Incurious Paul

NY Times columnist, alleged economist and self-regarding blowhard Paul Krugman does it again. In his latest blog entry, he's taken a look at the latest report by the Social Security trustees and finds that, since the actuarial balance not quite as red as before, everything's peachy:

Moral: Social Security's financial problem is relatively minor. It doesn't deserve the emphasis it receives from most pundits.

Big whoop! And the Titanic was fine until all that water rose above the third-class levels. Krugman has become so biased and intellectually dishonest that whenever the unemployment rate drops, he immediately assigns it to phantom "people who stopped looking for work." Now he sees a hiccup in the actuarial tables at Social Security, which is still going bankrupt in 2041, and shrugs his dwarfish shoulders.

What's worse, he doesn't seem the least bit interested in trying to uncover why the demographically-driven collapse of Social Security is showing signs of life. For that, we have to thank Kevin Drum for doing some heavy lifting to find that an accounting trick has tipped the balance somewhat:

Translation: instead of just pulling a net number out of a hat, the trustees built a model that estimated the actual demographic characteristics of both immigrants and emigrants. And guess what?

- Illegal immigrants tend to skew young. This benefits the system.
- Young people have more children than older people. This benefits the system.
- Some illegal immigrants pay taxes for a few years and then leave. This benefits the system.

Bottom line: "This year's report results in [...] a substantial increase in the number of working-age individuals contributing payroll taxes, but a relatively smaller increase in the number of retirement-age individuals receiving benefits in the latter half of the long-range period." Give or take a bit, it turns out that this shores up the Social Security system to the tune of around $13 billion per year. Thanks, illegal immigrants!

That's right, illegal immigration is shoring up Social Security and Medicare and this is precisely the kind of economic and social dynamic that drives most economists. But not Paul Krugman.

Extra - Here's Tom: "Let's fleece the illegals"