Thursday, August 26, 2010

Matt Bye

In an earlier post, I expressed my initial hopes and later disillusionment with Matt Bai. But it’s worse than that, folks. In today’s Times, Bai writes
The coalition bases its case on the idea that Social Security is actually in fine fiscal shape, since it has amassed a pile of Treasury Bills — often referred to as i.o.u.’s — in a dedicated trust fund. This is true enough, except that the only way for the government to actually make good on these i.o.u.’s is to issue mountains of new debt or to take the money from elsewhere in the federal budget, or perhaps impose significant tax increases — none of which seem like especially practical options for the long term. So this is sort of like saying that you’re rich because your friend has promised to give you 10 million bucks just as soon as he wins the lottery.

No: it’s like saying you’re rich because you have ten million bucks in Treasury bonds.

What would Bai prefer the Social Security Trust Fund invest in, Cuban cigar futures? Timeshares in Greece?

The finances of SS are just fine, thank you. And no matter how you juggle the money, the consumption of every retired generation is produced by those who are working at the time. Either you are willing to pony up for the geezers or you aren’t. Matt is apparently a catfood kind of guy.


Don Levit said...

The problem with Social Security is that it is, primaily, a pension plan, but does not operate as such.
A cash-based accounting system is not set up to fund future liabilities.
Since the money has to be raised from either higher taxes, lower revenues, or borrowing from the public, the trust fund is unfunded.
It is merely an accounting mechanism.
The existence of the trust fund doesn't make it any easier for the government to come up with the money.
Its funds were spent years ago.
So, today, we're starting from scratch, just as if there was no trust fund.
Don Levit

Jack said...

Don's been telling that same lie over at AB over the past couple of weeks in his comments to a variety of postings. He's been getting his butt kicked by Webb, Coberly and others, including myself, who have been respopnding with facts rather than allowing Don's fictions to stand. What he seems not to comprehend is that a T-Bill is a T-Bill, a Treasury debt owed intra-, or external to, government have an equal claim on the tax payers. Don seems not to believe that excessive mililtary spending is an area of potential budget reform. He also seems not to understand that the Bush tax cuts were passed only after an agreement to make them last only long enough for the wealthiest tax payers to run home with all the bacon. He seems to think that those same wealthiest tax payers owe less to their government than does the average working American.

The Social Security legislation as it was originally structured and subsequently revised lays out the truth in clear english. The Trust Fund was funded with the sweat equity of workers. We all made contributions to the system that were more than nmecessary to fund the system in real time. The SS Act required that the Treaury Dept hold those excess contributions and invest them in America. That's the Trust Fund's assets, invested in America. It is not merely "intra-governmental" debt. It is worker's wealth not having been needed to fund the benefits of prior and current retirees. Stop lying about these issues. As I've suggested else where, you are either employed by a Peterson organization, or you are simply a dupe of that ilk. Take your propaganda to the rubes. It won't work amongst the educated.

Jack said...

Have heart dear readers. Go back to the Matt Bai column, (it's not a news piece as it does not report any facts), and skip past the BS going straight to the comments. I only browsed, but the weight of the opinions is that Bai and Blumenauer (assuming he is quoted accurately) do not have the pulse of the readership of the NY Times.
Hopefully they do not understand the mood and ideas of the general population. The comments soundly criticize both discussants and sound significantly better informed on the subject matter. Maybe there is electoral hope for the future.

TheTrucker said...

Don Levit said:

"The existence of the trust fund doesn't make it any easier for the government to come up with the money. Its funds were spent years ago. So, today, we're starting from scratch, just as if there was no trust fund."

That is what is called lying pig shit. What's so politically difficult about taxing the rich people that didn't pay the taxes they should have over the last 30 years?

Back in the 1980's Allen GreenJeans and Ronald Republican Ray Gun decided to dramatically increase the FICA tax in order to see to the predicted forthcoming demographic bulge. The reality was, of course that this actually helped Ron the Con shift the tax burden off the rich folks and onto the worker bees. It made the huge deficits created by Ronnie's gutting of the progressive income tax seem smaller.

The other leg of this fairy tale is that this would allow the rich people to keep their money so they would INVEST and create good paying jobs in the future and thus resolve the "bulge" problem through increased productivity and wages.

Returning to reality land that pig didn't sing either.

So what we have is the unassailable fact that the rich people owe the money to the worker bees. And that means a tax increase on the rich people that were supposed to have INVESTED the money. Pay up, sista.

Jack said...

Well it didn't take Matt Bai very long to come up with another hatchet job disquised as journalism in the NY Times. Check out today's front page. No, you can't do it on line because the front page is not the first page on line, though you can hunt it down and find a tiny pica version. The piece reads like a Republican Op-Ed piece concerning the publics' likely confusion over Obama's newest economic plans. As usual the early paragraphs are the most offensive. Here, for example,
are two and three:
"In this way, Mr. Obama risked confusing the voters — and not for the first time. By consistently conflating short-term and long-term economic goals, the president and his Democratic Party may have missed an opportunity to explain the crucial difference between the two, and they have all but ensured that voters this fall will give them credit for neither."

"Mr. Obama is already faced with the reality that voters have, fairly or not, decided that his first big effort to revive the economy, the roughly $800 billion package enacted right after he took office, was a qualified failure, and that anything tagged as further “stimulus” will be cast by Republicans as throwing good money after bad."

That's more opinion than it is news. Interestingly the headline of the piece changes from the actual front page to the web site version. Front page: "In Obama Economic Stance: Risk of Confusion." The on-line version on the other hand says this: "Crisis Past, Obama May Have Missed a Chance." On line it shows as the opinion piece that it is, but in print it appears as news.