Alan Simpson, Social Security Illiterate

| Tue May 10, 2011 12:12 PM EDT

Is it true that life expectancies have gone up dramatically since 1940, when Social Security first went into effect? Sort of. In 1940, lots of children still died young, and this skewed the average way down. Fifty years later those kids mostly didn't die, so the average was higher.

But childhood mortality doesn't affect Social Security one way or the other, so we don't really care about that. What we care about is the people paying into the system — working age adults — and how long they live after they retire. So how much longer do retirees live these days? Answer: For men, life expectancy at age 65 has gone up from 78 to 83. Since the Social Security retirement age has also gone up, from 65 to 67, this means that over the past 60 years the expected payout period has increased by about three years.

Hilariously, though, Social Security scold Alan Simpson simply has no clue about this. Ryan Grim asked him about it recently:

HuffPost suggested to Simpson during a telephone interview that his claim about life expectancy was misleading because his data include people who died in childhood of diseases that are now largely preventable....According to the Social Security Administration's actuaries, women who lived to 65 in 1940 had a life expectancy of 79.7 years and men were expected to live 77.7 years.

"If that is the case — and I don’t think it is — then that means they put in peanuts," said Simpson. Simpson speculated that the data presented to him by HuffPost had been furnished by "the Catfood Commission people" — a reference to progressive critics of the deficit commission who gave the president's panel that label.

Told that the data came directly from the Social Security Administration, Simpson continued to insist it was inaccurate, while misstating the nature of a statistical average: "If you’re telling me that a guy who got to be 65 in 1940 — that all of them lived to be 77 — that is just not correct. Just because a guy gets to be 65, he’s gonna live to be 77? Hell, that’s my genre. That’s not true," said Simpson, who will turn 80 in September.

Simpson is a guy who's taken very seriously on Social Security issues inside the Beltway. He's studied it for years. And yet, as he makes clear later in the interview, he simply had no idea any of this was true. No idea. And he doesn't believe it, even though this stuff is Social Security 101.

This is the kind of thing that explains why so many people think Social Security is some kind of fiscal time bomb. They just flatly don't understand the arithmetic. The plain fact is that Social Security is only modestly underfunded and can be fixed with a basket of quite moderate changes over the next 30 years or so. Anyone who understands the numbers knows this. People like Alan Simpson don't. But guess who gets the most press coverage?