tag:blogger.com,1999:blog-2222630007427380394.post1673361243507402700..comments2023-12-20T04:18:41.617-06:00Comments on The Hunting of the Snark: You Get What You Pay ForSusan of Texashttp://www.blogger.com/profile/00076915322771385454noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-2222630007427380394.post-42823475740752774172010-09-14T08:38:46.689-05:002010-09-14T08:38:46.689-05:00Thanks for the information Bruce Webb, and thanks ...Thanks for the information Bruce Webb, and thanks to everyone for the appreciation.Susan of Texashttps://www.blogger.com/profile/00076915322771385454noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-68969675209269749812010-09-13T22:23:46.784-05:002010-09-13T22:23:46.784-05:00"the old and sick are already luckier than th..."the old and sick are already luckier than the young and healthy"<br /><br />I think this was the first McArdle piece I ever saw, when Sadly, No ripped it apart. I remember reading her full piece, trying to discern any sort coherence beneath her blunderbuss, shit-on-the-wall-let's-see-what-sticks approach. Even the most charitable interpretation was: patently ridiculous argument, following by a relentless stream of other crappy arguments, in a flailing attempt to confuse, distract, or simply wear down the reader. Little did I know then that McArdle could sink to such depths so often, and inspire an cottage industry of blogs devoted to ripping her apart with style and relish. <br /><br />Good times.Batocchiohttps://www.blogger.com/profile/02193752396025012825noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-46116443482463797112010-09-13T22:19:44.610-05:002010-09-13T22:19:44.610-05:00Wow, I was thinking of posting on this one, but wh...Wow, I was thinking of posting on this one, but why bother now? As I wrote at the other post, even if McMegan had been correct about the math, her point was irrelevant – the hypocrisy charge (the main point of the chart) was still directly on target.<br /><br />As noted upthread, the top marginal rate has topped <a href="http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates.5B21.5D" rel="nofollow">90%</a> in the United States, and funny, the economy was still robust. McMegan's fairly efficient in her bullshit there – first she changes 39.5% to 60-65% (not showing her work of course), and then pretends that a top <i>marginal</i> rate is the <i>effective</i> tax rate. What about the famous example from Warren Buffet, that he paid a lower effective tax rate than his secretary? Oh, and of course paying "the government" never benefits an individual in any way, at any point. (Funny how Social Security completely refutes that, huh?) <br /><br />And hey, Bruce Webb, thanks especially for that 'Public Debt' and 'Debt Held by the Public' bit.Batocchiohttps://www.blogger.com/profile/02193752396025012825noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-45985255577956150222010-09-13T06:11:38.813-05:002010-09-13T06:11:38.813-05:00It is just too easy picking on poor Ms. McArdle. W...It is just too easy picking on poor Ms. McArdle. Why isn't anyone picking on this guy? http://www.forbes.com/2009/05/14/taxes-social-security-opinions-columnists-medicare.htmlnanutenoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-73519123750266278082010-09-12T17:06:56.709-05:002010-09-12T17:06:56.709-05:00This is one of those cases when the fallacy of ad ...This is one of those cases when the fallacy of ad hominem fails. While I lack the economic literacy to understand the issues being debated, I know Megan well enough to know she is wrong and/or lying, and that's sufficient info in this case. <br />People like Krugman and Surowieki can take complex issues and make them comprehensible to the layman because they actually comprehend those issues. Megan has an agenda and the ability to parrot jargon, but not comprehension. I think it gives her too much credit to say she's being willfully obtuse on occasions such as these. She genuinely doesn't understand what she's talking about, she just clings to her own poor restatement of the summary of whatever position paper she's parroting. She reminds me of Bush at times like this, and how when he talked slowly and condescendingly you knew he didn't understand what he was saying, but thought repeating what someone smarter told him to say proved something.bradhttps://www.blogger.com/profile/06907349163323395529noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-83887793522696050812010-09-12T14:01:55.389-05:002010-09-12T14:01:55.389-05:00Thank you, Bruce Webb! I have bookmarked your blo...Thank you, Bruce Webb! I have bookmarked your blog.Kathyhttps://www.blogger.com/profile/03176801494652946278noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-12679131868714809282010-09-12T13:48:21.551-05:002010-09-12T13:48:21.551-05:00If her employers think she's a liability, she&...If her employers think she's a liability, she'll be dumbt. I mean dumped. Alas, she'll quickly find another sinecure; she's shown her eagerness to state <i>any lie</i> she's instructed to tell, and to doggedly insist the lie is truth no matter who corrects her, and for a very long time. That's a valuable trait/ability.<br /><br />The Center's report was clear and easy to understand. It would be easy to take the numbers and say "Hey, lets just apply the tax-cuts to Social Security!" but I doubt many people thought that the Center was suggesting that, or believe its a solution to the decades-away-possible-shortfall.Kathyhttps://www.blogger.com/profile/03176801494652946278noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-77869887399388480272010-09-12T13:48:06.081-05:002010-09-12T13:48:06.081-05:00Whew! Thank you Bruce Webb! That was fascinating. ...Whew! Thank you Bruce Webb! That was fascinating. Also, I'd like to lead another round of quiet internet applause for Susan of Texas whose sterling work makes all this snark possible. Thank you Susan!<br /><br />aimaiaimaihttps://www.blogger.com/profile/03956073425680585780noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-49927986333481382332010-09-12T12:55:14.867-05:002010-09-12T12:55:14.867-05:00One more and then I go away. Promise.
