Chicago Boyz

What Are Chicago Boyz Readers Reading?

Recommended Photo Store
Buy Through Our Amazon Link or Banner to Support This Blog
  •   Enter your email to be notified of new posts:
  •   Problem? Question?
  •   Contact Authors:

  • CB Twitter Feed
  • Lex's Tweets
  • Jonathan's Tweets
  • Blog Posts (RSS 2.0)
  • Blog Posts (Atom 0.3)
  • Incoming Links
  • Recent Comments

    • Loading...
  • Authors

  • Notable Discussions

  • Recent Posts

  • Blogroll

  • Categories

  • Archives

  • The Economist Publishes a Monstrous Lie

    Posted by TM Lutas on September 13th, 2011 (All posts by )

    Gov. Rick Perry has famously called Social Security a ponzi scheme, a monstrous lie. The Economist magazine, in covering the story has now told its own monstrous lie. It is lying via a graph it included with the story.

    Deceptive Social Security finance graph from the Economist

    SS fantasy finances, Economist version

    The legally mandated 2011 Social Security Trustee Report lays out the actual fund exhaustion date as 2023 on page 3 of the report. So, 2023, 2037, what’s the difference? Electorally, it’s a very big deal. If you’re a current beneficiary today at age 66, you would be 78 in 2023, right at the edge of your life expectancy but more likely than not you would be alive. You would be 92 in 2037 and more than likely dead. If a senior is going to be alive when the big Social Security benefit cut kicks in, it is within their planning window and consequently the chances that they will be a Perry voter go up. Up to now, attempts at reforming Social Security were done so early that the crisis was only going to affect somebody else. Now, every senior who grasps when the crisis will hit knows it will hit them when they are going to be older, weaker, and even more unemployable than they are now. By putting out a pretty, lying graph, the Economist gives ammunition to the left-leaning mass media to write their own stories that also minimize the number of seniors who grasp the truth.

    In short, the Economist is putting false numbers out there, ones that will have an effect of lulling seniors into a poorer financial state right when they will be old and frail and unable to do anything about it. What happened to their editors, their fact checkers, their sense of decency? Is everybody to be sacrificed for the electoral convenience of US Democrats in the 2012?


    12 Responses to “The Economist Publishes a Monstrous Lie”

    1. tomw Says:

      I don’t know how the “2011 Social Security Trustee Report” can be so accurate so far out into the future. They thought [predicted?] that there would be a net surplus of funds coming into the trust over funds being paid out. History was not kind to their prospectus. The fund started paying out more than it took in last year{this year?} instead of years out into the future.
      I took the Economist article as a ‘good’ thing because it points out that, contrary to Democrat claims, Social Security is NOT sound ‘for years into the future’ as Senator Reid declared.
      It is broken, I knew that in 1966 when I first understood what it was and how it was funded.
      So, what difference does it make because anyone who plans on having income from SocSec is perhaps ‘wishing upon a star…’, and if you care about your younger siblings, or descendants, you will realize that it needs to be modified ASAP.

    2. John Wolfsberger, Jr. Says:

      “Is everybody to be sacrificed for the electoral convenience of US Democrats in the 2012?”

      This is a rhetorical question, right?

    3. TM Lutas Says:

      Tomw – You go with what you’ve got. This is why the Congress demanded that the trustees keep publishing one of these reports every year.

      But there’s a trend to the Trust Fund report mistakes. They have been consistently too optimistic about revenues. We were originally supposed to stay cash flow positive up to 2017. The reality is that we went negative in 2010. That’s seven years earlier. Now they say that we’re going to go bust in 2023 but the extension of the payroll tax cut is likely to render the 2023 date inaccurate too.

      To resurrect a political saying from the Nixon administration, the Economist article is a “modified, limited hangout”. In other words, it’s the least possible truth that the tellers think that they can get away with. I agree that in contrast with Reid’s statement it is an improvement. But that’s a far cry from being “good” in my book.

      John Wolfsberger, Jr. – What will we do for a second party when the Democrats have entirely exhausted their credibility?

    4. John Wolfsberger, Jr. Says:


      “What will we do for a second party when the Democrats have entirely exhausted their credibility?”

      You mean they still have some?!

      In all seriousness, after the Democrats reduce themselves to a tiny rump party (that will linger on as a cautionary reminder like a case of genital herpes), I strongly suspect that Conservatism will fracture into two major parties, one representing/embodying the Traditional inclination of Conservatism, and the other representing/embodying the Libertarian inclination. The actual process will likely revolve around a massive fight on policy within the Republican Party. Whichever side wins will keep the Republican brand, the other will create a new party (Republican Libertarian? Traditional Republican?). I’ll also predict that the split will occur as a result of something no one will see coming (e.g., not an issue like abortion, limiting government or fiscal responsibility), and that it will most likely involve foreign policy (e.g. a foreign intervention).

    5. Andrew_M_Garland Says:

      There is nothing real in the Social Security “trust fund” (or in any US government “trust fund”). There is only a political promise to find the money somewhere that was paid in and already spent. The shortfall in Social Security is about $15 trillion in today’s dollars, about equal to the entire yearly income of everyone in the US. That shortfall is above future collections of Social Security tax at current rates. That promise is much more than what is recorded in the trust fund, which is itself only an unfunded promise.

