Hoodwinked Conservatives

Every so often, I visit the conservative sites. Their thinking always has fascinated me.

If you’re looking for understanding of why conservatives on the street seem so delusional, this piece at Sonoran Alliance is quite illuminating: Americans for Prosperity: Congress and the President are shortening the fuse. AFP, as you know, is funded by the Koch brothers. The piece is co-written by the director of AFP’s Arizona chapter and AFP’s federal issues campaign manager.

I honestly can’t tell whether it’s rooted in intellectual dishonesty or incompetence. I suspect it’s intellectual dishonesty, but it doesn’t really matter. Either way, when you read it, it explains well how so many conservatives on the street are so hoodwinked. Read it uncritically and you come away with the feeling that we’re headed towards national bankruptcy all because of Medicare.

Here’s the opener:

Imagine paying an extra $15,000 a year in taxes. For 50 working years.

That is the burden Washington is placing on our children and grandchildren.

America’s unfunded government liabilities over the next 75 years are between $100 trillion and $200 trillion, depending on how you crunch the numbers. Those are the spending promises our politicians have made through Medicare, Medicaid, Social Security, the Pension Benefit Guaranty Corp. and other federal programs, including “Obamacare.”

According to realistic estimates by the Congressional Budget ­Office, the unfunded liabilities in Medicare alone are $89 trillion.

So, if you’re a conservative with less than average analytical skills and you trust AFP and the folks at Sonoran Alliance, and you read this, you’re angry. Really angry. As you read further, you’re encouraged to despise those Democrats (and some Republicans) who are “shortening the fuse on America’s bankruptcy bomb.”

Read the piece critically, however, and the illogic leaps off the page. Go back to the source information (such as the Medicare trustees’ report) and the stunning nature of the factual errors is readily apparent.

I’ve covered a good bit of this before, in this post: Medicare — Even Reaching the Sane Conservatives Will Be Tough. But back then I didn’t encounter the $15,000 in extra taxes per year canard. It’s a doozy. Here’s how they get there:

Let’s take a midway total liability estimate of $150 trillion. If we divide by the 90 million children in this country who are under the age of 18 (and who did not vote for the politicians who made the spending promises), it comes to more than $1.5 million per child over their lifetimes — above and beyond what they are currently scheduled to pay in taxes.

Over a 50-year working lifetime, that’s $30,000 a year. Lucky for them, financial markets will put some of that burden on those of us who are currently working adults. But if they absorb half of the burden, that would be an average of $15,000 a year in extra taxes per child or grandchild.

In my post last year, I dissected the estimate of the “unfunded liability.” It’s in part just plain wrong and in part based on rather ludicrous assumptions. But let’s look now at AFP’s analysis of what it will take to pay the liability.

So, AFP identifies the 90 million or so Americans under the age 18 who it believes are unfairly saddled with this liability because they did not get to vote for those lawmakers who created it. Then, they reduce the liability by the amount that those over 18 will pay off over their remaining lifetimes.

Okay, so far so good. But consider what this liability is about. We’re talking here about social insurance benefits that will be paid over the next 75 years. Those benefits kick in for most folks at age 65 or so, or 47 years from now for the 18 year olds in the group AFP is so concerned about. Thus, during the last 28 years of the 75 year-period we’re looking at, those “children and grandchildren” increasingly will be funding their own benefits, not those of their spendthrift parents. And those 28 years, by the way, are the years during which the “unfunded liability” is the largest.

Okay, so AFP “forgot” to mention that some of the taxes our children and grandchildren will have foisted upon them will go right back in their pockets in the form of benefits.

But look who else will be getting some of those benefits during the last 10 years of the 75-year period: The people who will turn 65 more than 65 years from now. Oh, wait. AFP failed to mention those people. They’re the unborn. You know, the ones AFP and its allies care so much about when they seek to interfere with women’s health care choices.

But won’t those unborn folks start paying taxes sometime in the next 75 years? Of course. So, let’s say there are 280 million Americans between the ages of zero and 75 today and at the end of that 75-year period they are replaced by 280 million new Americans who are between the ages of 0 and 75 at the 75-year mark. That’s probably an absurdly pessimistic assumption for this purpose, but we’ll give AFP the benefit of the doubt. Of those new Americans AFP forgot to consider, 90 million or so logically would be between the ages of 0 and 18 at that point, so they could not contribute to paying off the giant “unfunded liability.” But that leaves an additional 190 million unborns who will be helping the 90 million already born kids pay the unfunded liability over the next 75 years.

Okay, so that liability actually will be divided into far more shares than the 90 million AFP leads its followers to believe.

Now, let’s return to the amount of the liability. As I pointed out last year, the actual amount of the unfunded Medicare liability is not $89 trillion, as AFP claims, it’s $38.6 trillion. And even that number is based on what may be outlandish actuarial projections, like 65 year-olds making it on average to almost 90. Already, life expectancies for much of our population are in decreasing, not increasing. 

So, the actual liability that must be paid off in 75 years is far less than the $150 trillion AFP claims. In all likelihood, the actual liability is in the $75 trillion range.

And is it absolutely necessary that the entire liability be paid off at the end of 75 years? Of course not. At the end of 75 years, there will be another unfunded liability for the 75 years following. By then, the baby boomers will have long since died and the ratio of those paying in to those taking out will be more manageable.  We can even things out a bit by laying off part of the liability for the next 75 years on those who will be paying taxes during years 76 through 150, without unduly burdening them.

Bottom line: The burden on our children is a fraction what AFP is leading its followers to believe.

The problem: We’ll never ever get AFP’s followers to understand that.