the Maidan itself, not to mention strong showings against intervention in U.S. opinion polls expressing displeasure with more idiotic 'drawing of red lines' in complex international situations where long-term interests should trump any sort of short-term 'dramatic effect'.
written by JDM, March 18, 2014 10:19
Actually, the claims that dealing with some of the "classic" bureaucracies , like SS or the DMV, are horrid always strikes me as out of date, like how you still see TV shows' writers talking about ultra-cheap Vegas buffets that haven't existed for 30 years. For the last few decades, when I've gone to a DMV, I pick a number and get fairly quick service with no standing in line. Much of their customer service is now done by appointment (and of course, nowadays, online). Yet people still talk as if it entails long waits standing in interminable lines, like I used to have to do circa 1970 in NY.

Pretty much the same thing with SS. And of course, as others have pointed out, when you compare to private companies, government bureaucracies look even better when it comes to a pleasant customer service experience. So when someone makes a claim like Nate's guy did, it just makes me wonder if he's been out if the house in the past quarter century, and that makes me discount his thesis.
SS Offices differ
written by Joe T., March 18, 2014 10:26
Bill H.,
Try another office. I've never heard anyone complain in my area.

And if you have a comparable annuity from an insurance company, try finding a walk-in office where you can talk in-person to an agent. For that lack of face-to-face access, you get to pay orders of magnitude more in fees.
"Decline in Trust of the Government" aided and abetted
written by jumpinjezebel, March 18, 2014 1:42
What else has occured during this period? The rise of Faux Noise and especially "Hate Radio". A constant drumbeat of poision that little by little has infected the very core of what America is today.
written by Alex B., March 18, 2014 2:20
I think Pres. Roosevelt would disagree with Nate's assessment that Social Security is anything but a Ponzi Scheme perpetrated on the American people. While it is true, that the Government is in the business of providing--by in large--insurance to many different groups of citizens, it should not be construed to give rise to notion that it has anything to do with the mistrust in government approval ratings since the late 1970s. One must recall, that as the 1970s hit, massive shifts in technological advancements, combined with the decimation of labor unions, globalization patterns, and international trade deficits starting to take effect caused the average American worker to figure out that blue collar work was on the way out. The Government programs such as Social Security, Medicare, Medicaid have been widely popular. If anything should happen, it should be a journey back to the days when these programs were strengthened. Cutting Food stamps and aid to the poorest and most vulnerable citizens so we can go drop bombs on Islamic fundamentalist countries is not the way to win back the support of the American people.
written by PeonInChief, March 18, 2014 3:01
My husband had no trouble applying for Social Security. When the online system wouldn't work, the "faceless bureaucrat" took his application by phone and then solved his log-on problem.

And I have no idea why people are spending so much time at DMV. I have to go in about once every twelve years to renew my license. Everything else is handled online or by mail. The people who have trouble with DMV are those who don't get it together to renew their registration or license until the very last day.

Now, as for Comcast...
Chump Change
written by John Parks, March 18, 2014 8:44
I would like to see more honest
categories and more detail as to what
expenses are attributed to what category.

Whether intentional or accidental, a category that is defined as Military suddenly becomes Defense costs in the graphs.

There was no explanation as to what Military Spending might include.
Defense costs, if we are even attempting to be honest, should include all of the intelligence services, Homeland Security, ATF, Border security,
unfunded wars, and if you add all of this up, you have exceeded a trillion dollar per year figure.

Apparently that is chump change and not to be honestly discussed by very serious people
written by Jay, March 18, 2014 9:37
The theory is likely off. If people were making more money then most possibly wouldn't care about the taxes collected for social imsurance. The problem is medical, education, and childcare expenses are increasingly taking a larger chunk out of the household budget that is more volatile these days. People tend not to be magnanimous when their own needs aren't being met in some form or fashion. This is also compounded by the negative PR for programs in an effort to priviatize all social benefits.
one side of the coin
written by floydd, March 18, 2014 9:40
Nate's preferences clearly exclude TAX EXPENDITURES ,no? Since 1970....(multinational) foreign aid, with a shingle in the U.S.
written by missing the forest, March 18, 2014 10:49
I agree with Dean that declining trust in government hasn't been caused by changing government spending allocations. My impression from Gallup's Confidence in Institutions polls is that in our neoliberal era trust has understandably been declining for decades not just in government but across the board, including media, unions, churches, courts, banks, and schools.
The gradual realization that government ...
written by John Puma, March 19, 2014 1:44
uses citizens' tax dollars 1) to make perpetual, pre-emptive war (resulting in perpetual enemies) AND 2) to run a massive domestic spying operation certainly can NOT have any effect on how the citizen views government!!!

Oh, forgot to mention, nor does any citizen think any less of government (with theoretical possibility of citizen representation) for having allowed itself to be subsumed by modern, stateless, global (legally totalitarian) corporations.

I'd suggest that SocSec, Medicare and similar programs are retained precisely to prevent a huge "spike" in demand for pitchforks.
written by Kat, March 19, 2014 6:04
uses citizens' tax dollars 1) to make perpetual, pre-emptive war (resulting in perpetual enemies) AND 2) to run a massive domestic spying operation certainly can NOT have any effect on how the citizen views government!!!

