It's hard to believe that members of the right-wing wankersphere could take exception to Paul Krugman's latest article that explained (with really simple numbers and arithmetic and everything) how Commander Chimpy's proposed Social Security cuts are skewed mightily towards the uber-wealthy but, there it is.
What is it with wankers and math? What is so difficult about this? I mean, I like some good intellectual discourse as much as the next person but, really, there's only so much you can take of,"No! No! Two plus two doesn't equal four! Stop saying that, you big meanie!" I mean, Jesus, what does it take for these people to understand things like addition and fractions and percentages, fer Chrissake? As examples, let's follow a couple links and document the atrocities so you can see what I'm talking about.
First, let's review the (apparently) contentious part of Krugman's article:
Let's consider the Bush tax cuts and the Bush benefit cuts as a package. Who gains? Who loses?
Suppose you're a full-time Wal-Mart employee, earning $17,000 a year. You probably didn't get any tax cut. But Mr. Bush says, generously, that he won't cut your Social Security benefits.
Suppose you're earning $60,000 a year. On average, Mr. Bush cut taxes for workers like you by about $1,000 per year. But by 2045 the Bush Social Security plan would cut benefits for workers like you by about $6,500 per year. Not a very good deal.
Suppose, finally, that you're making $1 million a year. You received a tax cut worth about $50,000 per year. By 2045 the Bush plan would reduce benefits for people like you by about $9,400 per year. We have a winner!
So, regarding the last two folks -- Mr, $60K and Mr. $1M -- let's remember those values, shall we, in preparation for the mathematical idiocy we're about to encounter.
First, we have a commenter to this site, Tim Worstall, who writes:
Well, I dunno Paul. Assume a couple of things (hey, this is a blog post, not a position paper), like you collect SS for 15 years (Age 65-80...not absurd). So $6,500 a year is $97,500 in total. Looking at this calculator, how much do you need to save over 40 years in order to have that $97,500? At a 5% return (I don’t think that Krugman’s numbers are correcting for inflation, so the investment figures don’t need to. 5% including inflation is well within the numbers for likely returns that Krugman himself has given us before.) it looks like you have to save $63.41 a month, or $760 a year.
Why, yes, let's make some thoroughly unworldly assumptions, shall we? Let's first assume that, if Mr. $60K were to get a windfall of $1,000 per year, why, he'd be able to invest the whole thing -- every penny of it. It's not as if $60K is such a stunning salary that he wouldn't, perhaps, use that money to pay off credit card debts, maybe do a little home renovation, conceivably use it as a down payment on a larger family vehicle now that he has three kids and needs a second car or anything, or even for that unforeseen medical emergency for which he's almost certainly underinsured, medical insurance in the U.S. being outrageously expensive and all.
Heck, no, suggests Mr. Worstall, Mr. $60K would naturally immediately be able to invest it and get a 5% return on his investment. Apparently, Worstall knows something the rest of us don't -- where to get a guaranteed, risk-free 5% return on investments as small as $1,000. Good for Mr. Worstall -- perhaps he'd like to share that information with the rest of us in the reality-based community.
(And, as I've written on previous occasions, if the right-wing wankersphere knows where to get this kind of guaranteed 5% return, a simple solution would be shift all of Social Security into that fund, wouldn't it? But when you suggest this, the somewhat-stunned response you get is typically something like, "Well, you can't ... uh, I mean ... you see, it doesn't ... Hey! Look at the bright shiny thing!" Indeed. Onward.)
But let's simplify things to where even Mr. Worstall might be able to understand it. Ignore entirely the possible returns on investing. Look simply at the numbers. In the case of Mr. $60K, his $1,000 per year tax advantage is, on a yearly basis, more than offset by his reduction of $6,500 per year in Social Security benefits. Please tell me you understand that -- that $6,500 is a larger value than $1,000. This is not a deep observation, really. It requires you only to see that, whatever slow, careful gains Mr. $60K makes because of his tax cut is rapidly clawed back at six and a half times that rate once he retires and starts to collect SS. Can we all agree on this? Please, dear God, don't make me explain how 6,500 is larger than 1,000, OK?
And what about Mr. $1M? Well, according to the indisputable figures provided by Krugman, Mr. $1M nets an extra $50,000 per year due to tax cuts but, upon retirement, he takes only a $9,400 annual hit in his benefits. See how that works? Mr. 1M's annual benefits loss is less than one-fifth of his annual tax cut windfall. Proportionally, if you combine these two observations, Mr. 1M's advantage over Mr. 60K is over thirty-fold, comparing ratios. Now, is it any wonder that Krugman can say that this scheme benefits the rich?
But, wait. We're not done here.
If Mr. Worstall is simply dense, one of the commenters on his site is really, truly, unspeakably stupid. I refer to "Pat", who writes:
Krugman Mangles The Numbers Again--Updated!
This is what passes for deep thinking on the left:...
Sigh. As I've written before, the only way you can get away with snark is if you're right. If you do snark and you're wrong, you just end up looking like an asshole. Kind of like Pat, who continues with one of the most breathtakingly inane justifications for Bush's plan. Try to believe that someone actually wrote the following regarding Krugman's piece:
Atrios finds this incredibily smart and witty (and it probably is compared to most of what Atrios posts). But there is a simple and obvious fallacy to Krugman's analysis, and that is that there is no reason to consider the tax cuts and social security benefit cuts as a package other than to use one as a club to beat the other.
The tax cuts have been passed. The social security benefit cuts have not.
That's right -- Pat suggests that it's not fair to compare the reduction in SS benefits in light of the tax cuts since, well, the tax cuts already happened and the SS stuff is still pending, therefore they can have no relation to one another.
Ignore, of course, that that very same tax cut is being used as a defense of reductions in SS benefits. Ignore that Pat, in his very next paragraph, writes glowingly of Tim's analysis which used those very same tax cuts to show how Mr. $60K was getting a "pretty good" deal. And ignore the fact that Pat himself, over here, at the hideously-misnamed "Brainster" blog, produces his own table incorporating the very same tax cuts he just described as being irrelevant to the discussion. No, I am not making any of this up. Follow the links, and gaze in awe on mathematical stupidity and/or duplicity taken to a whole new level.
It really is something, isn't it?
Snarky afterthought: By the way, just in case you want to make an issue of these tax cuts and their relation to SS benefits, we can in fact take them entirely off the table and do one last analysis.
Ignoring tax cuts entirely, let's just compare the proportion of annual salary to proposed SS benefit cutbacks, shall we? In the case of Mr. $60K, his annual loss in benefits of $6,500 would represent a ratio of 10.83% of his $60,000 annual salary where (do I really have to explain this?) a larger percentage means a proportionally larger hit you take in your benefits.
And Mr. $1M? A million-dollar annual salary and a loss of $9,400 per year comes out to a paltry 0.94% loss. That's right -- less than one per cent. How many different ways does one have to analyze this to see that Mr. $1M comes out on top every time?
So, I'm begging you -- before you comment taking exception to any of the above, learn some freaking arithmetic. It's not hard. Really. Lots of children have done it.