McCain: Deceptive Or Stone Cold Ignorant

by hilzoy

I was watching CSPAN yesterday, while I was eating dinner, and who should I see but John McCain. And he said the most extraordinary thing. It's the second paragraph of the excerpt that follows; I've included the rest so that you can see that there was no context that made it seem more reasonable:

"I'd like to start out by giving you a little straight talk. Under the present set-up, because we've mortgaged our children's futures, you will not have Social Security benefits that present-day retirees have unless we fix it. And Americans have got to understand that.

Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace, and it's got to be fixed.

Now, how do you fix it? Now, how do you fix it? You fix it by reaching across the aisle, and you say to the Democrats, "Sit down with me at the table. Sit down with me, the way Ronald Reagan and Tip O'Neill did the last time that Social Security was in deep trouble, and that was way back in 1983."" (From CQTranscriptions, "SEN. JOHN MCCAIN HOLDS A QUESTION-AND-ANSWER AT A TOWNHALL MEETING", July 7, 2008. Accessed via Lexis/Nexis.)

Let me repeat the astonishing bit: "Americans have got to understand that we are paying present-day retirees with the taxes paid by young workers in America today. And that's a disgrace. It's an absolute disgrace, and it's got to be fixed."

The fact that we are paying present-day retirees with the taxes paid by workers, young or otherwise, is not a disgrace, or a scandal, or a new development. Social Security has been funded this way since its inception. The first person to receive monthly benefits, one Ida Mae Fuller, had worked for three years, and contributed all of $24.75 to the Social Security Trust Fund. She lived to be 100, and collected $22,888.92 in benefits. Did the Social Security Trust Fund found that money under its pillow? Somehow, I don't think so.

Younger workers paid Ida Mae Fuller's pension. Workers who were younger still paid those workers when they retired. And even younger workers, like me, are paying for their Social Security benefits. This is not a disgrace; it's the way the system operates. And it's certainly not a sign that we've mortgaged our children's futures, or that something has to be fixed.

One interpretation of this statement would be that McCain is being deceptive: trying to make a straightforward feature of Social Security seem like a scary new problem, in order to gin up support for his nonexistent plans to fix it. I tend to think that he just doesn't know how Social Security works. (This would explain why he doesn't see the problem with privatizing the system: the need to pay a generation's worth of transition costs.) However, it doesn't really matter which explanation is right: either one ought to be close to disqualifying.

John McCain: deceptive or stone cold ignorant? We report; you decide.

Comments

[publius]

If I were Obama, I'd ramp up the Demagoguery-o-Meter on this all the way to 11.

I'm sure older Floridians will be interested in his explanation for why he thinks this arrangement is a disgrace.

[Warren Terra]

In the version McCain heard, Ms. Fuller married a young rich heiress, like anyone with sense would. It's a policy he recommends to everyone.

Or was it the Social Security Administration that married a young rich heiress?

[Q the Enchanter]

I'm pretty sure we're paying McCain with the taxes paid by young workers in America today.

[Adam]

I wonder how the moderators of the upcoming Presidential debates feel about statements like this. Talk about an embarrassment of riches. And Obama "moving to the center"... jeez, where would you start?

[Bernard Yomtov]

I think McCain is just going through the motions.

He's doing nothing but recycling tired and, more important, incorrect, right-wing talking points. There do not seem to be any ideas, new, old, or middle-aged behind his campaign. Just a sort of "Tell me what to say and I'll say it" approach. So he trots out the old bromides. Maybe the press has learned.

[Adam]

It's a good thing we're not funding Social Security with property taxes, isn't it, John?

[Nombrilisme Vide]

Vile slander, Warren. You should be deeply ashamed of yourself for suggesting McCain would advocate such a senseless, socially destructive course of action. Women marrying heiresses, indeed.

[Adam]

He's doing nothing but recycling tired and, more important, incorrect, right-wing talking points.

You know, now that you mention it, I feel like I've heard this phrasing before:

And Americans have got to understand that.

Jeez, I just can't place it.