SYZ: "...One more and then I go away. Promise.<br /><br />SYZ: "However, Congress likes to dip into the Trust Fund to pay other obligations. They remove the cash and replace it with government bonds."<br /><br />Congress has no choice. Under the Social Security Act of 1935 any surplus funds have to be placed in "securities fully guaranteed as to principal and interest by the Federal government". That is even if Social Security had some physical ability to pile up Benjamins in a warehouse in Bethesda or the desire to set up a $2.6 trillion Christmas Account at the local credit union current law would prevent them.<br /><br />In some ways the Special Treasuries in the Trust Fund are better than either cash dollars or regular Treasuries. First they earn interest at the average rate of the latter while being fully callable at par like the former. For example in 2009 Social Security found it necessary to redeem a bunch of bonds in the DI Trust Fund with 2010 maturities. And unlike a holder of regular Treasuries in the same position (hi Chinese Central banker!) was fully sheltered from price fluctuations in the public markets in doing so. What McMegan McAddled sees as a weakness in Special Treasuries, that is the fact that they are not marketable, is actually a value shelter, they will always be worth precisely their face value and will yield precisely the interest rate under which they were issued. Try that with your regular bond portfolio.<br /><br />See ya later. And Susan keep reading McM McA so I don't have too. Thanks for all your work.Bruce Webbhttps://www.blogger.com/profile/13222670342780912788noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-3899486266982842912010-09-12T12:32:14.739-05:002010-09-12T12:32:14.739-05:00Here is Krugman on the alleged Social Security cri...Here is Krugman on the alleged Social Security crisis:<br /><br />The bigger problem for those who want to see a crisis in Social Security’s future is this: if Social Security is just part of the federal budget, with no budget or trust fund of its own, then, well, it’s just part of the federal budget: there can’t be a Social Security crisis. All you can have is a general budget crisis. Rising Social Security benefit payments might be one reason for that crisis, but it’s hard to make the case that it will be central.<br /><br />But those who insist that we face a Social Security crisis want to have it both ways. Having invoked the concept of a unified budget to reject the existence of a trust fund, they refuse to accept the implications of that unified budget going forward. Instead, having changed the rules to make the trust fund meaningless, they want to change the rules back around 15 years from now: today, when the payroll tax takes in more revenue than SS benefits, they say that’s meaningless, but when – in 2018 or later – benefits start to exceed the payroll tax, why, that’s a crisis. Huh?<br /><br />http://krugman.blogs.nytimes.com/2008/03/28/about-the-social-security-trust-fund/Syznoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-35413592668215394762010-09-12T12:31:52.074-05:002010-09-12T12:31:52.074-05:00And on Susan's point.
In the end Full Faith a...And on Susan's point.<br /><br />In the end Full Faith and Credit of the U.S. doesn't rest on Congress at all, not until or unless they simply abolish popular democracy altogether. The question of whether a Special Treasury in the Trust Fund is 'real' is the same question that applies to that Benjamin in your wallet (these days more likely a couple of Washingtons and a tattered Lincoln, but I digress). The powers of Congress and the Federal Government are in theory almost limitless. For example they can and have made the holding of gold bullion by Americans illegal and then reversed that decision. Under precedent set by Kelo v New London they can take your house and give it to Donald Trump to build a new casino. Or the Administration could conspire with the Fed to hyper-inflate the dollar. And Paultards spend nights sleepless worrying about all three.<br /><br /> The only final restraint on any of that is the ballot box, Social Security is just as real or as unreal as the political will of the American political majority. And efforts like those of McMegan to cast doubt on Full Faith and Credit are edging pretty close to sedition. (Good thing for her that we still have that First Amendment thingy going, in other times and places similar efforts at undermining faith in the government might find you being a number in some labor camp in Siberia or Xinxiang.)Bruce Webbhttps://www.blogger.com/profile/13222670342780912788noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-73489318181385097982010-09-12T12:23:15.281-05:002010-09-12T12:23:15.281-05:00Bruce, thank you. I am now well armed, should it ...Bruce, thank you. I am now well armed, should it ever come up again.Lurking Canadiannoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-24019265479003163972010-09-12T12:15:32.518-05:002010-09-12T12:15:32.518-05:00Lurking on your second post.
