For the WaPo, It’s Not Really a Debt if You Borrowed From the Elderly

For the WaPo, It’s Not Really a Debt if You Borrowed From the Elderly –

The Washington Post editorial (5/14/09) on the Social Security and Medicare trustees’ report didn’t break much new ground, other than perhaps a uptick in the sarcasm quotient. (“Oh, please” is their retort to critics who point out the paper’s demonstrable hostility to the Social Security program.)

But this line jumped out at me as noteworthy:

Furthermore, the size of the Social Security surpluses has shrunk, posing a problem for the government since it relies on these funds to help plug its deficits. Over the next seven years, the cumulative surpluses will be $157 billion instead of the previously estimated $454 billion, forcing the cash-strapped feds to borrow even more than they had expected.

This is wrong in an important way: The Social Security surpluses are money that the program is lending to the U.S. government; when the government accepts this money, it is borrowing it, with a legal obligation to pay it back–just as if it had borrowed money from private sources. So whether or not the Social Security surpluses have shrunk doesn’t change the amount of money the government is borrowing–it just changes who the government will owe the money to.

via FAIR Blog » Blog Archive » For the WaPo, It’s Not Really a Debt if You Borrowed From the Elderly.


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