Flimflam from the Master Himself

by Stephen Spruiell

It takes quite a bit of nerve to call someone a flimflam man and then come back a scant two weeks later with this kind of talk:

So where do claims of [a Social Security] crisis come from? To a large extent they rely on bad-faith accounting. In particular, they rely on an exercise in three-card monte in which the surpluses Social Security has been running for a quarter-century don’t count — because hey, the program doesn’t have any independent existence; it’s just part of the general federal budget — while future Social Security deficits are unacceptable — because hey, the program has to stand on its own.

Actually, that’s not what critics of Social Security’s sham accounting are saying… not even close. What we’re saying is not that the program “has to stand on its own” on principle, but because it is already cutting into general revenues (to the tune of $41 billion this year) and will soon start to consume even larger chunks, necessitating much higher taxes as a share of GDP. Of course, Krugman’s cool with that — that’s his preferred method for dealing with the problem — which is why he attacks anyone who puts forward a plan that makes the program solvent without raising taxes, such as Paul Ryan, with such vitriol. 

Anyone who accuses critics of the Social Security trust-fund shell game of “bad-faith accounting” is running some serious flimflam of his own. The IOUs in the trust fund represent money that the government owes to itself. As long as the program remains as it is currently structured, that money has to come from somewhere: QED, higher taxes, fewer benefits, or some combination of both. To just pretend the problem doesn’t exist, however, is flimflam of the highest order. Only a master such as Krugman could say it with a straight face.