In FY 2000 both the ...Lurking on your second post.<br /><br />In FY 2000 both the General Fund and Social Security ran cash surpluses, in your terms X > A AND Y > B. But via a weird twist in those circumstances 'debt' and 'deficit' can and did move in opposite directions. As it happened the increase in Intragovernmental Holdings via the SS surplus was a little bit more than the reduction in Debt Held by Public so even though our positions in the bond market improved markedly (which is basically what the 'unified deficit/surplus' tracks) total Public Debt as scored on the Debt Clock still continued to tick up.<br /><br />(BTW if I ever find the genius who decided to make both 'Public Debt' and 'Debt Held by the Public' into technical terms of art pointing at two different things with two different totals there might be violence. Because business reporters and even top flight economists tend to use the terms interchangeably and it results in exactly the kind of confusion seen here.)Bruce Webbhttps://www.blogger.com/profile/13222670342780912788noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-65485260899920462982010-09-12T12:07:01.678-05:002010-09-12T12:07:01.678-05:00Lurking there is an entire cottage industry devote...Lurking there is an entire cottage industry devoted to arguing that the Special Treasuries in the SS Trust Funds are somehow less real than regular Treasuries. This is legal, historical and practical bullshit. The SS Trust Funds were cash flow negative more years than not from 1957 to 1982 and persistently so from 1971 as the Treasury simply honored the bonds in the TF right down to the next to the last dollar. Similarly the DI (Disability) Trust Fund (the smaller of the two that make up 'THE' SS Trust Fund) started drawing on its interest in 2006 and its principal in 2009 as Treasury simply recognized its legal obligation. Neither the 2006 or 2009 bend points caused a single ripple in the bond markets which by all evidence don't see the kind of default McAddled suggests as even possible in light of current law and past historical practice. DI is on track to cashing in $23 billion of those 'phony IOUs' this year, more than 10% of its total accumulated assets, and it all adds up to a non-event: treasury bonds mature, get paid off or rolled over. Nothing changes whether the holder of those bonds is the Managing Trustee of Social Security (whose other hat is Treasury Secretary) or the head of the Chinese Central Bank. Full Faith and Credit of the U.S. backs both equally.<br /><br />And to answer your last question. The Bureau of Public Debt uses the following equation:<br />Debt Held by the Public + Intragovernmental Holdings (mostly the Trust Funds) = Public Debt. So yes the $13 trillion figure for the latter does include $4.5 tn in Intragovernmental Holdings of which $2.6 trillion are in the two Social Security Trust Funds.Bruce Webbhttps://www.blogger.com/profile/13222670342780912788noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-43156177733854998462010-09-12T12:02:24.297-05:002010-09-12T12:02:24.297-05:00Well, here's the part I don't understand. ...Well, here's the part I don't understand. Let's take a historical example: the Clinton balanced budget. The government is taking in X dollars in social security taxes and Y dollars in other taxes, while paying out A dollars in social security/Medicare payments and B dollars for everything else.<br /><br />I get the impression that what happened was X+Y=A+B, so they said the budget was balanced. But that is misleading, because what really happened was that the "everything else" budget had a (B-Y) shortfall, which was covered by loans of (X-A) made by the social security program. As I understand it, though, those (X-A) in loans don't count as "national debt", which is why Clinton got to claim the budget was balanced.<br /><br />Of course all of this is orthogonal to the real questions of whether the government should keep paying SS benefits (yes) and levy other taxes to pay for them if necessary (also, yes), but it does look very much to me like the money was essentially stolen by some shady accounting. Maybe my understanding is wrong. That's why I need the crayon version. :)Lurking Canadiannoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-26697976802717976862010-09-12T11:41:29.758-05:002010-09-12T11:41:29.758-05:00The whole argument is so dishonest and divorced fr...The whole argument is so dishonest and divorced from reality. <br /><br />You can always count on McArdle to leave the reader confused. I think she's saying that if we pretend the Social Security Trust fund is part of the general fund, she's right. Wikipedia says that if the government raises spending because they can and do use SS funds, it's an accounting fiction like McArdle says. If they don't, it's real. Since she also says that the government (actually, Congress; the president can't repudiate the bonds) might just refuse to pay out the funds, it's not too surprising that she chooses to believe the fund is an accounting fiction.Susan of Texashttps://www.blogger.com/profile/00076915322771385454noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-51465749109848382152010-09-12T10:14:00.588-05:002010-09-12T10:14:00.588-05:00I don't see what the problem is with high earn...I don't see what the problem is with high earners " going galt" because they don't want to work so hard if their top marginal rate goes up. I mean--take dentists (since they appeared in earlier debates as examples of frequently right wing/anti taxers). Say my dentist goes on strike and doesn't work as hard? Won't the free market just throw up dozens more Dentists who *are* willing to work as hard, or harder, to crack that top marginal rate ceiling? Or say a banker decides to go galt and stop overselling bonds to, say, San Diego? Is it in fact the case that some jumped up mailroom boy won't arise to take his place? 