August 9, 2011
A PolitiFact Social Security Stretch
One can only wonder whether the Providence Journal's PolitiFact team reads their own newspaper. The other day, they did what they love most to do (whacking Republican candidates) and graded Senatorial candidate Barry Hinckley "false" for saying that "there's no money in Social Security." Theirs is not a new argument — it's one that partisan Democrats have been making for years:
Those who say the fund has no money, or that it has nothing more than a bunch of IOUs from the federal government, are referring to the fact that Social Security doesn't have $2.5 trillion in cash sitting in a vault somewhere. The federal government has loaned the money to itself, using the cash to pay for other expenses.But these aren't IOUs, which generate no interest. The loan is in the form of special-issue Treasury bonds that earned $117.5 billion in interest in 2010, according to the latest trust fund report.
The reader suspects from PolitiFact's stretched analogy that the Hinckley's point is being deliberately missed:
So maybe a better analogy would be: Saying that Social Security has no money is akin to saying that you're broke if you have 20 cents in your pocket but $20 million in the stock of a heavily leveraged company.
Only if you are the sole proprietor of that company and the company itself is broke. I could draw up papers from Anchor Rising promising me a million dollar bonus, but that doesn't make me a millionaire. Even more: Currently, the government can only pay itself the Social Security IOUs because it borrows almost half of every dollar it spends, making the system not unlike a Ponzi scheme.
Indeed, the folks at PolitiFact should have read this Q&A-style article, which the Providence Journal ran on the first page of its Nation section on July 29:
Q: What about the Social Security Trust Fund? Can't that be used to pay Social Security benefits?A: No. The government will continue to collect Social Security taxes, but the taxes flow in across the month, while the checks go out at the beginning of the month. Normally, the Treasury advances money to Social Security at the start of each month to pay that month's checks, then gets repaid as the tax money comes in. But the Treasury can't make that advance if it doesn't have cash. And while the Social Security Trust Fund has more than $2.5 trillion in assets, that money is invested in U.S. government securities. Usually, that's a good thing because U.S. government securities are considered the world's safest investment. In this case, it's a problem because if the government doesn't have money, it can't cash in the securities.
It's too bad Hinckley didn't think to cite that article as a source. It would have been amusing to see PolitiFact take it on.
I am I wrong to suggest that when candidates and politicians make these comments, they should be ready to back them up? I know they can't predict every question and I know PolitiFarce is bent, but that topic being as hotly debated as it is, maybe he should have been ready to be challenged.
Posted by: Max Diesel at August 9, 2011 9:17 AMOne thing I don't understand (tangentially) is that if the US Government is borrowing from the Social Security fund, why are they paying interest? Wouldn't it be a lot cheaper for all of us if they/we didn't pay interest on that money? Isn't that a big area of savings if there are billions in interest payments?
That part made no sense to me. This is just swapping money from the left pocket to the right pocket.
Posted by: Patrick at August 9, 2011 9:30 AMPolitiFact routinely ignores facts that stand in the way of their biased opinions. If Mr. Hinckley had made reference to the article mentioned, they would have simply ignored the reference and tagged his assertion as false anyway.
They are not very good at hiding their bias.
Posted by: John at August 9, 2011 10:06 AM"The loan is in the form of special-issue Treasury bonds that earned $117.5 billion in interest in 2010, according to the latest trust fund report."
But that still isn't money. A loan is very much NOT money.
Hinckley's statement, therefore, is true.
Ditto what John said about bias here. They are working to protect their preferred candidate, the junior senator from Rhode Island, by severely twisting the truth.
(Good catch with that Q&A article, Justin. Apparently, PolitiFarce does not read their host newspaper.)
Most of these "false" determinations for conservative candidates would be resolved by simply giving them the benefit of the doubt. Most of them just come down to different interpretations or arguing semantics. Of course admitting that would acknowledge the uselessness of Politifact in the first place.
Posted by: Dan at August 9, 2011 1:55 PMQuick, Justin, run to the bank! Despite their promises that they "have your money," I've recently discovered that it's not actually stacked up in the vault. They have these IOUs called T-bills and stock shares instead.
You've been swindled!
Posted by: Russ at August 9, 2011 3:37 PMQuick, Justin, run to the bank! Despite their promises that they "have your money," I've recently discovered that it's not actually stacked up in the vault. They have these IOUs called T-bills and stock shares instead.
You've been swindled!
Posted by Russ at August 9, 2011 3:37 PM
Russ is an A-Hole who lives off the taxpayers. I can't wait for the day you lose your pension when the money runs out.
Hey, Justin, that comment above is the kind of open debate I should expect over here? I have to assume you approve.
Posted by: Russ at August 10, 2011 11:18 AMI don't approve, but I'm not sure that it quite achieves violation of our policy, and your own comment wasn't such that I've been motivated to break my extremely busy schedule to ponder it.
Posted by: Justin Katz at August 10, 2011 12:19 PMWhat a shock, that this kind of attack isn't a violation of the policy. fwiw, that wouldn't fly over at RIF (granted it's not something likely to get someone banned either unless it became a habit)...
www.rifuture.org/about-ri-future
Well, when I suggest the brownshirts over here are allowed, even encouraged to put down dissent that's what I'm talking about. The comment is not even accurate as anyone with half a brain and a search engine could confirm.
Posted by: Russ at August 10, 2011 4:20 PMPut your big boy pants on Russ and stop whining. All you do is trot over here and talk down your elitist nose with your snide remarks. So you got a little stinger. Grow up.
Posted by: Max Diesel at August 10, 2011 8:59 PMI'm not losing any sleep over it, but let me add.... "Oooh! That's very... that's very enlightened of you - very enlightened of you. Shows that your cognitive capacity is superior to most." Hypocrits!