Tuesday, February 10, 2009

Average vs Median: the Fuzzy Math of Michael Kinsley

Via Ross Douthat, Michael Kinsley has a riff on entitlement spending on Social Security and Medicare, which has this lovely nugget: "American families may have borrowed irresponsibly, and may have elected politicians who borrow even more irresponsibly on their behalf, but the typical American family is not bankrupt. The average couple age 65-74 has accumulated a net worth (not counting entitlement promises as either assets or liabilities) of $691,000, according to the Federal Reserve in 2004.".

Stop right there.

You probably know what's coming: Kinsley is citing the average net worth rather than the median. But of course, wealth in the United States is fairly concentrated at the top; it's not as top-heavy as Colombia or Mexico, but it's top-heavy nonetheless. The median household age 65-74, also according to the Fed, has a net worth around $209,000. The two figures are right next to each other on table, so Kinsley really has no excuse. To get to a net worth of $650,000 you have to go all the way to the top 25% of U.S. Households, and that's still a figure that most retirees will spend down almost entirely by the time they die. The data suggests that what Kinsley really wanst is either an extremely high threshold for Social Security means testing (basically, if you qualify for whatever reformed AMT we end up with, you don't get your Social Security Check) or the estate tax, not a sudden shift to eliminate Social Security benefits for the middle class.

Hopefully Douthat will have an easier time spotting the next time the economic royalist wing of his party tries to pull the wool over his eyes with crappy data.


Dennis said...

I hate to bring this up, but Michael Kinsley is from the economic royalist wing of *our* party, to the point of being the original "from the left" on Crossfire. Gripped by hopeless Village entitlementitis yes, but not a Republican.

Nicholas Beaudrot said...

I knew he was one of the original neoliberals, but I thought he had migrated to the Republicans at some point.

Were neoliberals always this shoddy with data?

Dennis said...

My impression is no, but I'm not even sure I was on solid food when the neoliberals really happened. I do think they have always had the entitlement thing, and I'm sure they've always been extremely Washington.

corvus said...

I don't think Kinsley migrated. If I remember correctly, he recently had brain surgery, and the first thing he said when he woke up was "Of course tax cuts raise revenues! Why couldn't I see that before!" As a joke, that's pretty brutally anti-republican tax ideology. He's probably just shoddy with data.