Read/listen to this, and start getting worried.
As is their wont, Matt Yglesias and John Holbo wave their hands furiously, and insist that notwithstanding the story, the Social Security trust fund actually does exist. Even if one assumes that it does–and there is plenty in the NPR story to show otherwise–Yglesias and Holbo miss a still-larger point:
By the middle of the next decade, the Social Security surplus will turn into yearly deficits as more Baby Boomers retire. And the government will have to come up with hundreds of billions of dollars a year to cover its obligations to the trust fund.
At that point, the debate over whether or not the trust funds exist becomes moot.
“The policy choices that we have to make good on Social Security obligations are exactly the same with the trust fund or if we’d never had the trust fund,” MacGuineas says. “Raise taxes, cut Social Security benefits, cut other government spending, or borrow the money. That’s the only way to repay the money.”
(Emphasis mine.) For Holbo’s benefit: Imagine if as a parent, you not only had to make good on the IOUs your daughter has collected, but also on the IOUs of a whole host of other children, many more than are paying into the parents’ running savings account. That is the situation Social Security is facing. It is not a good one. And other than Holbo’s lede-buried point about how “there may need to be belt-tightening” (understatement of the year), there is absolutely nothing whatsoever in either Holbo’s post, or in Yglesias’s that should make us feel better about the situation.
Nota Bene: While Matt Yglesias likes to pretend to great intelligence and wisdom–and in the process, will endlessly remind you that he went to Harvard–the fact is that his skills at ratiocination are less-than-impressive (my favorite example of a Yglesian miring in the swamps of deep thought can be found here, ironically enough). It’s really not a good idea to follow Yglesias into a particular line of argument, because one does not tend to emerge from the experience with one’s reputation unscathed. For that matter, I suppose that the same can be said about Holbo.
UPDATE: Yglesias’s lack of understanding concerning this issue seems to be a longstanding one.