'Cause if there were a lot more holes at the top I'd scab those jobs.<br /><br />aimaiaimaihttps://www.blogger.com/profile/03956073425680585780noreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-58223502628438640692010-09-11T21:19:09.911-05:002010-09-11T21:19:09.911-05:00The Social Security program is designed to be self...The Social Security program is designed to be self-funded. Social Security taxes are collected and held in trust to pay benefits. However, Congress likes to dip into the Trust Fund to pay other obligations. They remove the cash and replace it with government bonds.<br /><br />Right wingers believe that since these bonds are both issued by and held by the government, they are some sort of "trick." In reality, it is no different than what corporations do internally, using "cost centers" and "accounting codes" to reallocate resources. The only way the Social Security bonds are worthless is if the US economy collapses.<br /><br />In addition, the revenue stream does not have to match the payments exactly. This is by design. In boom years, the trust fund carries a surplus and in poor economic times, it can dip. McMegan likes to pretend that because at the moment we are spending more than we are receiving, that Social Security has "defaulted." Of course, this is a complete misrepresentation of how the program works.Syznoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-86889084640967106172010-09-11T20:48:30.695-05:002010-09-11T20:48:30.695-05:00People like this odious creature make me sick. The...People like this odious creature make me sick. There are plenty of people just scraping by and Social Security is the difference between a roof over their head & living under a bridge. <br /><br />We are taught that if we work hard and are honest that the rest -- a good, decent life -- will happen by magic. Sometimes that does not happen. Sometimes illness derails those plans and only in America, of all developed nations, is the safety net deemed unnecessary because of the way it tilts in favor of the poor (ie, those most in need). <br /><br />We drive the same roads, walk the same sidewalks, drink the same water, breathe the same air. We are in this together. I realize that sort of statement sets off all sorts of warning bells amongst the fascists & psychopaths on the right, but there we are. (I would not at all object to their going Galt, preferably by leaving the country altogether, and preferably yesterday. I should also mention that I'm one of the many folks who will never subscribe to the formerly good Atlantic Mag as long as that cretinous fool is nominally employed by them.) <br /><br />Also -- Eisenhower taxed the rich and big business to the tune of 90-plus percent. (yes yes, it's hard to believe -- we taxed businesses back in those heady days.) He oversaw a period of unparalleled prosperity despite all the masters of the universe fleeing to Galt's Gulch. He also oversaw expansion to the existing framework of Social Security put in place by FDR. <br /><br />Every single time one of these silly fools mentions that a couple percentage points of further taxation to the already obscenely rich rich will somehow bring about Armageddon, I wish someone had the balls & basic knowledge to clue them into our history. <br /><br />Selfish horrors like McArdle refuse to understand that a nation already starved for funds needs more revenue not less. Every single non-partisan review of the Bush Tax Cuts I've seen has shown clearly their ruinous effect on our nation & on the disparity between the rich & the poor. <br /><br />People like McArdle clearly lack the necessary empathy to care whether another living creature lives or dies with dignity. She's sickening.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2222630007427380394.post-13198306902057167982010-09-11T19:37:51.498-05:002010-09-11T19:37:51.498-05:00If McArdle's goal is to sow confusion and chaf...If McArdle's goal is to sow confusion and chaff among her enemies, she has certainly succeeded at least with me.<br /><br />I know how present value works, so that part didn't confuse me, but I now feel like I need somebody to explain, with small words and charts drawn in crayon, what the Social Security Trust Fund is and whether or not it is real money. Is the government double counting the money or not? Do bonds issued by the Trust Fund count as US government debt or not? I'm just baffled by the whole thing.Lurking Canadiannoreply@blogger.com