Regular readers of BTP know that the Washington Post editorial board occasionally just makes up numbers to advance its arguments. For example, last year it told readers that Mexico's GDP had quadrupled since 1988 when it was trying to argue that NAFTA was great success. (It had actually grown 83 percent.) Well the Post editorial board is at it again. Today it told readers that "the [budget] crunch actually begins much sooner than that -- in 2011, when Social Security's cash flow turns negative, because of the first wave of baby-boom retirements." This not true, the Social Security Trustees report projects that income from designated Social Security taxes (not counting interest on its government bonds) is projected to exceed benefits until 2017. The Post just pulled 2011 out of the air to try to scare readers. Of course, the year when benefits first exceeds tax revenue makes no difference for either SS or the overall budget anyhow. Under the law, SS is financed by a designated tax. The surplus over the last quarter century has been used to acquire more than $2.4 trillion in government bonds. According to the SS trustees, the bonds held by the trust fund will be sufficient to keep the program fully solvent until 2042. According to the non-partisan Congressional Budget Office, the program will be fully solvent until 2049. Both dates are far enough out that reasonable people need not panic, we have dealt with far more imminent SS shortfalls. As far as the federal budget, the stress is first felt when the annual surplus of revenue over spending begins to decline. We're already pretty much there, as the recession and jump in inflation virtually guarantees that the 2009 surplus will be smaller than the 2008 surplus. Of course this is not that big an item in the federal budget, which is why the Post and no one else bothered to notice it. The next sentence in the Post article is the highlight: "According to the GAO, the federal budget deficit -- projected at more than 3 percent of GDP next year -- is on a path to exceed 20 percent of GDP by 2050, unless we enact substantial reforms to our tax structure and entitlement programs." Actually, if we just had a health care system that was as efficient as the health care system in Canada, Germany, England, France or any other wealthy country, we would not have to make any other fundamental changes to the "tax structure or entitlement programs." We have a health care problem, not a budget problem. The Post obviously has an agenda to cut SS and Medicare and they are willing to mislead their readers to advance this agenda, just as they were willing to mislead readers to make the case for NAFTA.
--Dean Baker