      US Treasury Trust Funds are only an accounting record of what was collected and then immediately spent for things other than Social Security.

      The Congressional Budget Office (CB0) in 2003:
      === ===
      Trust fund holdings are not assets of the government and do not represent money owed to program recipients individually. Payments to Social Security recipients (like other social insurance programs) are based on rules set by law unrelated to trust fund holdings.
      === ===

      Ponzy Schemes Like Social Security

      Social Security is a direct-pay program. Amounts collected this year are all paid out, either to recipients or to government programs. Social Security is already in deficit; it is collecting less than it pays out, and the remainder comes from general tax reveue or from current borrowing.

      Here is an XTraNormal video (2:12) which presents the facts about the Social Security Trust Fund:
      Government Accounting

    6. TM Lutas Says:

      Andrew_M_Garland – You are almost correct but for one thing. Under current law, when the notional trust fund runs to zero, the payouts are reduced to the program’s income. There is no other provision under current law, so far as I know, that reduces payments without requiring any further legislative action. In that sense, the sums recorded as being “in” the trust fund do have a real world meaning and value.

    7. Andrew_M_Garland Says:

      To TM Lutas,

      Yes, the trust fund amount is a pre-authorized spending authority. Congress has agreed to pay SSec claims in excess of FICA tax revenues, up to the cumulative amount of the trust fund total. And, that spending is already included within the debt limit, so it is entirely on automatic.

      Congress can change this at any time, regardless of the trust fund total. If there is a US debt crisis (no more borrowing) then the only source for maintaining SSec payments will be a doubling of SSec taxes, or of course, taxing the rich.

    8. Alan K. Henderson Says:

      “Is everybody to be sacrificed for the electoral convenience of US Democrats in the 2012?”

      I sure hope Obama isn’t a secret Aztec.

    9. ErisGuy Says:

      Okay, this is where punctuation helps:

      Does “Gov. Rick Perry has famously called Social Security a ponzi scheme, a monstrous lie” mean Perry has told a monstrous lie (huh?) or the social security is a monstrous lie (true).

    10. TMLutas Says:

      ErisGuy – I apologize. I was too lazy to confirm that he said it was “a ponzi scheme, a monstrous lie” though that’s how I remember it being said. When that happens, I usually just drop the quotes, leading to the ambiguity you point out. If you’re more industrious, I’d be glad to rework it with the proper quote in the lead sentence.

    11. ErisGuy Says:

      No changes necessary. You assumed your readers would be familiar with the latest debates. I might have been had I not been travelling, so I was confused. Thanks.

    12. Helen Says:

      Two interesting things about the Economist. One is that it is far more highly regarded outside Britain than in the country. Now, that could be the usual one about prophets not being prophets in their own country; or it could be that we have a clearer idea about it.

      The second point is that on the few occasions I have read it I found that any article about any subject I knew about was completely wrong and misleading. The assumption has to be that the same applies to articles on subjects I do not know much about.

    Leave a Reply

    Comments Policy:  By commenting here you acknowledge that you have read the Chicago Boyz blog Comments Policy, which is posted under the comment entry box below, and agree to its terms.

    A real-time preview of your comment will appear under the comment entry box below.

    Comments Policy

    Chicago Boyz values reader contributions and invites you to comment as long as you accept a few stipulations:

    1) Chicago Boyz authors tend to share a broad outlook on issues but there is no party or company line. Each of us decides what to write and how to respond to comments on his own posts. Occasionally one or another of us will delete a comment as off-topic, excessively rude or otherwise unproductive. You may think that we deleted your comment unjustly, and you may be right, but it is usually best if you can accept it and move on.

    2) If you post a comment and it doesn't show up it was probably blocked by our spam filter. We batch-delete spam comments, typically in the morning. If you email us promptly at we may be able to retrieve and publish your comment.

    3) You may use common HTML tags (italic, bold, etc.). Please use the "href" tag to post long URLs. The spam filter tends to block comments that contain multiple URLs. If you want to post multiple URLs you should either spread them across multiple comments or email us so that we can make sure that your comment gets posted.

    4) This blog is private property. The First Amendment does not apply. We have no obligation to publish your comments, follow your instructions or indulge your arguments. If you are unwilling to operate within these loose constraints you should probably start your own blog and leave us alone.

    5) Comments made on the Chicago Boyz blog are solely the responsibility of the commenter. No comment on any post on Chicago Boyz is to be taken as a statement from or by any contributor to Chicago Boyz, the Chicago Boyz blog, its administrators or owners. Chicago Boyz and its contributors, administrators and owners, by permitting comments, do not thereby endorse any claim or opinion or statement made by any commenter, nor do they represent that any claim or statement made in any comment is true. Further, Chicago Boyz and its contributors, administrators and owners expressly reject and disclaim any association with any comment which suggests any threat of bodily harm to any person, including without limitation any elected official.

    6) Commenters may not post content that infringes intellectual property rights. Comments that violate this rule are subject to deletion or editing to remove the infringing content. Commenters who repeatedly violate this rule may be banned from further commenting on Chicago Boyz. See our DMCA policy for more information.