On Sunday, the Washington Post ran as a front-page item a story about Social Security that intimated the Trust Fund was a fiction and generally put a right-wing slant on the matter, in favor of the idea that the social insurance program was in crisis. Dean Baker pounced immediately, setting off a chain reaction that has the writer backpedaling. Here’s Dean:
As the article notes the trust fund currently holds $2.6 trillion in government bonds, so it is nowhere close to being unable to pay benefits. The whole point of building up the trust fund was to help cover costs at a future date when taxes would not be sufficient to cover full benefits. Rather than posing any sort of crisis, this is exactly what had been planned when Congress last made major changes to the program in 1983 based on the recommendations of the Greenspan commission.
The article makes great efforts to confuse readers about the status of the trust fund. It tells readers:
“The $2.6 trillion Social Security trust fund will provide little relief. The government has borrowed every cent and now must raise taxes, cut spending or borrow more heavily from outside investors to keep benefit checks flowing.”
This is the same situation the the government faces when Wall Street investment banker Peter Peterson or any other holder of government bonds decides to cash in their bonds when they become due. In such cases it “must raise taxes, cut spending or borrow more heavily from outside investors.” The Post’s reporters and editors should understand this fact.
Paul Krugman piled on, re-emphasizing the thudding stupidity behind the assumption that a trust fund backed by the full faith and credit of the US government is somehow a fiction. And others joined in. Even the Atlantic Wire reports that the “overall lack of clarity and understanding about one of the nation’s most cherished social programs is alarmingly persistent.”
This journalistic malpractice has a real-world impact, too. The perception of crisis in the Social Security program is exactly what the various Gangs of bipartisan deficit scolds (in this case, a literal “Gang of New York”) need to force their favored solution of austerity down the gullet of an American public speaking out about jobs and inequality, not the deficit. Americans favor social spending and higher taxes on the rich; the deficit scolds can’t have that. So they invent fictions about Social Security to position themselves as saviors, destroying the program in order to save it. This has been the impact of propaganda down the line.
The pressure on WaPo writer Lori Montgomery has been intense. Here was her response to a reader:
I am a journalist, not an economist. If you view Dean Baker as the voice of
god, then I’m afraid we’re not going to get very far.
My article is as accurate and as objective as I could make it. Perhaps you’d like to point out some of these blatant falsehoods so I can respond to them directly.
Voice of God Dean Baker has already done the honors on that. She called the cash-negative position of Social Security, completely expected and planned by those who built up a $2.6 trillion surplus in the Trust Fund, as a “treacherous milestone.” And it goes downhill from there.
It’s good to see what passes for the liberal noise machine at least get the attention of the media disinformation campaign to make it easier to steal retirement insurance from the American public.