Isn't it time for Alan Simpson to go do, you know, something else?

Is antique gasbag Simpson really that ignorant
about Social Security, or is he just a big fat liar?

"One person told me that Simpson’s lack of knowledge about Social Security was such 'a vacuum that after listening to him I knew less than I had before.'"

-- Alex Lawson, commenting on response to his recent

confrontation with Alan "The Old Gasbag" Simpson

by Ken

I was talking about the scarifying noises coming out of the deficit commission, or debt commission, or whatever the heck you want to call it -- that bunch of corporatist tools and social-safety-net haters who, under cover of deficit reduction that wouldn't be necessary if the administration had taken the stimulus program seriously, are very likely pursuing the agenda of plutocrats like Pete Peterson who see the opportunity to basically undo the New Deal.

Yesterday Howie quoted extensively from a blogpost read 'round the world, Paul Krugman's "Zombies Have Already Killed The Deficit Commission," in which he harked back to the famous confrontation between the commission's bellicose and incompetent co-chair, former Sen. Alan Simpson, and Alex Lawson, communications director of Social Security Works, who unlike Simpson knows quite a lot about Social Security. Krugman pointed out:

On Social Security, Simpson is repeating a zombie lie — that is, one of those misstatements that keeps being debunked, but keeps coming back.

Specifically, Simpson has resurrected the old nonsense about how Social Security will be bankrupt as soon as payroll tax revenues fall short of benefit payments, never mind the quarter century of surpluses that came first.

We went through all this at length back in 2005, but let me do this yet again. . . .

You can’t say that for the last 25 years, when Social Security ran surpluses, well, that didn’t mean anything, because it’s just part of the federal government -- but when payroll taxes fall short of benefits, even though there’s lots of money in the trust fund, Social Security is broke.

The commission's response to the flap has been to burrow deeper into secrecy. This morning when Alex went to take up his vigil outside the secret chamber, he discovered that the commission has vamoosed.

And unfortunately, the commission can't make the massive misinformation (disinformation?) its co-chair has been circulating disappear. As Jane Hamsher pointed out the other day, the old gasbag has become the new darling of the know-nothing deficit-hawk Right. The right-wing blogosphere, she reported,

is cheering Simpson on, led by Andrew Breitbart.

Don Surbur says “Simpson did such a good job, I was surprised that Firedoglake posted it on You Tube”:

The interviewer is clearly out of his league and his snotty cherry-picked (and often misrepresented) facts are brushed aside by Simpson who remained reasonable throughout.
The clip shows what happens when you are well-versed in the subject and confident about yourself and your position.

FDL's David Dayen wonders: "Simpson’s Arrogant, Uninformed Social Security Rant: A Turning Point?":

I think there’s just as big a story here: the distancing by even elite commentators of Simpson’s remarks. You just wouldn’t expect to see this coming from Pete Peterson’s Fiscal Times:

…at 78, the irascible Simpson is also known for pithy and colorful language, which was on vivid display last week in a video interview with a representative of Social Security Works, a liberal group opposed to cuts in benefits. Simpson was also condescending and derisive–and wildly wrong about important parts of the Social Security system’s past.

Most of all, he gave no hint that he understood that, for the commission’s proposals to be adopted, advocacy groups will have to be persuaded that the package is necessary and fair–whether the groups’ concerns are about entitlements, taxes or other issues. In short, what Simpson did was to undermine the already slim chances of politicians agreeing on a way to put the government on a sustainable long-term budget policy path.

Meanwhile, with the commission on the lam, Alex Lawson took advantage of the opportunity of what would otherwise have been his livestream this morning to "elucidate some of the ways that Simpson is wrong about Social Security":

SIMPSON: It’ll go broke in the year 2037.

FACT: The Social Security program faces a modest long-term financing shortfall of tax revenue and interest on Trust Fund assets. The Social Security Trustees estimated in 2009 that the Old Age, Survivors, and Disability Insurance program will continue to add tax revenue to their Trust Funds up to 2016. The Trust Funds will continue to grow because of interest earned through 2023, at which time total assets will be $4.3 trillion. Subsequently, Social Security will gradually draw down all reserves before the end of 2037, if Congress takes no action whatsoever, it will have sufficient resources to pay about three-quarters of scheduled benefits. Hardly “going broke.”

SIMPSON: All of them have to do with stabilizing the system, which we are told is insolvent, it’s paying out more then it’s taking in.

FACT: Social Security is currently running a surplus. In 2009, an estimated 94 percent of Social Security tax revenues were spent to meet current expenditures (benefits and administrative costs). The surplus tax revenues, along with interest credited to the Trust Fund, contribute to a growing Trust Fund balance.

SIMPSON: It’s 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been setup.

FACT: The interstate highway system was built in the 1950’s when Social Security’s income and outgo were equal. The build up of the trust fund began after 1983 when Congress consciously chose that route as part of the 1983 amendments.

