It’s Official: Alan Simpson is a Moron

It boggles the mind to think that people like Alan Simpson are taken seriously as experts on the Federal budget and the measures that will have to be taken if we want future Federal revenues more closely match expenditures. The Huffington Post reports on a recent speech that Simpson gave to a Financial Industry group, in which he lambasted Social Security as a “ponzi scheme” and repeated a misleading statistic on life expectancy to justify the claim that the program was never meant to cover as many people as it does now, for as long as it does now:

Simpson argued that Social Security was originally intended more as a welfare program.

“It was never intended as a retirement program. It was set up in ‘37 and ‘38 to take care of people who were in distress — ditch diggers, wage earners — it was to give them 43 percent of the replacement rate of their wages. The [life expectancy] was 63. That’s why they set retirement age at 65” for Social Security, he said.

But Simpson’s assessment of the program’s genesis relies on a fundamental misunderstanding of the significance of average life expectancy in an era that was characterized by relatively high rates of infant mortality. While life expectancy was, indeed 65 years in the late 1930’s, once infant mortality is taken out of the picture life expectancy increases significantly. In fact, a man who lived long enough to collect Social Security in 1940 could expect to live to age 77.7, and women had an even higher life expectancy at 79.7 years. This is significant because individuals who die in childhood neither contribute to nor collect from Social Security, and so are irrelevant to the Social Security funding equation. While Simpson’s argument suggests that Social Security covered retirees for an average of just two years, in fact the average retiree was covered for a period closer to 16 years, which is not all that different from today.

More distressing than this confusion on Simpson’s part is his reaction to a Huffington Post reporter who contacted him in an attempt to correct his misunderstanding:

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 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.

The stunning innumeracy revealed by this reaction baffles adequate expression. Here we have a supposed “expert” on budget matters who seems to think that average life expectancy is a guarantee that any given individual will live to that age. Does Simpson really believe that, one might ask, or is he just “confused?” I’m not sure one can take comfort in either explanation. What is certain is that if Simpson is representative of the quality of thinkers that are driving the debate on how best to lower the national debt while simultaneously protecting older Americans from destitution then we, as a nation, and as a people, have a great deal to fear.