[Michael Cain]

I think McCain is just going through the motions. He's doing nothing but recycling tired and, more important, incorrect, right-wing talking points. There do not seem to be any ideas, new, old, or middle-aged behind his campaign.

Exactly. McCain is running on the post-Reagan Republican mythos: only a Republican in the White House can be trusted to actually cut your taxes; only a Republican in the White House can be trusted to take a firm military stand against all comers; and only a Republican in the White House can be trusted to cut the size of government, which you all know you want. There'll be some crumbs about family values and gun ownership, but mostly the big three.

And he'll get 40% of the voters simply by going through those motions. Whether he can get enough to win with them depends on the mainstream media, and so far it looks to me like they're inclined to play along.

[mikesdak]

Using that mythos has a huge problem; the current Republican who didn't do two of those things at all (unless you're wealthy,then you got the tax cut) and screwed up the one he tried. The media may not be leaning on that, but voters beyond that automatic 40% will notice.

[Model 62]

Whether he can get enough to win with them depends on the mainstream media, and so far it looks to me like they're inclined to play along.

A close race is more fun to call than a blowout.

More profitable, too.

[jdog]

A slight emendation: Social Security was NOT at first funded with transfer payments from current workers to current retirees. That was added by amendments in 1939 and 1950, with a dramatic expansion in benefits in the late 1960's.

See Jacob Hacker, The Divided Welfare State (Cambridge Univ. Press, 2002), at 108-111 & 135-145.

That said, there is nothing wrong with funding current obligations out of current receipts, so long as there is adequate planning for demographic bulges. But it is also true that one of the reasons / consequences of doing so is to tie the hands of future generations: it is VERY difficult to change the system because one would have to collect monies for current beneficiaries and future beneficiaries at the same time.

The complaint by some of course (i.e., the right), is that the current system amounts to a wealth transfer, and that is something conservatives do not like. Of course in this case it is an intergenerational transfer; it works precisely because the future is infinite so far as we know: there will always be a future generation (barring nationwide apocalyptic cataclysm.) But it is a transfer nonetheless, and to radical individualists, this amounts to socialism. It is a collectivist relation rather than an individualist relation. Yet all of politics is collectivist: we have one government that represents us all. The question that follows is how far to separate the political from the economic. No time to go into this here, but political economics of the 19th century would find it difficult indeed to separate the two. As would today's Federal Reserve Bank.

[Kinney]

I am actually for private accounts, though it is not high on my priority list after the past eight years. But McCain's statement is ridiculous. He says that Reagan reached across party lines and fixed Social Security while somehow keeping a "disgraceful" funding mechanism. If you think the problem is the way in which Social Security is funded, Reagan didn't fix a damn thing.

I don't know if I would prefer my President to be deceptive or ignorant, but the past eight years have taught me that I sure don't want him to be incompetent.

[jdog]

It is becoming increasingly clear that McCain does not understand economics. His policy prescriptions are incoherent, incomplete, and poorly thought out (if indeed there is any serious thought at all.)

In addition, he is a poor manager. He is a poor speaker. And he is old.

[John Thullen]

"And he is old"

And, his military and government pensions are paid out of my taxes.

I've advocated this before. Sorry to be repetitve: A virulent tax revolt from the Left; one that causes Republicans like McCain to steal our tax money to fund the Federal Government's violent reaction to the insurrection.

Republicans hate taxes, but believe me if they got the tax revolt they've been asking for all these years, they'd butcher the insurrectionists when they found out taxes actually pay for adventures like Iraq.

They actually don't realize that at the moment. They think al Qaeda and the IRS are the same enemy, not realizing that one collects the money to buy the weapons to defeat the other.

[russell]

John McCain: deceptive or stone cold ignorant?

Neither.

I'm sure McCain understands perfectly well how SS is funded. Likewise, all the points of fact he presents are 100% accurate. There is no deception.

There are lots of folks who react viscerally to their money being taken from them and given to someone else, for whatever reason. They simply cannot abide it.

McCain wants those people to vote for him. That is the purpose of his comments.

Thanks -

[Tony P.]

Republicans hate taxes, but believe me if they got the tax revolt they've been asking for all these years, they'd butcher the insurrectionists when they found out taxes actually pay for adventures like Iraq.

