Atlas Shrugged: The Mocking

Thursday, September 2, 2010


Megan McArdle is actually trying to argue that the Social Security Fund doesn't exist because--I don't know, maybe the government will say, "Just kidding!" and keep all the money.

McMegan 1 day ago in reply to boomaze

There's no evidence that public debt markets treat the social security bonds the way they treat debt held by the public, so in fact, they almost certainly could default without anyone much caring. But they don't have to. There's no mandate that the SSA spend the money on payments; they could slash payments right now, the SSA would technically continue to get its interest and lend it back to the government, and everything would be copacetic. Technically, anyway.

boomaze 1 day ago in reply to McMegan

The bonds are obligations of the treasury backed by the full faith and credit of the government. To not pay them is a default on its debt by a sovereign nation, which would be a disaster. Greenspan and others have gone before congress explicitly stating they are bonds like all others. This

"they almost certainly could default without anyone much caring. "

is completely false. 100% false. The opposite of reality.

Bush started a lot of this lying about the fund (actually, I think he probably just didn't understand it) to push for privatization.

Now, you are correct they could simply cut benefits so SS never needs those bonds. However, you can't even be involved in any real discussion about SS or and reform if you don't understand those bonds will be paid.

boomaze 1 day ago in reply to boomaze

Let me rephrase. They are not bonds "like all others" in the sense that they can't be sold as value to anybody else, but they still have the same backing and value.

When someone is this consistently wrong for years upon years, you have to assume that the Atlantic is deliberately foisting an ideologically blind hack on us as a favor to their corporate benefactors. Ta-Nehisi Coates is the loss leader. McArdle is the cash cow.

1 comment:

Syz said...

Before social security, the vast majority of the our elderly lived in poverty. Under Social Security, most Americans now have a comfortable retirement.

Social Security is self-funded, deficit neutral [except when Congress raids the trust fund] and extremely popular.

In short, Social Security is the type of government program that makes doctrinaire libertarians like McMegan look very foolish. It's very existence is an affront to Megan's character. So of course she needs to do everything she can to tear it down. Her criticism is not driven by economics, but ideology.