Friday, March 11, 2011
Krauthammer: The Social Security trust fund mimics Madoff
Ezra Klein has a voices op-ed in The Washington Post Friday, “What the social security trust fund is worth”, link here. That’s in partial reply to a stinging column by Charles Krauthammer, “Et tu, Jack Lew”, p. A17.
Krauthammer argues that the “trust fund” is worthless, because it consists of IOUS’s issued when government spent part of the FICA tax on other items, not on saving the money for retirees in the way an insurance company must with an annuity. The other part is the “pay as you go”, for current retirees, who at the beginning had contributed nothing. So in a sense Krauthammer makes the SSA look like Bernie Madoff.
It seems that Krauthammer is saying, means test now. Klein talks about future deficits, which are not current deficits, as the reason we have gotten by this way so long.