Let's not overstate the case: none of us has actually "paid" for Dick and Dubya's Excellent Adventure. It was all done with borrowed money.

I keep telling you guys that the best way to expose the GOP's inherent loopiness on economics is to challenge them to carry their principles to their logical conclusion and PRIVATIZE THE NATIONAL DEBT. Split the check. Let every American service his own personal share ($32K or so, and rising) of the national debt. Let him kick in a bit extra to pay down his balance (and not mine) if he wants to. Let his own kids (and not mine) inherit his outstanding debt balance when he dies. This modest proposal may sound insane, but it is exactly symmetrical to the notion of privatizing Social Security.

-- TP

[tomtom]

McCain knows nothing about economics. It is damn disturbing that we have another ignoramus running for president.

It seems that millions of prople don't really care if the president knows the basics of government, because otherwise Bush wouldn't be president and Mitt Romney would have won the nomination.

As billmon said after the 2004 election, we don't need a new government, we need a new population.

Unbelievable ignorance or the willingness to appeal to same.

[Original Lee]

Actually, it's hard to tell if McCain understands how SS works or not. He is talking to people who have an incorrect concept about how SS works, and he is not bothering to try to educate them. Instead, he is playing to their incorrect concept and telling them stuff that fits with that concept, so they get all mad when somebody else wanders in and tells them that McCain is crazy-ignorant on the topic and his plan won't work.

McCain's base, plus many other Americans, believe that their SS money goes into a cubbyhole labeled with their name, and the government keeps it nice and safe until they turn 65 (or in my case, 67.5), and then they get it back in monthly installments for as long as they live. This idea is reinforced by the annual SS statements we get in the mail. Most people never do the math to realize that they will probably get more out than they put in. Most people don't know that SS also pays out for people with permanent disabilities and orphaned minor children, and even if they did, they dismiss that money as coming out of some other tax pocket. They also simultaneously believe that poor people who didn't pay SS because they were on welfare all the time are the reason SS is going broke, because we are somehow pulling money out of the SS system to pay for those deadbeats.

Give the GOP some credit for knowing what their voters think, and then you'll see that what McCain is saying sounds perfectly reasonable and pragmatic.

[Martin]

There's something even more fundamental going on here. McCain objects to what I would term a basic definition of society, that we all participate in the common good. It's not that much of a stretch to imagine McCain saying, "Our fire department protects every single child in the town, even though it is funded entirely by taxes from hardworking adults. And that, ladies and gentlemen, is a disgrace." The logic is pretty similar. And that's the reason I find it hard to imagine voting for a Republican, ever. The Democrats, whatever their flaws, want to knit people together into a functional society, and Republicans, whatever their virtues, want to fray the bonds that connect us, turn us into individual agents each fending for ourselves. There are times when the Republican direction is needed, but they're rare, and this isn't one of them.

[Jay Severin Has A Small Penis]

The solution is easy. Every American should marry an heiress. It worked for McCain and it worked for John Kerry.

[Jay Severin Has A Small Penis]

The solution is easy. Every American should marry an heiress. It worked for McCain and it worked for John Kerry.

[liberal japonicus]

that last, errr, handle is a wee bit problematic.

[Phil]

Especially for Jay Severin!

[Ginger Yellow]

"You know, now that you mention it, I feel like I've heard this phrasing before"

That's not the only similarity.

McCain: "Now, how do you fix it? You fix it by reaching across the aisle, and you say to the Democrats, "Sit down with me at the table"

Bush: "What they need to do is to get Syria to get Hezbollah to stop doing this shit."

In both cases, hope is not a plan. Once you get the Democrats to sit down, Mr McCain, what exactly are you going to do to "fix" social security?

[KCinDC]

Ginger, the parallel between Bush and McCain on how to solve problems in the Middle East is even more direct:

“One of the things I would do if I were President would be to sit the Shiites and the Sunnis down and say, ‘Stop the bullshit,’” said Mr. McCain, according to Shirley Cloyes DioGuardi, an invitee, and two other guests.

