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February 21, 2005

Why Oh Why Can't We Have a Better Press Corps? (Charles Krauthammer Edition)

Michael Kinsley once said that discovering Charles Krauthammer was one of his finest moments. God alone knows why.

PGL of Angry Bear has views:

PGL of Angry Bear: If there are Federal Reserve notes in your wallet, I’ll gladly buy you a cup of coffee if you give them to me. And why would he make this deal? Check this out:

Charles Krauthammer: What’s in Your Wallet?: 2042 is the fictional date for the fictional bankruptcy of a fictional trust fund. Let's start with basics. The Social Security system has no trust fund. No lock box. When you pay your payroll tax every year, the money is not converted into gold bars and shipped to some desert island, ready for retrieval when you turn 65. The system is pay-as-you-go. The money goes to support that year's Social Security recipients. What's left over is ``loaned'' to the federal Treasury. And gets entirely spent. It vanishes. In return, a piece of paper gets deposited in a vault.... These pieces of paper might be useful for rolling cigars. They will not fund your retirement...

If [Krauthammer] really believe piece of paper called financial assets are worth nothing, I’ll gladly take all of your cash, funds in your bank accounts, and other financial assets. In turn, I’ll even buy a week’s worth of groceries. Of course, this pay-as-you-go claim is based on the premise that President Reagan and Alan Greenspan lied to us in 1983. Back then, the stated reason for increasing the payroll tax rates was that we would be pre-funding the Social Security Trust Fund.... I prefer to believe that President was telling us the truth in 1983. But if Mr. Krauthammer and other fans of George W. Bush prefer to say that President Reagan lied to us – so be it...

As does Noam Scheiber:

Noam Scheiber: The New Republic Online: etc.: I don't understand Charles Krauthammer's column in Friday's Washington Post. Krauthammer spends the first two-thirds of the column arguing that the Social Security trust fund is a fiction... and then claim[s]:

...[E]very year we allow to go by means that the reduction in benefits or the increase in taxes will have to be larger. If we had started this in the fat years of the 1990s, we could have done it at reasonably low cost in benefit cuts and/or tax increases. We now have 13 years rather than 20 or so before the system starts bleeding red...

[T]he logic of preemptively defusing the Social Security crisis only makes sense if you believe in the Social Security trust fund, whose existence he just spent all that ink refuting.... Social Security is going to run a surplus every year between today and 2018. Those surpluses accumulate in the trust fund. The only thing you'd accomplish by cutting benefits or raising taxes today is to increase the size of... the trust fund. Now, if you believed in the trust fund, you'd agree that this additional money could be used beginning in 2018 to keep paying full benefits to all retirees. But Krauthammer doesn't believe in it...

As does Matthew Yglesias:

Matthew Yglesias: Conservatives for Gold!: Let's also note Krauthammer's commitment to the rightwing doctine of Currency Fictionalism.... By this standard, not only is my bond porfolio not real, my bank account isn't real, and, in fact, the cash in my pocket isn't real. The only 'real' money, apparently, is stacks of gold bars. Now once upon a time, your U.S. currency was redeemable for gold bars and, thus, one might consider it real. Alternatively, perhaps U.S. currency in the gold standard days was a 'mere I.O.U.' Either way, we've been off the gold standard for some time now, and people would be alarmed to learn that this means their money is fake. Does the Post pay Krauthammer in dubloons?

Posted by DeLong at February 21, 2005 03:05 PM