On the subject of fact-checking the presidential debates, it’s worth noting that while the proliferation of “fact-check” stories over the last few years is probably a step in the right direction, it does come with a risk—that by assigning “fact-checking” responsibility to a particular story or blog, we send a message that the vast majority of political news stories that aren’t explicitly part of the genre are absolved of that responsibility.
Consider a short article published Wednesday night on CBSNews.com, “Rick Perry stands by calling Social Security a Ponzi scheme.” The article reports that at the Republican debate, Perry stood by his earlier characterization of Social Security despite the fact that “fellow Republicans” consider the remarks “polarizing.” Indeed, Karl Rove called Perry’s stance “toxic,” Dick Cheney “said recently it was inaccurate to call the program a Ponzi scheme,” and Perry’s rival Mitt Romney attacked his position.
All of this is accurate and newsworthy. But none of it attempts to answer an important question: Is Social Security like a Ponzi scheme?
In fact, it is not. Dick Cheney is right, and Rick Perry is wrong. Glenn Kessler, in one of today’s “fact-check” pieces, explains why here. Matthew Yglesias explains why here. Jonathan Bernstein explains why here and here. Andrew Sullivan’s readers explain why here, and conservative policy wonk Josh Barro calls Perry’s remarks “incorrect” here. I could go on. But if you’re not a political junkie, and you just happen to be skimming the CBS News story while sipping your morning coffee, you’d have little idea that there’s a clear, factual answer here.
Look: good fact-checking, performed in the normal course of political reporting, is no panacea. It might make a dent in the lies, misinformation, and assorted other BS that afflicts our political discourse, but it’s not going to get rid of them.
It would, though, make for better journalism, and on those grounds alone it’s worth the effort. We can do better than this.
Timely topic.
The normally Obama-coddling AP has "fact-checked" some of the dictatorial rants spewed by Obama during his joint session of Congress: "FACT CHECK: Obama's jobs plan paid for? Seems not."
Care to fact-check the fact checkers?
#1 Posted by Dan A., CJR on Sat 10 Sep 2011 at 11:17 AM
Rick Perry really puts the fear of God into you guys, doesn't he?
There must be twenty "professional journalists" tripping over themselves to "prove" that Perry is "wrong" in comparing Social Security to a Ponzi scheme.
In the interest of "fact-checking" let's toll the Reality Bell with a little "padikiller Q&A" shall we?
Q. How does Social Security fund benefits? A. Social Security collects payroll taxes from non-beneficiaries and gives them to Congress (in the general treasury fund) to buy Canadian buses to send Obama on a "saving American jobs tour". When it's time to cut the Social Security checks, Congress pays back just enough money to cover the checks from the general treasury fund..
Q. How did Ponzi fund payments to his investors? A. Ponzi collected deposits from new investors and put them in a bank to buy himself a whole lot of nice stuff. When it cane time to cut the checks to old investors, he took money from his bank account.
Q. What's the difference in principle between Ponzi's scheme and Social Security? A. None.
The money people pay in payroll taxes goes to start wars - to send Michelle Obama to Martha's Vineyard - to buy new limos for the State Dept - etc. etc.. It does NOT go to purchase any assets. It does not buy any gold bars. Or real estate. Or title to anything. It goes instead to buy paper IOU's printed up by Congress. These IOU's are mere promises to pay. They are unenforceable in any court. They can be devalued or modified by law. They are not transferable and they cannot be traded for any tangible thing.
Of course you can always argue that any particular program is (or isn't) akin to any other historical program. Are there differences between Social Security and Ponzi's postal coupon scheme? Sure - for one thing Ponzi didn't force his investors to send him money like Social Security does. But there are unquestionably a lot of similarities.
Just as Ponzi funded pending payments with new contributions, so does Social Security. Just as Ponzi ran out of money doing this, so will Social Security (by its own forecasts, much sooner than the 35 years predicted only a few years ago). Finally, just a Ponzi skimmed from the investors to fund a lavish lifestyle (for a brief period) so has Congress skimmed from the payroll taxes to fund insane spending.
In one huge way, Social Security is much worse than Ponzi's scheme. Social Security keeps upping the ante at gunpoint - by raising both the percentage in payroll taxes paid by both employees and employers, by raising the retirement age, and by raising the maximum contribution dollar amounts. We've gone from collecting 4% of payroll (from both employees and employers) to now collecting more than 10% today.
#2 Posted by padikiller, CJR on Sun 11 Sep 2011 at 02:08 PM
"...by assigning “fact-checking” responsibility to a particular story or blog, we send a message that the vast majority of political news stories that aren’t explicitly part of the genre are absolved of that responsibility."
I don't need to - nor did I waste my time - reading the rest of your post, so pardon me if you made this point, but is there something wrong with sending an accurate message? Has there been a surfeit of fact checking in the news media in recent years (decades)?
If the media wants to send the message that some stories are just reporting what happened and others are about the facts - that is, be more honest about their product - I am in favor. (Now, if we could just convince Fox "News" to do the same.
#3 Posted by Jeff, CJR on Mon 12 Sep 2011 at 06:56 PM
Objections to the charge that Social Security bears no resemblance to a Ponzi scheme has been pretty thoroughly disposed of by Padikiller in assorted messages on these threads. He certainly has a more penetrating command of the topic than any of the robo-leftists cited in Greg's links, to save interested parties the time of looking them up. Suffice to say that any private insurance company with the unfunded liabilities of Social Security would find its chief officers in the slammer.
NPR recently ran a predictable 'fact check' on Perry's statement - boy, you media liblabs sure do think alike. The funny thing was, the reporter dropped her emphasis (and voice) at the end of the 'report' to say that, yes, the Social Security Administration itself concedes that, according to present projections, the fund after 2037 (at which point someone pushing 40 right now will reach age 65) will only be able to return 75% of a 'contributor's' expected account - which is exactly what Perry is saying. Some refutation, about up to the quality of the refutations Marx (sic) links.
