Alan Simpson's idiotic pseudo-certainty

by: Paul Rosenberg

Sat Jun 19, 2010 at 10:30

ALAN SIMPSON: They never knew there was a baby boom in '83.

Like so many other Obama carry-overs of the Nixon/Reagan/Bush regime, this commission is dominated by the "logic" of trusting the mess-makers to clean up the mess, so Simpson's Co-Chairmanship is a perfect fit.  He served in the House from 1964 to 1977, and in the Senate from 1979 to 1997, serving as Republican whip from 1985 to 1995.  In short, he was right in the thick of things as Senate Republicans helped Ronald Reagan put an end to fiscal responsibility with his massive tax cuts and bloated Pentagon spending, which continued indefinitely despite the oceans of red ink they unleashed.

This week, as DaveJ highlighted in his diary "Deficit Commission Co-Chair: Social Security T-Bills Have 'Been Used', Alex Lawson of of Social Security Works managed to confront Simpson with a video camera while he leaving one of the commission's secret meetings.  Lawson asked some fairly straight-forward questions and Simpson responded in his typically abusive manner.  Firedoglake has the [almost] full transcript , minus the first three lines I've transcribed here:

ALEX LAWSON: "Senator, how are you?  How'd it go today?"

ALAN SIMPSON: [Inaudible]

LAWSON: Mainly focus on Social Security today?

SIMPSON: We're really working on solvency... the key is solvency

LAWSON: What about adequacy? Are you focusing on adequacy as well?

SIMPSON: Where do you come up with all the crap you come up with?

SIMPSON: We're trying to take care of the lesser people in society and do that in a way without getting into all the flash words you love dig up, like cutting Social Security, which is bullshit. We're not cutting anything, we're trying to make it solvent.

SIMPSON: It'll go broke in the year 2037.

But, moving onto substance, Simpson claims, "We're not cutting anything, we're trying to make it solvent", which if true would mean that they were looking exclusively at ways to increase revenues. One obvious way to do that would be to raise the cap, and tax everyone's income equally without limit. Or you could even make the tax progressive.  Or you could look for outside funding sources, such a stock transaction tax.  A tenth of a cent for every high-speed stock transaction, say.

There are lots of options if Simpson were telling the truth here.  But, of course, he's not.  Otherwise, they wouldn't have to be (a) doing this in secret (b) for congressional action after the mid-term elections, to reduce accountability to rock bottom.

Here's where it gets really good, though:

LAWSON: But what about the $180 billion in surplus that it brings in every year?

SIMPSON: There is no surplus in there. It's a bunch of IOUs.

LAWSON: That's what I wanted to actually get at.

SIMPSON:Listen. Listen. It's 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been setup.

LAWSON: Two wars, tax cuts for the wealthy.

SIMPSON:Whatever, whatever. You pick your crap and I'll pick the real stuff. It has to do with the highway system, it was to run America. And those are IOUs in there. And now there is not enough coming in every month.

The highway system?  Not so much. Although the Social Security trust fund was already in place in 1983, the current $2.5 trillion surplus was largely amassed after that, as the result of a deliberate increase in taxes to build up the fund specifically to handle the changing demographics--both the Baby Boom and the growth in life expectancy.  As can be seen here, from 1977 to 1982, the fund drained down from $39.6 billion to $19.3 billion, and his been growing ever since.  The Interstate had largely been completed by then, as anyone alive at the time will remember. So Simpson's claim was absurd on its face.

But let's just add a little detail to the picture to underscore just how many ways Simpson--who served four decades in Congress--has gotten this wrong.

First, the beginning of the Interstate:

The Federal-Aid Highway Act of 1956, popularly known as the National Interstate and Defense Highways Act (Public Law 84-627), was enacted on June 29, 1956, when Dwight D. Eisenhower signed the bill into law. Appropriating $25 billion for the construction of 41,000 miles (66,000 km) of Interstate Highways over a 20-year period, it was the largest public works project in American history to that point.

