Two months ago Illinois’ Democratic Sen. Dick Durbin made the utterly misleading assertion that “Social Security does not add one penny to our debt — not a penny.” In fact, Social Security, which is a pay-as-you-go program financed primarily by payroll taxes, began taking in less money than it was spending for the first time in 2010. Its cash flow deficit has been growing ever since, and it accelerated since the enactment of the payroll tax holiday two years ago.
Only by counting the yearly interest on the $2.7 trillion worth of U.S. Treasury IOU’s that already sit in the program’s trust fund (paid for, ironically enough, with more IOU’s) — a fund that has been raided over the years to pay for other government spending, can one possibly claim that Social Security “is not in crisis.”
The following day, the president’s aides echoed Durbin’s fiction about Social Security. “We should address the drivers of the deficit,” White House spokesman Jay Carney said during his daily press briefing, “and Social Security currently is not a driver of the deficit.”
This is pretty funny considering that even the NYT has noticed recently that Social Security is in worse shape than you thought. It should be shocking that politicians defend a practice that would send them to the hoosegow if they were directors of a private company, but it’s not, is it? Say, why don’t they just give some of those magic coins to the Social Security “trust fund.” Then everything will be swell.