This week, readers continued to lambaste us over Social Security, and one sent a comment on New Jersey Gov. Chris Christie.
In the FactCheck Mailbag, we feature some of the e-mail we receive. Readers can send comments to firstname.lastname@example.org. Letters may be edited for length.
Social Security Spin
I read this ["Democrats Deny Social Security's Red Ink," Feb. 25] because a friend pointed it out. In the past I have found FactCheck.org to be fairly neutral in its presentation of "the truth." This time you seem to have added your own spin. Based on your logic, it is just as correct to say that everyone who owns a Treasury bill is contributing to the deficit or that everyone who gets an income tax refund is contributing to the deficit. While there may be some technical truth in this comparison, it doesn’t pass the smell test. Frankly, I’m shocked at your failure to reconcile the apparently contradictory statements on the Social Security issue. I expect you to shine light on issues and not just add heat.
Farmers Branch, Texas
OK, your critics got it almost right. They got it wrong on one point, and some got it wrong on a second. And FactCheck should have gotten it right on both, especially having an opportunity to correct it all.
The Social Security Trust Fund was not raided; the special Treasury notes were not a way to cover up government spending. All Social Security surpluses have been required by law to be invested in Treasury notes from the very beginning. This isn’t a raid; did anyone really think they were going to put the money into a vault somewhere and sit on it? If they did, why would it draw any interest at all? The "Lock Box" was the dumb idea.
The other point some got wrong is the notion that the current problem is due to fiscally irresponsible spending in the past. Look at the debt as a percentage of the GDP, otherwise known as the debt burden. From WWII till 1980 that burden went down from 122% of GDP to 33% of GDP. Under Reagan it started up again. Under Clinton it went down some, but under Bush II it started up again, until Obama inherited a national debt pushing 90% of GDP. Note this is total debt, not just debt owned by the public. It all has to be paid back sooner or later. Note that the entire increase in the post-WWII debt burden was accumulated under three anti-tax Republican presidents. That was the fiscal irresponsible time, not under any other presidents.
The current problem with financing Social Security is still not because of the high debt burden, but because of high unemployment. Bring unemployment down under 5%, real unemployment not the politically reported low levels, and Social Security becomes sound for a very long time to come.
Jobs are the problem, jobs are the solution.
Robert W. Klahn
I am not an economist, nor an accountant, and I have no experience running a business. But I can think, and I just can’t accept your analysis of Social Security. You argue that those who claim that Social Security does not add to the deficit are not telling the truth. I disagree. I think they are exactly right and I think that you are exactly wrong.
If the government had to pay $37 billion to help finance SS, it’s not a subsidy; it is giving money back that was borrowed. If you’re going to say that $37 billion was “drained” from the Treasury and thus added to the deficit, then you have to admit that at the time it was borrowed it poured money into the Treasury and thus reduced the deficit by the exact same amount. It all evens out in the end.
The fact that Social Security is a self-financing system is true, period. It doesn’t require a specious qualification as “in a very narrow, legalistic sense.” To the contrary, it’s your characterization of it as draining from the treasury that is, if anything, a “very narrow, legalistic sense.”
When we talk about the solvency of Social Security, normal people understand that to mean the solvency of the system itself, its design, not what has been done to it. As you acknowledge, that design has produced a $2.5 trillion surplus. If that money had been kept in a vault instead of borrowed, would it still be contributing to the deficit?
You threw around some statistics to demonstrate the problems with Social Security in your analysis. Fine, I’d like to add a few.
1) Over the last 30 years the wages of workers in this country have gradually fallen behind their productivity for the first time in history. That means that they are underpaid compared to past generations. If they had kept pace with productivity they would have been pouring even more into the SS fund. Why is this rarely mentioned as one source of the problem?
2) The federal deficit began to balloon out of control by putting two senseless and hyper expensive wars on the national credit card and at the same time lowering taxes.
3) The current economic crisis was not caused by government overspending or entitlements, it was caused by massive unprecedented fraud on Wall St. and in particular a deregulated banking sector. The misery and unemployment that have resulted will depress government revenue for at least a decade. Why don’t we focus on that?
I don’t have much faith in the Democrats, but they are not the source of the problem. The idea of cutting the SS payroll tax is not just a horrible idea economically, it’s a political disaster for those of us who believe in Social Security and want to preserve it. Obama should be ashamed of himself. I can’t believe that you don’t understand these things and for the life of me I can’t figure out why you write what you do.
New York, N.Y.
I read with interest Mr. Jackson’s article on Social Security and its alleged contribution to our fiscal crisis. I was astonished to see that no mention was made of the surplus accumulated in the Soc Sec trust fund. I think the rebuttals made by several respondents, which you admirably featured in your FactCheck Mailbag block on your main page, are cogent.
I wish here only to add: The concept of a LockBox is either meaningless, or silly. The government, unlike the private citizen, is unable to save money. Where should it do so? Invest on Wall Street? That would be socialism pure and simple. So the excess funds that the FICA tax has brought in since the reform in the mid -1980s were lent by the Soc Sec trust fund to the rest of the government, receiving in return government bonds, backed by the "full faith and credit of the U.S. government." It was these bonds that the Shrub exhibited to the world, in a filing cabinet in WV, if memory serves.
You are correct that the Soc Sec administration has now got to start calling in those bonds. And of course this stresses the government financial position, and gives the Repubs another opportunity to attack the very idea of Soc Sec.
I very much hope that Mr. Jackson can be induced to write a clarifying article at least mentioning the loans that the Soc Sec Trust fund has made over the past 25 years to the government. It is not good policy for FactCheck to let these obvious corrective points be buried in your letters file.
With admiration for your work in general!
Silver Spring, Md.
FactCheck.org responds: Please see our Wire post "Our Angry Readers," responding to the many critical letters we have received on this issue.
Christie Was Accurate
Your "fact-check" attack on Gov. Christie ["Christie Misrepresents State Workers' Contract," Feb. 28] appears untrue. By your own reporting, state workers received a 7% pay increase in one year, which is what he said. Your report confirms the statement was accurate. Governor Christie’s not mentioning other changes in the contract do not negate the fact that what he said about the pay raise was factual.