social security

Social Security

Okay, that’s not exactly what Robert Samuelson said, but pretty close. He actually told readers:

What frustrates constructive debate is muddled public opinion.

I just thought I would make a small change in the interest of accuracy.

Samuelson is very upset because almost no one, Democrat, Republican, or independent wants to go along with his crusade to cut Social Security and Medicare. He tells readers with disgust:

In a Pew poll, 87 percent of respondents favored present or greater Social Security spending; only 10 percent backed cuts.

He then demands that President Obama rise to the occasion and insist that people accept lower benefits.

President Obama’s time can probably be more productively spent teaching economics and arithmetic to people who write on budget issues in major news outlets. Most of the main assertions in Samuelson’s piece are misleading or just flat out wrong.

First, the budget is only constrained at the moment by superstition. There is no obstacle to the government borrowing more money to meet needs and put people back to work. We are not spending more money because we have superstitious people with large amounts of power who are making claims about the dangers of deficits that they cannot support with evidence. Rather than lecturing seniors, who have a median income of $20,000, on the need for lower Social Security and Medicare benefits, Obama could try to confront the people spreading superstitions about deficits.

Samuelson’s complaint about the size of spending on the elderly is also highly misleading. He complains:

In fiscal 2012, Social Security, Medicare, Medicaid and civil service and military retirement cost $1.7 trillion, about half the budget.

That sounds really outrageous — those damn old people. Samuelson case is considerably weakened by the fact that the vast majority of this money was paid into these programs through designated taxes. He might think it’s fine to tax people for Social Security and Medicare and use the money for the military or to pay interest on Peter Peterson’s government bonds, but the less educated public might not share this view.

In fact, according to the Social Security Trustees projections, Social Security is completely funded by its designated tax through 2034 with no changes whatsoever. While Medicare is projected to face a shortfall after 2024, the size of this projected shortfall has fallen sharply in recent years. If the path of slower health care cost growth over the last five years continues, then Medicare will be largely funded throughout its 75-year projection period with few changes.

Insofar as Medicare and Medicaid do pose cost problems the issue is that we pay too much money to doctors, drug companies and other providers, not that seniors are getting too much health care. If we paid the same amount per person for health care as people in other wealthy countries we would be looking at long term budget surpluses, not deficits. But Samuelson and his friends would much rather beat up on old people than on rich doctors and powerful drug companies.

One final point on which Samuelson is apparently confused is that the public does understand that there may be a need for money to pay for these programs and in fact is prepared to pay more for them, according to a recent poll conducted by the National Academy for Social Insurance.

Hey, but what can you do? We have a punditry that just won’t accept reality and prefers to beat up on old people. If only President Obama could show some leadership and try to educate people like Robert Samuelson.

Dean Baker is co-director of the Center for Economy and Policy Research. He also writes a regular blog, Beat the Press, where this post originally appeared.

Photo by 401(k) 2013 released under Creative Commons License