Earlier this week, an Investors Business Daily editorial noted the weak treatment the Social Security Trustees' Report (summary here) received from the Formerly Mainstream Media:
Journalists in Washington are supposed to be public watchdogs. But when it comes to the crisis facing Social Security, they act more like lapdogs for politicians determined to shirk their responsibility.
The Washington Post, New York Times and Associated Press all led off their stories on the latest Social Security and Medicare trustees' projections by pointing out that Social Security isn't expected to deplete its trust fund reserves until 2041. This supports the contention of Democratic politicians and the AARP that the day of reckoning is more than three decades away, so reform is not an urgent need .....
That is, of course, incorrect, as The Heritage Foundation noted (bolds are mine):
Social Security spending will exceed projected tax collections in 2017. These deficits will quickly balloon to alarming proportions. After adjusting for inflation, annual deficits will reach $67.8 billion in 2020, $266.5 billion in 2030, and $330.9 billion in 2035.
..... From (2017) on, Social Security will require large and growing amounts of general revenue money in order to pay all of its promised benefits. Even though this money will technically come from cashing in the special issue bonds in the trust fund, the money to repay them will come from other tax collections or borrowing. The billions that go to Social Security each year will make it harder to find money for other government programs or require large and growing tax increases.
There's a method to Old Media's studied ignorance. Heritage explains the problem, but doesn't make the ultimate connection:
Every year, there is one less year of surplus and one more year of deficit. Once those deficits start in 2017, the Trustees Report shows that they will never end. Each year, with the disappearance of another year of surplus, reforming Social Security gets more expensive.
At some point, it will get too expensive to fix, and the USA's retirement system will be stuck in the ruts seen in France, Germany, and other countries that refused to confront their demographic and financial realities. Those who defend Social Security as it is, and wish for political reasons to perpetuate the dependency culture it fosters in the senior population, would actually prefer that the US go down that same failed road. They know full well that all they have to do is run out the clock for something like 5-10 years. At that point, the partial privatization of Social Security to include personally managed investment accounts that could save the system will likely become fiscally impossible.
Don't think for a minute that Old Media doesn't understand this. They know that the less they cover Social Security's real problems, and the more they allow it to be demagogued by its diehard supporters, the less likely it is that reform will occur. Their focus on 2041 instead of 2017 is no accident.
Cross-posted at BizzyBlog.com.
