Re: Calling Prof. DeLong


You ask: is there, or is there not, a crisis coming? The answer is that yes, a crisis is coming, but it has nothing to do with social security.

At some point, the social security system is going to start cashing in t-bills. That is only a crisis if we don't have the cash on hand to pay them back. Remember, though, that only four years ago, the government was running a surplus. That surplus wasn't an accident: it was specifically engineered so that when the social security system started cashing in those t-bills, we would have the cash on hand. That is what Kerry meant when, in the last debate, he said that the Democrats *did* fix social security: we created the surplus on purpose, to pay off those t-bills.

In other words, the system wasn't just sustainable, it was actively being sustained.

The surplus is now gone, and the government is deep in debt. That debt is creating a crisis. But it's wrong to call it a social security crisis.

If I were a gambler, I might get deep into debt. Then I might notice that feeding my kids is a big expense, and that I could repay my loan shark if only I were to stop feeding my children. So does that mean I'm having a kid-feeding crisis? No. Even though I could balance my budget by not feeding my kids, it's not a kid-feeding crisis. It's a gambling crisis.

Our government got itself deep into debt by cutting taxes, starting a war, creating a bad economy, and creating a useless medicare supplement. Social security was not involved. We might notice that we could repay our loan sharks by raiding social security. Does that make it a social security crisis? No. Even though we could balance the budget by stealing from social security, it's not a social security crisis. It's a general fiscal-mismanagement crisis.

Posted by: Josh Yelon | Link to this comment | 12- 7-04 1:40 PM
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So, why does trackback suck so much? DeLong responded directly to your question (nice), and yet it doesn't show up on trackback? What's up with that?

Oh, yeah what'd you think of his response? Every time I read something else on this, I get swayed again. Andrew Samwick at Vox Baby can be pretty convincing about the size of the crisis. Yet I have trouble taking arguments at face value of people who are freaking out about an internal debt in 2018 when our massive deficit spending today is compounding an already serious currency problem.

Posted by: cw | Link to this comment | 12- 7-04 7:49 PM
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Trackback works if the person posting the response includes the trackback URL of the post being responded to. I guess Brad didn't. One can also turn on trackback "autodiscovery" but that can lead to multiple pings, etc. If Unf were around more often, he could just post an update pointing to Brad's post, too.

Posted by: ogged | Link to this comment | 12- 7-04 8:48 PM
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