Coffee with Stephanie Kelton
We Should Be Raising, Not Cutting Social Security Benefits Now...

Can It Really Be the Case That the Obama Administration Is Proposing a Deal That Would Cut Social Security Benefits But Not Raise Social Security Revenues

There are many overlapping ways of looking at the federal budget. One way is to look at revenues and spending in total--the "unified budget". Another way is to look at the health of the various "trust funds"--Social Security, Medicare, etc.--that have dedicated revenue streams coming in and dedicated expenditures going out.

For the Social Security trust fund, over the long-term expected revenues are less than planned payments--which means that either (a) benefits will have to be cut, (b) revenues will have to be raised, or (c ) somebody will have to perform some political heavy lifting in order to beef up the trust fund. Changes to Social Security law should ideally involved moves on all three fronts--some of (a), some of (b), and some of (c ) in order to get the long-term arithmetic of the trust fund into balance.

But now the Obama administration appears to be planning to agree to do just some of (a) without touching (b) or (c ).

Can't anybody in the White House play this game?