Thursday :: Oct 9, 2003

Law Professor Lies in NYT's About Social Security, Makes Situation Worse

by paradox

Posted by paradox

Howell E. Jackson is professor at Harvard Law School. He should have stuck with the law, for in trying to explain Social Security accounting and its risks he lied and made the truth of the matter just more elusive.

The entire thesis of the piece is that because Social Security doesn't use accrual accounting "the public would have to face the hard truth that the system is insolvent."

What, precisely, is accrual accounting? “The most commonly used accounting method, which reports income when earned and expenses when incurred, as opposed to cash basis accounting, which reports income when received and expenses when paid.”

What that means is that if an entity has incurred future debts as part of its operations it must, in real time, reflect the balance of those debts in its numbers for any specific reporting period. Social Security uses cash basis, so the system can be in surplus now but still be “insolvent” at some future time.

All right. Just when, in the future, will Social Security be insolvent, when those future commitments wipe out incoming cash? 2043.

Forty years from now. That’s what the President’s own commission on Social Security (headed by Pat Moynihan) said in 2001. They also published an absolute perfect storm scenario, where in Social Security could meet obligations until….2017. Thirteen years from now.

“…face the hard truth that the system is insolvent.” Liar. “For more than a decade, experts have been warning that the Social Security system needs major reform.” Liar Professor Jackson knows full well major reform was actually enacted in the late eighties by raising payroll taxes. The huge surpluses and long projections of solvency came about precisely because of this reform.

I’ve been pretty hard on liar Professor Jackson. All in all, though, what precisely is he trying to say here? That the federal government is lying to itself and all of us by its accounting methods. That is in fact a very good thing. We won’t act in wise or honorable ways if we simply don’t tell the truth.

Unfortunately he completely skewered real Social Security indebtedness by not saying when the lying catches up to us. Somebody please tell this guy that lying to attempt the spread of further truth is not exactly the way in influence and convince people.

It also unfairly maligns Social Security by inferring the system is unworkable, which is rankly untrue.

Lastly, the NYT’s has simply got to get into the internet age. Professor Jackson could have been a manifestly better author today if he could only link and provide images.

Why can’t he link to all these technical terms? Why can’t he publish incredibly useful graphs and charts? The work screams for such visual aids, and even though I read this in the ether the NYT’s, like a giant ostrich, still publishes authors with no linking or images.

It’s one of the reason the US media got its ass kicked by Lunaville, for of course Michael White has no hesitation in publishing with the full use of http media—he uses an sql database with linked references to the data. It’s hundreds of light years ahead of anything capable in print media, but the NYT’s still doesn’t get it.

The main reason they don’t get it is probably laziness and fear. The laziness anyone can understand, but the fear comes about from having to be real journalists—if one could link and use imagery it’s impossible to be lazy or lie (or at least manifestly harder). God forbid they’d have to grow in their profession or learn new ways or become real harbingers of the truth—readers might actually realize they’re lying chumps!

paradox :: 8:33 AM :: Comments (8) :: Digg It!