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 | | From: | sammy.finkelman at relaynet.org | | Subject: | Re: Good thing we're spending hundreds of billions on this shit | | Date: | Tue, 18 Jan 2005 11:50:39 -0600 |
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 | > > We know almost to the minute when it will run out of
> > funds and at that point (circa 2040)
>
> You know nothing about long-term projections. Professional actuaries,
> demographers, and economists don't know what's going to happen next
week,
> let alone in 2040. There is considerable variability in the estimates
of
> when the trust fund will be exhausted--in the 1995 trustee's report,
the
> exhaustion date was 2030. In the 2004 report, the exhaustion date was
> 2042. That is, over ten annual reports, the exhaustion date was
pushed
> *back* 13 years. The exhaustion date has even more variability when
> stochastic projections, rather than the usual deterministic
projections,
> are examined.
>
> BTW, during the same period of time (from the 1995 to the 2004
trustee's
> reports), the (deterministic 75-year) actuarial balance (based on the
> intermediate projection and current legislation) of the fund improved
from
> about -2.2 percent to -1.9 percent, so by doing nothing over the last
ten
> years the situation has improved both in size and in time horizon.
Still
> think you know almost to the minute when the trust fund will be
exhausted?
>From the new York times of Monday, January 10, 2005:
(I see they started with 1997)
Year of trustees' report: 1997
Year trust fund expected to run out: 2029
Years remaining until trust fund is expected to run out: 32
Year of trustees' report: 1998
Year trust fund expected to run out: 2032
Years remaining until trust fund is expected to run out: 34
Year of trustees' report: 1999
Year trust fund expected to run out: 2034
Years remaining until trust fund is expected to run out: 35
Year of trustees' report: 2000
Year trust fund expected to run out: 2037
Years remaining until trust fund is expected to run out: 37
Year of trustees' report: 2001
Year trust fund expected to run out: 2038
Years remaining until trust fund is expected to run out: 37
Year of trustees' report: 2002
Year trust fund expected to run out: 2041
Years remaining until trust fund is expected to run out: 39
Year of trustees' report: 2003
Year trust fund expected to run out: 2042
Years remaining until trust fund is expected to run out: 39
Year of trustees' report: 2004
Year trust fund expected to run out: 2042
Years remaining until trust fund is expected to run out: 38
(Sources by Social Security Administration; Center on Budget and Policy
Priorities)
> The bottom line is that while the Social Security system is *not* in
> long-term equilibrium and does need fixing,
Why say that? The projections are nmotorious for being extrenmely low.
the |"intermediate projection" which is the one everyone uses, projects
annual growth rates of 1.8% a year starting in 2018, as far as the eye
can see. (according to a George Will column)
Social Security is not in trouble. It's overfunded.
Note that even a recssion did not stop the date the trust fuind runs
out of money from receding.
> only a scare-monger would
> describe it as a crisis. gwhite is honest about not liking Social
Security
> on grounds of principle--that's a reasonable debate to have. Pushing
> through big changes based on a false and manufactured crisis is
neither
> reasonable nor honest--but it does happen to be the style of the
current
> administration.
The problem here is that if Social security *were* in trouble, private
accounts would not save it. They estimate stock market groowth based on
the past. but in the past economic growth was way over 1.8% a year. And
ultimately stock prices are related to economic growth. You can't use
one estimate of economic growth for the problem and another for the
solution.
Now actually i read the bush proposal may propose cutting back future
social security benefits by changing the way they are initial benefit
is calculated. There may be included in it a proposal to index for
infation rather tahn index for wages when adjusting wages earned before
age 60.
the trith is,m hiowever thuis need not be done. If we change the
est8imates to something more likely, social security is now overfunded
and part of Social security taxes can be diverted to a 401k type
program.
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