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Sunday, January 06, 2008

The outrage at 9:25

Everybody's talking about the Obama-Edwards-Clinton confrontation that took place at about 9:35 PM during the Democratic presidential debate, but almost nobody is commenting about what ABC was doing prior to that moment. As Mark Kleiman notes:
I'm not sure why ABC News thought it important to start every segment of the debate with a video segment embodying a Republican talking-point, or why Gibson thought it his place to reinforce those talking-points in direct debate with the candidates.
And how! At 9:25, Gibson took the debate to domestic issues, and framed it with this: (emp add)
GIBSON: I'm going to move on to domestic policy. How much the government is spending, How much you would spend with the programs you propose, promises you've made. And some of that is entitlements. A little background - ABC's Betsy Stark.    [video segment followed]

STARK: Every hour of this new year another 400 baby boomers will turn 60, swelling the ranks of those soon eligible to collect Social Security and Medicare. The forecasts are foreboding. By 2017 the Social Security surplus runs dry, and the system begins in taking less tax revenue than it pays out in benefits. For Medicare the problems are even more severe. By 2013 the program's Hospital Insurance Fund is expected to fall into the red, and the insurance premiums seniors pay for doctor's visits and prescription drugs are projected to keep rising. Many young American's simply assume there will be nothing left for them to guarantee the security of their old age.

screenshot     mp3
To most people, the expression "run dry" means "empty". But in fact, in 2017 the Social Security Trust Fund's surplus will not have even reached is largest size:
Social Security Trust Fund
  • Projections are that current receipts will continue to exceed expenditures until 2017 (according to Charles Blahous, Special Assistant to the President for Economic Policy).
  • Thereafter, there will be a shortfall that will be made up by withdrawals from the Trust Fund, although the Trust Fund will continue to show net growth until 2025 because of the interest generated by its bonds.
To clarify. The Social Security Trust fund has two income streams: tax receipts and interest on bonds. It has one expenditure stream: to retirees. ABC would have you panic because, even after piling up a huge surplus and before that surplus has reached its maximum, in 2017 one income stream to the fund will be matched by the expenditure stream. And what really matters, the ability of the fund to pay benefits, isn't scheduled to be a problem until 2042.

When misleading statements like those Betsy Stark peddled are believed, it's no surprise that, as she put it, "Many young American's simply assume there will be nothing left for them to guarantee the security of their old age."

UPDATE: The Daily Howler reviews the same misleading segment.



2 comments

I'm shocked, shocked ... ABC News parroting the RNC. Who would have thunk?

What about later, when Gibson keep wanting them all to apologize for critising the surge and no one would bite.

Who needs Fox when you have ABC/Disney? Co-conspirators?

By Anonymous Rockie the DOg, at 1/06/2008 9:11 AM  

technically, the OASDI program will begin to cause budgetary stress in 2017 or whenever, since (some of) the interest on the SSTF's bonds will have to come as cash from the general fund and not just be rolled-over bonds like they are now.

But this is by Greenspan's design from 20-odd years ago so if this nation had a collective IQ over 60 would not be an issue.

By Anonymous Troy, at 1/08/2008 11:02 PM  

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