The Washington Post published a sensational story last Sunday that claimed that Social Security is already broke. “Adding billions to US budget woes,” the headline read. Instead of piling up surpluses, as the Social Security trust fund has done for nearly thirty years, this year the system became “cash negative.” Social Security, the Post warned, “is sucking money out of the Treasury.”
This is alarming news, if true. Fortunately, it is not true. The Post committed what I call fact-filled mendacity—a pejorative mash of scary buzz words and opaque statistics that encourages readers to reach false conclusions. The newspaper’s obvious objective is goosing the so-called supercommittee whose Congressional members seem to be reluctant about whacking Social Security benefits. The formerly liberal Washington Post has long urged that as a solution to federal debt and deficits. Its ideological posture influences its reporting and also what “informed observers” think. Last night, I heard a TV anchor remark in passing, “We just read that Social Security is in the red.”
Baloney. The truth—if truth is still relevant to Washington politics—is that Social Security has never contributed a dime to the federal budget deficits. Therefore, cutting Social Security for the elderly will do nothing to relieve the deficit problem. Senate majority leader Harry Reid has made this point, so has President Obama. Not true, the Post story flatly declares.
In fact, Social Security has piled up enormous surpluses—now $2.7 trillion—which the federal government has borrowed and spent on other things, wars or highways or corporate tax breaks.
The nation’s largest creditor is not China. It is the working people of America and their employers who collectively have amassed Social Security’s huge surplus through the weekly FICA contributions required by law. This wealth is the nest egg that will pay for swelling benefits as the baby-boom generation retires. Far from being broke or “sucking” billions from the Treasury, the Social Security trust fund will continue to accumulate larger and larger surpluses during the next ten years, reaching $3.7 trillion by 2022, according to the system’s trustees.
The Post managed to concoct an opposite version by ignoring such fundamental facts and by distorting others. This has been typical of major media. Reporters and pundits mindlessly repeat the establishment propaganda that turns reality upside down. Social Security is not a source of the deficits, as you have read so many times, but a giant savings program that actually helps offset the effects of the government’s red ink. Editors or reporters are too lazy (or dim-witted) to dig into the accounting complexities and discover that elite wisdom is bogus.