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Harold Pollack: Again, you're listening to Curbside Consult. I'm Harold Pollack, talking
with the Los Angeles Times business columnist and blogger, Michael Hiltzik and it's great
to talk to you. Why don't we shift over to Obamacare. How did ... well actually before
we shift over into Obamacare, why don't you tell me a little bit about just what your
beat is and what your life is at the L.A Times.
Michael Hiltzik: Well, my beat ... essentially I write a business column or a column for
the business page twice a week on Sundays and Wednesdays and my topics can be very broad.
It's anything that we can define as business and we define it very broadly. Business, economics,
finance, the financial world, public policy in almost all respects. It's rare that I'm
ever told that I'm taking on a topic that's out of my diocese, so to speak. On October
1st, I sort of shifted and I started blogging every day.
The blog is called the 'The Economy Hub' and appears on the homepage of LATimes.com and
on the business page and out in cyberspace and that's designed to be an extension of
the column. I still write a Sunday column every week. The Wednesday column now is sort
of out of ... best on the blog or one of the blog posts that's gotten the most attention
that we now put in the paper. So my job hasn't changed much except that the days have gotten
a lot busier.
Harold Pollack: I imagine. Congratulations by the way. I think you've gotten a tremendous
amount of national exposure of late especially with some of the coverage of the Affordable
Care Act that you've done and so that's ... you're definitely one of the handful of people that
people have pointed to as tracing down some of the details of things that are happening.
How did you start getting into the Affordable Care Act?
Michael Hiltzik: I was always interested in ... going back to ... it's an Act in 2010
and in part, that was an outgrowth of my interest in Social Security and Medicare and social
insurance as public policy in general and I came to realize as the roll-out was proceeding
that I was seeing sort of the same phenomenon in coverage of the Affordable Care Act that
I had seen in social security and it's sort of an enduring problem, which is that there's
a lot of coverage that's based on lack of information. Social Security looks simple
on the surface to beneficiaries but it's got a lot of moving parts under the surface and
Obamacare is very much the same. It's a complicated program. It's got a lot of aspects to it.
There are a lot of moving parts and interrelated parts, just like Social Security and what
I found over the years is that if you don't understand these programs and as a journalist
make a real serious effort to become an expert in how they work and what they do and what
they achieve, then you're not really going to be qualified to report on it. You're going
to be vulnerable to being swayed by ideological and political arguments of which there are
... the ground is thick with all of these and all of these social insurance programs
and I certainly saw that happening especially starting in September and October with the
Affordable Care Act and just made it my business to keep an eye on it and do what I could to
keep information out there where it belongs.
Harold Pollack: By the way, you mentioned that the coverage of the roll-out was similar
to Social Security. What were the kinds of anecdotes coming out in the roll-out of Social
Security that came to mind for you?
Michael Hiltzik: Well, it's more of ... the problem with coverage of Social Security is
more the way it's cast these days. The idea ... the issues that have been raised about
its fiscal stability, about it role in the federal deficit, all these things, those of
us who know the program well and really have educated ourselves, know that there is a tremendous
amount of just pure inaccuracy that's floated out there in Washington on ... especially
on the conservative side.
Issues that are raised about ... the claim that there are no real assets in the Trust
Fund, that Social Security is heading toward bankruptcy, these are all highly tendentious
claims that are basically not true or at least true only in a very nuanced way. Maybe they're
half recorded truths and to put them out there, to repeat them without putting them in context
and explaining what's really going on is not responsible and anything you read about Social
Security in the general press really falls into these; a lot of these traps.
Harold Pollack: That is one of the striking things about the Social Security Trust Fund
is that people say, "Well, the only thing in the Trust Fund are these IOUs which are
government securities." The only thing we have ... that's basically saying the only
thing we have is something which says the full faith and credit of the United States
government. If you buy a stock, it is essentially an IOU. It is saying the full faith and credit
of Microsoft Corporation.
Michael Hiltzik: Exactly. The dollars in your pocket are IOUs, the Treasury bonds, the savings
bonds in your kids' college fund are IOUs. They're all IOUs. This is just sort of misrepresentations
that we see all the time in Social Security, yeah.
Harold Pollack: One of the ironies is that Social Security, they buy these at a market
... whatever the market determines the interest rate should be for these, so if you're a free
market absolutist, you basically believe that we're getting a fair deal in this market for
U.S government securities and that we're earning the same return that the government of China
is earning or any personal investor is earning who buys the same securities.
Michael Hiltzik: That's absolutely true and the purchases and sales and the maturity dates
and the interest rates are documented every year on the page of the Social Security Trustees'
Report, which I might add a lot of my colleagues and the press don't bother to read when it
comes out every year.
Harold Pollack: Yeah, we ...
Michael Hiltzik: ... it's always a fraught moment because we know that it's going to
be misrepresented.
Harold Pollack: Yeah, it is ... by the way I should say that a little ... somewhere in
the range of maybe a little bit over 1% of GDP is the unfunded long term liabilities
of Social Security. Now if you express that number in dollars for ... it's a big number
because we're talking about a country of 320 million people over the next several generations.
Michael Hiltzik: Especially if you put it ... if you pitch it as the present value of
the liability out to the infinite horizon, then you get a figure that's $13 trillion
or something that's really only useful to scare people.
Harold Pollack: That is ... well that is useful sometimes. The ... now Medicare by the way
I should say is another matter ... and that really is scary in terms of its long term
fiscal picture.
Michael Hiltzik: Right, but there you see there's sort of a legerdemain or a sleight
of hand that's always used by critics of social insurance. We know that Social Security actually
at this moment is in the black. It's turning a profit every year. Whether it is or isn't
... has some fiscal problems, they're manageable within the four walls of Social Security.
You can change benefits, you can change the tax rate. Medicare is obviously much different.
It really is in trouble mostly because of health care costs which are an externality
and the formula you generally see is that Social Security and Medicare are both entitlements.
Social Security is sort of okay. Medicare is in big trouble, so entitlements are in
trouble and it's this conflating of these two very different programs that's another
source of misrepresentation.
Harold Pollack: Yeah, and by the way I should say Medicaid is often thrown in there and
Medicaid is much more stable financially than Medicare ironically because it has a less
politically influential patient base and therefore it's easier to constrain the cost growth by
doing various things that would be politically difficult to do if it affected senior citizens
in America the way Medicare does.