Thank you. But I guess this is not what the data is "telling" Nate Silver.
written by watermelonpunch, March 19, 2014 7:00
There is a big problem with this story. Social Security, Medicare, and Medicaid are all hugely popular programs across the political spectrum. If the public thought this was all the government did with their money, the government would likely be very popular.

Well said! Bravo!

It's not the government I've had declining trust in... It's the actors in government who have perverse incentives (campaign finance) to act against the interests of their constituents.
written by Kat, March 18, 2014 9:09

Bill H.

loathe and despise anyone upon whom you depend for your income

I believe this more accurately describes many employers.


written by PeonInChief, March 18, 2014 3:01

And I have no idea why people are spending so much time at DMV.
... (edit) ...
Now, as for Comcast...

Comcast beats all government agencies, hands down, for the level of infuriating run-around.
written by Ann, March 19, 2014 8:16
Go look at the DATE on the piece by SIlver.

It was in Jan 2013 ----- over 14 months ago!!

It is out of the ARCHIVE

EIther Silver can't get a date right or the one who found the OLD article can't read .
JDM, you make a good point
written by Bill H, March 19, 2014 9:17
I too have dealth with Social Security several times, and the people have been more pleasant than most businesses I deal with, and their expertise is rather astonishing. The experience has been a very pleasant one each time. My comment was in poor taste.
And this just in ... Silver hires ?slimiest climate change denier
written by John Puma, March 19, 2014 1:22
For his brand new website "Silver has brought on Roger Pielke, Jr., a professor of environmental studies at the University of Colorado Boulder, as a contributing writer – a political scientist who comes with a long history of data distortion and confrontations with climate scientists."

But Ryan Cooper says it much better ...
written by John Puma, March 19, 2014 1:38
General: "Nate Silver's new venture, FiveThirtyEight, is now live, and the reviews are starting to come in. To summarize: it's terrible. Reviewers from Paul Krugman to Tyler Cowen — who seldom agree on much — have panned the launch."

Re Pielke Jr.: "For those who don't know, Pielke is a highly skilled and intelligent policy professor, ostensibly committed to climate action, who spends the vast bulk of his time criticizing the climate movement and allied scientists. They're wrong about drought. They're wrong about extreme weather. They're wrong about economic growth. Etc.

He does accept the reality of climate change, and keeps his criticism just inside the boundaries of accepted science (e.g., with strategic footnotes). So when he gets an irritated response from, say, President Obama's science adviser John Holdren, who accused him of selective quotation and obfuscation, Pielke can twist the criticism around and write a stern, head-shaking article about how those derned Greens are just getting way over their skis on The Science. This is the Breakthrough Institute program for hippie-punching your way to fame and fortune, and its success on the career track is almost as striking as its wretched failure as a political tactic to actually achieve anything on climate change.

That kind of squid-ink careerist nonsense is what led Foreign Policy to put Pielke on its list of climate skeptics. It's what led the late, famed climatologist Stephen Schneider to dismiss him as a "self-aggrandizer who sets up straw men, knocks them down, and takes credit for being the honest broker to explain the mess."

"In any case, this isn't about Pielke, who like the rest of the Breakthrough Boys isn't worth worrying about very much. The point here is about Silver, and his supposedly unbiased project. Presumably Pielke is going to write about climate change — the topic has been his whole career. If Silver truly had an overriding interest in "just analysis" on the issue of climate change, I'd think a bare minimum for a hire would be an actual climatologist. (Pielke's Ph.D. is in political science.)"
Link to above referenced Cooper article ...
written by John Puma, March 19, 2014 1:50
written by President Costanza, March 20, 2014 5:19
I think that Watergate, Vietnam, resistance to busing and civil rights, the failure of Wall Street deregulation, Iraq, and stagnant wages might be better explanations for the declining trust in government.
Taxes do not Fund SS/M/M
written by Potomac Oracle, March 25, 2014 10:12
Reply to Silver

Journalists being the so called first responders decrying bad public policy have failed miserably on the issue of Federal SS/M/M and tax policy. Their premise is that the Federal government must "get" money to fund these and other programs from Agriculture to Zoological Research.

It's the "GET" part of the premise that is ABSOLUTELY WRONG. Americans must ask themselves, "Why would a government issuing its own currency by fiat need to "GET" dollars to spend?"

Then they must deal with the axiom, "THE FEDERAL GOVERNMENT MUST SPEND ITS FIAT CURRENCY BEFORE IT CAN TAX OR BORROW." After the epiphany, Journalists and most Americans will realize that taxation is not needed for the Federal government to complete the act of spending.

All that's needed is a Congressional appropriation. That leads to the conclusion that Payroll Taxes are completely unnecessary as a funding mechanism for SS/M/M or anything in the "budget." The same is true for all other Federal taxes. Tax policy should focus on managing inflation and income distribution, not spending since a monetarily sovereign government never needs to depend upon revenue per se to spend.

The proof can be found in a careful reading of the links below which contain definitive explanations of money creation, taxation, "borrowing" and spending.

Diagrams and Dollars....... Part 1. http://goo.gl/paGQBy....Part 2. http://goo.gl/7YekjX

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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.