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December 26, 2004

Max Sawicky Writes Dialogue

Max Sawicky sits down in the grove of Academe and writes a dialogue. It's good, but there are no Greek names, alas:

MaxSpeak, You Listen!: SOCIAL SECURITY IS SIMPLE

Posted by DeLong at December 26, 2004 10:33 AM

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Comments

"SDP: They're just IOUs -- not worth anything.
"MR: So the Government should default on its debt to the Trust Fund and SS beneficiaries, after spending SS cash surpluses for years and years?"

Which would be a non-sequitur. It should be:

MR: So, (pace Krugman in 'Fuzzy Math') it's a waste of time and effort to take money out of our left pocket to put it into our right pocket.

Posted by: Patrick R. Sullivan at December 27, 2004 06:52 AM


Patrick, I think that Max addresses your argument as follows:

Fourth Deluded Person: The program is bankrupt, and the Trust Fund is a delusion.
MR: If the Trust Fund is a delusion, the program depends on general revenues and cannot be bankrupt unless the USG somehow loses its sovereign power to tax. Back to Palookaville for you.

Unless, that is, you just meant that the government shouldn't make transfer payments at all, or at least not transfer payments in which the same people pay taxes and receive benefits: a valid philosophical/political position (though I don't agree), but one that few supporters of Bush's current plan hold.

Posted by: Julian Elson at December 27, 2004 01:29 PM


Patrick R. Sullivan,

Please state if and why the federal government is obligated to honor its debt in the coming decades to private party claimants and if and why the federal government is obligated to honor its debt in the coming decades to social security claimants.

Posted by: CMike at December 27, 2004 02:12 PM


CMike--

Don't bother. Patrick R. Sullivan's MO is to:

1. post bizarre statements, the premise of which necessarily requires the Full Faith and Credit of the USG to be worthless, then

2. fly off to the next SS posting and start over again.

It ain't worth your time.

Posted by: Julian Apostate at December 27, 2004 02:39 PM


"Please state if and why the federal government is obligated to honor its debt in the coming decades to private party claimants..."

If it wants to keep borrowing it must.

"...and if and why the federal government is obligated to honor its debt in the coming decades to social security claimants."

It doesn't have any debt to Social Security claimants (as the U.S. Supreme Court, has noted). It has debt to ITSELF, and paying it is merely transfering money from one account to another--as Krugman once understood.

The existence of the trust fund will not in the least impact the government's decision to cut benefits, raise taxes, or borrow, when the day of reckoning comes. Not a whit.

Posted by: Patrick R. Sullivan at December 27, 2004 05:15 PM


"Don't bother. Patrick R. Sullivan's MO is to:

"1. post bizarre statements..."

Which are merely paraphrases of the U.S. Treasury's official statements. Or do you consider, say, Larry Summers to have posted bizarre statements?

Posted by: Patrick R. Sullivan at December 27, 2004 05:23 PM


Patrick R. Sullivan,

For what purpose has social security run a surplus for the last twenty years and for what purpose will it run a surplus for another ten or more years?

Posted by: CMike at December 27, 2004 06:26 PM


Again, Patrick, please describe this apocalyptic "day of reckoning" that you're so concerned about. The fact that you've mastered basic accounting identities is indeed impressive, but you have yet to explain why it applies to the practical discussion about Social Security. How do you see this shaking out?

Let me get you started : round about 2027, the USG defaults on the issues held by the Trust Fund, and then... (the part you fill in deals with how such a move would be even remotely politically feasible, and why SS continues to be your prime concern in such an atmosphere).

Posted by: Julian Apostate at December 28, 2004 10:19 AM