. . . Monday January 17, 2005

The New Math is Words

In his NYT Magazine piece A Question of Numbers, Roger Lowenstein explains that there is really no firm evidence that Social Security is in deep crisis (even though there is a coordinated campaign to suggest as much):

The campaign is potentially self-fulfilling: persuade enough people that Social Security is going bankrupt, and it will lose public support. Then Congress will be forced to act. And thanks to such unceasing alarums, many, and perhaps most, people today think the program is in serious financial trouble.

But is it? After Bush’s re-election, I carefully read the 225-page annual report of the Social Security trustees. I also talked to actuaries and economists, inside and outside the agency, who are expert in the peculiar science of long-term Social Security forecasting. The actuarial view is that the system is probably in need of a small adjustment of the sort that Congress has approved in the past. But there is a strong argument, which the agency acknowledges as a possibility, that the system is solvent as is.

Although prudence argues for making a fix sooner rather than later, the program is not in crisis, nor is its potential shortfall irresolvable. Ideology aside, the scale of the fixes would not require Social Security to abandon the role that was conceived for it in 1935, and that it still performs today — as an insurance fail-safe for the aged and others and as a complement to people’s private market savings.

Like with all things political, it’s really not “a question of numbers.” It’s a question of words, messaging and framing. And in that game, things don’t necessarily have to add up.

Concentration is important!