> -----Original Message-----
> From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On
> Behalf Of J. van Baardwijk
> Sent: Wednesday, August 29, 2001 1:27 PM
[snip]
> >First, I think that this is a classic example of media incompetence.
>
> Maybe I am overlooking something here, but from your post I got the
> impression that you call the media "incompetent" because they
> write things
> you do not agree with. Please explain further.
Good heavens, I'm going to agree with JDG... at least with regard to the
media on this issue. Most of the reporting on this idea that the federal
government might have to "dip into" Social Security funds has been awful,
but awfully typical. The media (by which I mean advertising-based mass
media) often awards great political significance to something that really
doesn't have much practical impact -- and that's just what is going on here.
The core issue is the safety of the Social Security system; the question of
"hitting it up" this year (or in the next few years) is a cash management
issue with virtually no effect on Social Security's ability to remain
solvent this year or in any future year. Social Security, which is funded
by bonds, not the cash flow that pays the interest on those bonds, is
forecast to have a *surplus* of $2.4 trillion over the next 10 years. In
other words, it has positive cash flow and that extra money is perfectly
reasonable to use, today, for other federal government purposes. It's not
as if that money is coming from outside the budget, allowing the government
to expand beyond what is already budgeted. It's a cash flow issue, period,
but the mass media makes it into a political football, which is a
fundamentally cynical attitude, as if who's winning on Capitol Hill is more
important than the core issues, such as how the government manages cash and
the long-term viability of Social Security. However, the media going along
with bipartisan leadership in Washington, pretends that the $2.4 trillion is
already spent and therefore not part of the government's surplus.
Nonsense -- it means that money is locked into reducing the federal debt,
not locked into Social Security benefits. It becomes a surplus that is
*legislated*, whether we can afford it or not, whether or not it will be
good for the economy in the next decade... and it's based on the assumption
that we have another 10 years of economic expansion, which seems doubtful
now.
And if you are surprised to hear that it's not really bankrupt, but running
a surplus, take a look at the numbers in
http://www.ssa.gov/statistics/fast_facts/2000/ff2000.pdf. You'll see that
for '99 and last year, the surpluses are well over $100 billion a year.
Of course, if the same reporters who made such a big deal over the potential
embarrassment to one party or the other were to explain that, oh, by the
way, this really doesn't matter... well, that would probably make them look
just as foolish as they really are. Or as greedy as their corporations are,
hyping political polarizations to sell advertising, although unintentionally
for the most part. Of course, they have "experts" -- mostly at the Heritage
Foundation and the Cato Institute -- who will declare that Social Security
is bankrupt now, to make all this seem legitimate. I believe that this is
media incompetence for failing to recognize that this is actually an effort
to convince the public that privatization of Social Security is essential
because the government is doing such a seemingly bad job of managing it.
And I seriously doubt if big media will touch that angle.
Nick