[cw]

McCain's base, plus many other Americans, believe that their SS money goes into a cubbyhole

Which is why every time I see someone make a reference to the trust fund or to "solvency" I over-react (just ask B. Yomtov) and try to educate everyone about the financial, economic and legal non-importance of the trust fund. I am now going to take a deep breath, and stop writing, not wishing to restart that entire discussion.

[Mike Volpe]

I agree that this comment is politically brain dead, and that frankly, is the problem with the social security debate. This program is a ponzi scheme. The fact that it has been a ponzi scheme since its inception is a disgrace and the fact that a politician calling a spade a spade is political suicide is an even bigger disgrace. Even worse is sites like yours feeding bull to the masses that this program is pure and great. It isn't. A ponzi scheme always fails. That's what Social Security is. It has been a failure since the beginning and if you have any economic sense it is obvious.

http://theeprovocateur.blogspot.com/2007/12/update-while-story-about-obama-getting.html

[Nell]

Original Lee is onto the answer.

The people who need to be locked in a room with cw and Dean Baker for an afternoon are the media assigned to the John McCain beat.

[Catsy]

Mike Volpe: This program is a ponzi scheme. [...] A ponzi scheme always fails. That's what Social Security is. It has been a failure since the beginning and if you have any economic sense it is obvious.

What's obvious is that you haven't the faintest idea what you're talking about, and are bandying around right-wing talking points on Social Security without any real understanding of the meaning of several key words and phrases.

First of all, let's start with the hanging curve: "failure". Now, perhaps your definition of what it means to "fail" comes from reading a bit too much Fail Blog. I honestly can't say where you pulled this out of. What I can state, unequivocally, is that Social Security does not meet any known definition of the word.

Since its inception it has done precisely what it was designed to do: function as a social safety net for the retired and disabled. It has run a surplus during most of its existence, and this surplus goes into a trust fund to hedge against years when payouts exceed revenues. Most nonpartisan projections predict either no shortfall, or a shortfall modest enough to either lean on the trust fund or require very minor tweaks. It is the most popular government program in United States history, and only the fringe anti-tax jihadis want to see it abolished entirely.

It's hard to see which of these points constitute "failure" to you or anyone else. But by all means, share--and support with evidence--your argument for it.

More thorny is your assertion--a lie, really--that Social Security is a "ponzi scheme". This isn't a new lie, though I think it was Sowell who (even more ignorantly) called it a pyramid scheme rather than a ponzi scheme. This is your basic FUD tactic--sowing fear, uncertainty and doubt by associating a hugely popular program with catch phrases that almost everyone understands as being apocalyptically negative without really understanding what they mean. It's thorny not because the lie contains any nuggets of truth, but because it's difficult to point out why this is a lie without getting into details that put most people to sleep. All wingers have to do is shout "ponzi scheme!", then sit back and snicker while their opponents fire up PowerPoint and sheeple go "eek, a ponzi scheme, Social Security is BAD!"

Honestly, if you can't tell the difference between these two things:

- An investment scam that promises high short-term returns based on exceptional circumstances and relies on getting people to continually reinvest their money in the scheme, and ends up screwing its investors in short order when the scam collapses or is busted--

- A government program that promises a low but reliable fixed income when you retire or are disabled, is funded by payroll taxes in order to ensure it pays for itself, and is so trustworthy when it comes to paying out the promised amount that almost fifty million people with no other source of income rely on it for survival--

Then at best you're simply too uninformed to have an opinion on the matter that rises above bathroom stall scribblings.

[El]

There are lots of folks who react viscerally to their money being taken from them and given to someone else

Are you reacting viscerally to your money being given to Halliburton?

[tgirsch]

Hilzoy:

jdog beat me to it, but I'm pretty sure social security was originally intended to get far enough of the funding curve that current workers would in effect be collectively pre-funding their own retirements, rather than relying on today's workers to support today's retirees. That said, though, I agree with everything else you wrote.

Also:

[Farber]
Did the Social Security Trust Fund found that money under its pillow?

I think you mean "find" rather than "found." My guess is you were going back and forth between that sentence, and "Did McCain think that ...," which would indeed have "found" as the correct word.
[/Farber]