SIMPSON: When I was your age there were 16 people paying into the system and 1 taking out and today there are 3 people paying into the system and 1 taking out.

FACT: This is the same misleading information that Bush used to sell his privatization plan. The 16 to 1 ratio is a figure plucked from 1950, the year that social security expanded to cover millions of farm and other workers. All pension programs that require a period of employment for eligibility show similar ratios at the start or when expanded because all newly covered workers are paying in, but none of them have yet qualified for benefits. By 1955, the ratio was 8 to 1 and by 1973 the ratio was where it is today.

If the Social Security population estimates and projections for the 130-year period of 1950-2080 are correct, then the greatest demographic “burden” — when the number of dependents (children plus the elderly) relative to the working-age population — is already in the past, having reached its height in 1965 when there were 94.7 dependents per 100 persons of working age.

SIMPSON: They never knew there was a baby boom in ’83.

FACT: The last baby boomers were born in 1964. The Social Security Admininstration employs over 40 actuaries, whose job is to watch trends such as birth rates. They were aware of the baby boomers as they were arriving! Immediately after the 1983 amendments became law, the actuaries projected that Social Security would be in surplus in 2057. In 1996, the actuaries explained why they were now showing a long range deficit:

“the estimate of the future relationship between beneficiaries and workers was just about the same in 1983 when the program was last in balance. In other words, the fundamental ratio of beneficiaries to workers was fully taken into account in the 1983 financing provisions and, as a matter of fact, was known and taken into account well before that. The current deficit has a different explanation, resulting from an accumulation of relatively small annual changes in the actuarial assumptions and in the method of making the estimates.” (US SSA: 1994-1996 Advisory Council: Developments Since 1983).

SIMPSON: They never dreamed that the life expectancy from 57 years of age to 78 or 75 or whatever. Who would dream that? No one. They just died. People worked. Social Security was never a retirement. It was setup to take care of poor guys in the Depression who lost their butts, who were digging ditches, and it was to give them 43% of their wages…when they got out…and that’s what it was. It was never a retirement. It was an income supplement.

FACT: The Social Security Act, signed into law by Franklin Roosevelt on August 14, 1935, formed the basis of an old-age insurance program by providing income security to workers aged 65 and older in most commerce and industry. Although the Great Depression provided the catalyst for the landmark legislation, its principles were rooted in social insurance, which required payment of benefits based on contributions from workers. It became effective only in 1937 and therefore was not intended to provide immediate economic relief from the effects of the Depression.

To repeat; when Social Security was enacted, many people died of childhood diseases, never making it to adulthood and never paying a penny of Social Security. Most people who made it to adulthood, made it to age 65 and beyond. The life expectancy in 1940 for those who made it to age 65 was 77.7 for men and 79.7 for women. If you include all those children who died, you can get yourself to an overall life expectancy of age 57.

Social Security was enacted during the Depression but it was never intended to “take care of poor guys in the Depression,” as Simpson falsely claims. Means-tested welfare paying benefits immediately was enacted for that purpose. Because Social Security is insurance and people had to pay in to become insured, the 1935 statute didn’t provide for any benefits to be paid until 1942.

Robert J. Myers, who was an actuary with FDR’s Committee on Economic Security, who developed Social Security, and who then worked on Social Security into his 90’s, who died just a few months ago, was the one to crunch the numbers. Not only did he know that people would be living longer in the future, he forecast it with great accuracy. In 1934, he projected that in 2000, 12.7 percent of the population would be age 65 or older. According to the 2000 census figures, the percentage of those aged 65 and older was 12.4 percent of the population.

SIMPSON: Just four weeks ago, there wasn’t as much coming in as going out.

FACT: Social Security is currently running a surplus. In 2009, an estimated 94 percent of Social Security tax revenues were spent to meet current expenditures (benefits and administrative costs). The surplus tax revenues, along with interest credited to the Trust Fund, contribute to a growing Trust Fund balance.

The Social Security Trustees estimated in 2009 that the Old Age, Survivors, and Disability Insurance program will continue to add tax revenue to their Trust Funds up to 2016. The Trust Funds will continue to grow because of interest earned through 2023, at which time total assets will be $4.3 trillion.

Alex reports, by the way, that "one person told me that Simpson’s lack of knowledge about Social Security was such 'a vacuum that after listening to him I knew less than I had before.'"

In response to my earlier post on the deficit commission, commenter WJBill raised the interesting question of what exactly Simpson is doing on a commission like this:

I saw "cranky" Simpson on Bill Maher about a year ago and he did the same "schtick" there .... all aggressive and in your face stuff .... I think its his way of controlling the discussion ..... why does he ever have a say in anything? what makes him so special?

All I can say is that it seems to be some sort of ritualistic Village type of thing. Somewhere along the line our Alan apparently established himself in the hearts and minds of those stalwart Villagers standing on the ramparts against the encroachment of reality, that he's some sort of expert, whereas all most of us see is an ignorant loudmouth. Possibly to the simple Village mind it's the same thing?

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