Then, the completion:

Although construction on the Interstate Highway System continues, I-70 through Glenwood Canyon (completed in 1992) is often cited as the completion of the originally planned system. The initial cost estimate for the system was $25 billion over 12 years; it ended up costing $114 billion (adjusted for inflation, $425 billion in 2006 dollars) and taking 35 years to complete.

And finally, the continuation of maintenance and incremental growth:

The federal contribution is overwhelmingly from motor vehicle and fuel taxes (93.5% in 2007), as is about 60% of the state contribution.

And what about the flip side of Simpson's claim?

SIMPSON:Listen. Listen. It's 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been setup.

LAWSON: Two wars, tax cuts for the wealthy.

SIMPSON:Whatever, whatever. You pick your crap and I'll pick the real stuff. It has to do with the highway system, it was to run America. And those are IOUs in there. And now there is not enough coming in every month.

Well, in 2001, when Clinton left the White House, we were running a surplus, and on a path to start seriously paying back the Social Security trust fund.  Since then? Well, take a look:

Alan Simpson:  Totally self-assured.  Totally abusive. Totally wrong.

In short: a perfect Republican.

But a perfect Republican to be trusted with the future of Social Security?

There is no such thing.

There are more unicorns who can be trusted with the future of Social Security than there are Republicans who can be trusted.

Because it's not just Social Security, you see.  As the above passages make clear, Simpson--who spent four decades in Congress--knows nothing about the Interstate highway system, nothing about the costs of the Bush tax cuts, nothing about the costs of the Iraq and Afghcanistan wars.

He is so ignorant about so many things at once that the mind boggles.

Take this one final example:

LAWSON: No, I understand that. But in my understanding from actually looking at the 1983 commission, they actually started prefunding the retirement of the baby boom by building up that huge surplus.

SIMPSON: They never knew there was a baby boom in '83.

WTF????

In May 1951, Sylvia Porter, a columnist for the New York Post, used the term "boom" to refer to the phenomenon of increased births in post war America. She wrote:

Take the 3,548,000 babies born in 1950. Bundle them into a batch, bounce them all over the bountiful land that is America. What do you get? Boom. The biggest, boomiest boom ever known in history.

WTF??????

The 1983 Amendments

The National Commission on Social Security Reform (NCSSR), chaired by Alan Greenspan, was empaneled to investigate the long-run solvency of Social Security. The 1983 Amendments to the SSA were based on the NCSSR's Final Report."Report of the National Commission on Social Security Reform"....

Also of concern was the long-term prospect for Social Security because of demographic considerations. Of particular concern was the issue of what would happen when people born during the post-World War II baby boom retired.

Forget unicorns.  A wet noodle knows more about Social Security than Alan Simpson does.

More importantly, a wet noodle knows less about Social Security that's ludicrously false.

p.s. Dean Baker's take, "Will It Go Round In Circles: Alan Simpson and the Social Security Trust Fund", focused primarily on the main aspect that I avoided, in part because Simpson's confusion what not quite so novel there.  Dean wrote, in part:

But the best part of the show was Mr. Simpson's discussion of the bonds held by the trust fund. Simpson was anxious to tell Lawson that we had spent the money. They had a bit of back and forth over what the money was spent on. (Simpson emphasized spending on highways and infrastructure, Lawson pointed to the money spent on wars in Iraq and Afghanistan and the Bush tax cuts.) But, both agreed that the money had been spent.

Simpson then implied that Social Security was broke because the money had been spent. Lawson pointed out that the trust fund held U.S. government bonds that are backed up by the full faith and credit of the U.S. government. Simpson acknowledged this point, even completed Lawson's sentence.

So, if the bonds held by the trust fund are backed up by the full faith and credit of the U.S. government, then what is the problem? The trust fund contains bonds that must be repaid just like the bonds held by Citigroup, Goldman Sachs, and rich people like Peter Peterson.

Where will the government get the money to repay the bonds held by Social Security? It will probably get the money from the same place it gets the money to repay the bonds held by Citigroup, Goldman Sachs, and rich people like Peter Peterson. We never ask where the government will get the money when Goldman Sachs or Peter Peterson want to cash in their bonds, why on earth would we ask that question when the issue is cashing in the bonds held by Social Security?