Since Social Security does have some elements in common with a Ponzi scheme, the 'arguments' above boil down to the kinds of ideology-driven ones Republicans are always supposed to be making in defiance of math and physics. I could contend that CJR lies when it advertises itself as a 'journalism review', rather than a political organ doing its bit for the Democrats against the GOP, with quite a lot more justice. A matter of opinion? Depends on what you mean by 'journalism review'? Depends on what you mean by 'Ponzi scheme', perhaps? This piece doesn't even rate a 'nice try, but no cigar'. Yglesias' 'refutation' was particularly pathetic - just sloganeering.
#4 Posted by Mark Richard, CJR on Mon 12 Sep 2011 at 08:16 PM
Mark Richard wrote: "Depends on what you mean by 'Ponzi scheme', perhaps?"
padikiller notes: Not in CJR-Land, it doesn't...
In CJR-Land, equating Social Security to a "Ponzi Scheme" means stating that Social Security insurance is precisely the same thing as operating a scheme to marketing investments in international pre-WWII postal coupons.
The very fact that the commie/liberals are driven to "fact-check" a purely metaphorical comparison is a plain indication of the gutteral fear they have of Rick Perry.
It would be nice if they would fact-check Obama's (false) claim that his mother died after being denied insurance coverage for a pre-existing condition.
#5 Posted by padikiller, CJR on Mon 12 Sep 2011 at 09:31 PM
In a related development, the Daily Caller - which CJR likes to denigrate because it is politically conservative, not because it isn't up to the quality of leftist sites (which CJR ignores for quality-monitoring purposes) - has dug up a 1996 article by left-wing idol/public nuisance Paul Krugman in which he calls Social Security . . . wait for it . . . a Ponzi scheme. Krugman even explains why Social Security resembles a Ponzi scheme.
Maybe Greg Marx or Ryan Chittum can address this characterization in their next denunciation of Rick Perry for saying the same thing. Or explain what has changed, beyond Krugman's zeitgeist-surfing evolution into a feeder of red meat to Democratic activists, including the ones who wear journalistic fig leaves.
#6 Posted by Mark Richard, CJR on Wed 14 Sep 2011 at 12:43 PM
I'm not going to go point-by-point, but I agree with some of what padikiller and Mark Richard say here. There are certain structural similarities between Social Security and a Ponzi scheme, such as that each depends on new contributions to provide benefits to earlier contributors. Alex Tabarrok has some fun pointing out the similarities here.
It's also true that you can't take the politics out of this argument, and that to some extent whether SS is like a Ponzi scheme depends on what we mean by Ponzi scheme. Karl Smith, whom everybody should be reading, makes that point here.
And it's also true that Social Security faces a projected funding shortfall in the medium- to long-term, and that demographic changes and a general slowdown in economic growth of the sort the U.S. has experienced pose challenges for the program.
So why did I write that Perry is wrong? Because to my mind, two fundamental features of a Ponzi scheme are that it is a deliberate criminal fraud, and that the vast majority of investors get nothing back when the schemes collapses. And to my mind, in his debate remarks Perry was invoking those associations -- arguably the first, and clearly the second -- although neither of them apply to Social Security. So, he's wrong.
That said, there's room for a more nuanced appraisal of his remarks than I offered. CJR's Ryan Chittum praised this Wall Street Journal piece that declared the Ponzi metaphor "misleading," but gave a fuller hearing to Perry's position, and in the process gave readers some insight into how Social Security works and where its challenges lie. I'd quibble with some parts of the WSJ item, but I agree it's a good post.
The CBS News story I linked to, though, simply didn't attempt to answer the question. No matter your political perspective, or your views on Social Security, or your readiness to treat Perry's remarks as metaphorical, there are facts about Social Security that are relevant to the claims Perry is making. And to publish a story as if that's not the case is weak journalism.
#7 Posted by Greg Marx, CJR on Wed 14 Sep 2011 at 01:10 PM
Greg Marx wrote: ....to my mind, two fundamental features of a Ponzi scheme are that it is a deliberate criminal fraud, and that the vast majority of investors get nothing back when the schemes collapses.
padikiller agrees: And both are present in Social Security. It is indeed a deliberate fraud (and would be unquestionably criminal if duplicated in the private sector).
Furthermore, one huge difference between Ponzi's scheme and Social Security is that Ponzi paid some of the money back - while Congress takes every single penny of social security contributions.
Ponzi's investors got back 30 cents on the dollar, and Social Security is going the same way fast...
#8 Posted by padikiller, CJR on Wed 14 Sep 2011 at 03:27 PM
To Greg, thanks for your response. There are similarities; there are also differences. I think the blanket rating of Perry's contention as 'false' by press 'fact checkers' protects the program from the sometimes-uncomfortable scrutiny that it deserves. Wasn't it Michael Kinsley who said something about the worst things done in Washington are done in the plain light of day, not the things done in secret?
#9 Posted by Mark Richard, CJR on Wed 14 Sep 2011 at 04:58 PM
I think the karl smith link you meant to have is this one.
If you put quotes around the link after the <a href="..."></a> it works better here.
And preview is your friend.
#10 Posted by Thimbles, CJR on Wed 14 Sep 2011 at 07:34 PM
@Thimbles,
Thanks for flagging that. Our MT for some reason does not require quotes in posts, but does in comments, and I forgot about the distinction. Also, while the Smith link you provided is a good one, I had an earlier post of his in mind -- the link, and the other two, should work in my comment now.
#11 Posted by Greg Marx, CJR on Thu 15 Sep 2011 at 10:10 AM