Need to Fact Check FactCheck.org

Donald Luskin details a disturbing fact - the organization that many use to check facts is itself guilty of not providing accurate information. Highlights:

In a posting last week, FactCheck.org asked, “Does Social Security Really Face an $11 Trillion Deficit?” The answer, in the feature’s headline, was: “Bush and Cheney say yes. But actuaries say the figure is ‘likely to mislead’ the public on the system’s true financial state.”

It’s that headline that is “likely to mislead.” And you can be sure that the opponents of reform will seize on it to do just that — mislead. That headline gives the impression that the $11 trillion deficit is a number created by Bush and Cheney in defiance of expert advice to the contrary. In reality, Bush and Cheney are simply quoting an official deficit estimate of the Trustees of the Social Security Trust Fund in their 2003 and 2004 annual reports.

The trustees relied on the work of actuaries to come up with that deficit estimate. So, to be fair, the headline should have read, “Actuaries say yes. But other actuaries say the figure is ‘likely to mislead’ the public ... ” But that wouldn’t be an exciting headline, would it? Battling actuaries is about as dull as, well — it’s just about the dullest thing in the world.
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According to Gebhardtsbauer, while the American Academy committee had concerns about public perceptions, the new infinite-horizon analysis has distinct advantages:
"Policy wonks can use this to prepare different proposals. Any solution that has effects beyond the 75th year doesn’t see those effects included. I totally understand why they developed this. With private accounts, the system bears all the costs up front, but the benefits often don’t come until after the 75th year."
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FactCheck.org also cited concerns about public perceptions of the $11 trillion deficit number in the 2003 report of the Technical Panel on Assumptions and Methods — a group of actuaries, economists, and demographers appointed by the Social Security Advisory Board. The report recommended that the infinite-horizon deficit figure should be presented as a percent of payroll, and next to the value of payrolls to the same infinite horizon. This was done in the Social Security trustees’ 2004 report. The deficit amount of $10.4 trillion was given as 3.5 percent of payroll and compared with $295.5 trillion of total payroll.

If you want context — so that the public is sure not to be misled — then how about this? That $10.4 trillion number represents the value of economic assets today that would have to be contributed to the Social Security system to assure its perpetual sustainability based on the best estimates we can make at this time. To set things right, then, we would have to contribute today virtually the entire market value of the S&P 500. We would have to throw down the gaping maw of Social Security almost every share of every major company in America today in order to satisfy the hungry beast. (Read more here)