He writes today: “[T]he same people who claim that Social Security isn’t an independent entity when it runs surpluses also insist that late next decade, when the benefit payments start to exceed the payroll tax receipts, this will represent a crisis–you see, Social Security has its own dedicated financing, and therefore must stand on its own.
“There’s no honest way anyone can hold both these positions, but very little about the privatizers’ position is honest.”
There isn’t even an inconsistency here, let alone dishonesty. Krugman would have a point if reformers had ever claimed that the Social Security surplus did nothing to balance the government’s books. But they haven’t. They recognize that the surplus does help with the total budget balance, and that future deficits will make the total budget picture much worse. That’s a consistent treatment of Social Security as part of the government. (I’m using the phrase “help with the total budget balance” in a specific sense here: if you hold other spending and taxes outside of Social Security constant, the excess of payroll taxes over current benefits helps the total budget. If the existence of that excess makes it easier for Congress to cut other taxes and raise other spending, the statement ceases to be as true.)
What reformers have denied is that past and present Social Security surpluses help (or help much) with the deficits in the future. For more on the subject of Social Security, and Paul Krugman’s standards of honesty, go here.