The Washington Post has published a useful fact-check of misleading claims about Social Security, including two I've flagged before: Bush's claim that Social Security going "bankrupt" and Democratic suggestions that Bush's private accounts plan is intended to enrich Wall Street. But Jim VandeHei and Jonathan Weisman mess up the numbers pretty badly in the middle of the story:
For virtually everyone, those future rates of return [under the traditional Social Security system] would fall below the 4.6 percent gains the government actuary anticipates for money that would be invested in personal accounts under Social Security. But under the administration proposal, anyone investing in the accounts would lose 3 percent of their gains to help finance the new system. So beating the current system is not a sure thing.
This is just wrong. People who create private accounts would not lose "3 percent of their gains" - they would have their benefits reduced by the amount of funds diverted into their private accounts plus 3 percent interest. Depending on the returns they receive on their investments, that could amount to as much as 100% of their gains or more. Weisman is an economics reporter who already had to correct a story explaining how Bush's "benefit offset" plan would work; shouldn't he be able to get this right by now? It's reminiscent of all the reporters who wrote that 4 percent of payroll taxes would be diverted into private accounts rather than 4 percent of eligible salary.
Update 2/27: I emailed Weisman and a number of editors yesterday in an attempt to notify them about this mistake so it could be corrected before Sunday's final print editions went out, but I've received no response and the online edition still contains the same error. I'm starting to get annoyed with the Post, which also ignored my request for a correction explaining the definition of "waterboarding" after they published two different definitions.
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