Blogs > HNN > Greenspan lets the cat out of the bag

Sep 26, 2007 2:54 pm

Greenspan lets the cat out of the bag

From Alan Greenspan we got this on Sunday's Meet the Press:"Social Security is not a big crisis. We are approximately 2% points of payroll short over the very long run. It's a significant closing of the gap but it's doable in any number of ways."

The camera unfortunately did not show host Tim Russert's face. I wish it had. I would loved to have seen his expression. For several years Russert has been singing from the George W. Bush sheet of music about"the crisis of Social Security." He has sneered at the Democratic Party politicians on his show who said the system is not in crisis and assured his viewers that the pols knew it was but lacked the courage to tell the truth.

All along it has been apparent that Russert simply was reading from the talking points of the Concord Coalition, Pete DuPont's often useful but also misguided non-profit. Confident he was right Russert failed to look deeply into the numbers he regularly cited even though they have been debunked by economists like Dean Baker and historians Edward Berkowitz and Max Skidmore. (See HNN Hot Topics: Social Security.)

For the record: Social Security is not broke. The system has enough IOU's to cover the insured until the 2040s and even then the shortfall is small relative to the revenues of the government. To be sure sometime in the next half dozen years or so the system will stop producing the surpluses that have helped offset government deficits, surpluses that the pols have become addicted to like crack. A reckoning is coming. But it won't be because Social Security is broke. It will be because the government is broke. The government won't have the Social Security surpluses to spend. Worse, the government will have to use general revenues to pay off the IOU's to the Social Security system. A double whammy. But I repeat: the system isn't broke.

Bush played on fears that the system is going broke in order to destroy it--an old Republican dream going back to the birth of Social Security. Journalists like Russert fell for the Bush approach because they didn't read widely enough in the Social Security literature to understand the subtle points in a complicated debate. Misinformed themselves, they misinformed the public. The public alas didn't want Social Security destroyed and insisted on keeping it as is. Russert no doubt regarded this as a sign of democratic error. It was. The public had no better understanding of Social Security than Russert. They simply wanted what they wanted. They resisted change as the founding fathers predicted they would. (As Forrest McDonald notes in Novus Ordo Seclorum, p. 161, in part the founders' faith in the people derived from their belief in"the force of inertia in human affairs." That is, people naturally resist change unless they are driven to it. See Federalist Papers, no. 27.)

Russert did not seize on the moment to ask Greenspan about Social Security. My guess is he didn't really notice what Greenspan said even though it flatly contradicted what Russert has been saying. For in the very next sentence Greenspan declaimed on the crisis in Medicare, which played to Russert's belief that the system is falling apart and few are paying attention.

But maybe I'm wrong. Maybe this edition of MTP will mark a turning point. Maybe Russert learned something from his learned guest. But I'm guessing not.

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Tim Lacy - 9/27/2007


Thanks for the post. I missed MTP, and was not aware of the non-emergency with regard to SS. Hmm... I'd like to see Greenspan's opinion triangulated, so I'll check out the Hot Topics link.

- TL