Big Scary (Bogus) Numbers!
The latest installment of the neocons’ efforts to privatize everything they think they can make a buck from involves throwing around Big Scary Numbers:
The shortfall between the promises the government has made on Social Security, Medicare and other benefit programs is $45 trillion over the next 75 years, up nearly $1 trillion in just one year, the Bush administration reported Monday.
The administration, releasing the "Financial Report of the United States Government" for 2007, said that the gap between benefits that have been promised and projected revenues is up 67.8 percent from just four years ago, when it was estimated at $26.9 trillion.
This shortfall includes Social Security and Medicare in addition to Railroad Retirement and the Black Lung program.
Ooooh, scary! We should rush right out and cut all government programs! Or turn them over to Big Business! Right?
That’s what the Chicago Boys, the Shock Doctrine folks, want you to do. They want to shock and scare and stampede you into trashing public programs so they can turn them into moneymakers for themselves.
Here’s Dean Baker with some reality and context on the Big Scary Numbers that the Bush Junta is waving at you:
Suppose the news reporter had told us what this number is — the projected shortfall for Social Security and Medicare for current participants, under the assumption that no one else ever starts working in the United States. The $45 trillion is the discounted (using a 3 percent real interest rate) value of this projected shortfall.
I don’t know a single economist anywhere who thinks that the U.S. economy is going to stop having new workers. There are a lot of kids in the schools who will eventually graduate, at least some of them plan to work when they are adults. So this number does not sound very scary on its face since it has nothing to do with anything we will see in the world.
How about telling listeners why the number grew by $1 trillion from 2006 to 2007? I don’t recall any big boosts in SS benefits approved by Congress. The reason for the growth is that we are measuring the shortfall in 2007 dollars instead of 2006 dollars. 2007 dollars are worth about 3 percent less than 2006 dollars due to inflation. Are you scared yet?
Ah, but the bogosity doesn’t end there:
…the growth in projected spending over the next 75 years is overwhelmingly due to the government health care programs, most importantly Medicare and Medicaid. In other words, the scary stories of government deficits are in fact scary stories about health care costs being out of control.
Funny thing: Health care costs, which are out of control in the US (to the point where they’re rising twice as fast as wages), aren’t out of control in places with socialized medicine. You know, like Canada, where car makers like Toyota are building new plants instead of in America, because in the US health care costs make up around $1500 of the cost of each car that rolls off the assembly line. But the privatizers don’t want you to know about that.
The amount of bullcrap the privatizers have slung over the years is amazing. Apparently their new trick is to conflate Medicare (which is in trouble — that’s why the privatizers want nothing to do with it) with Social Security (which is not).
Why is Social Security safe? Because the sky-is-falling projections used by the Trustees are based on unrealistically gloomy economic forecasts (less than 2% per year forever), as if we were going into a permanent recession or depression. The reality is that even with growth that averages below-par — 2.7% — Social Security never runs out of money. Ever.
But get this: In order to convince Americans to destroy Social Security and hand their pensions over to the brokerage firms, the privatizers tout phenomenal rates of return on stock-market-based accounts of as much as 7% per year. These rates are possible only if the economy is growing at 1998-peak-boom-year levels every single year to the end of time. So the privatizers aren’t just arguing Permanent Recession — they’re also arguing Permanent Boom. At the same time!
Verily, ’tis a Bogosity Trifecta of such proportions that it threatens the very fabric of the space-time continuum.