February 25, 2007
IT'S A MORAL ISSUE, NOT A FISCAL ONE:
Social Security: a contrarian view: New York actuary David Langer advocates making benefits much more generous, instead of cutting back (David R. Francis, 2/26/07, CS Monitor)
Because of their long-term nature, these forecasts are shaky. They hang on assumptions of interest rates, human longevity, economic growth, immigration, population, etc., that can't really be known with precision today.
Langer figures the optimistic projection is most likely to be true. It shows a small surplus in the trust fund at the end of 75 years. After looking at the annual trustees' reports from 1992 to 2002, he finds this cheery forecast the most accurate in predicting - so far - the future level of the fund's assets.
Projected shortfalls are like WMD in Iraq, just tools to get folks to move who wouldn't otherwise.
Posted by Orrin Judd at February 25, 2007 8:07 PM
What??? There is no fiscal crisis for Social Security? it is made up to gin up support for privatization? I agree that 75 yr predictions are hardly foolproof (see Global warming) but to dismiss all the evidence that reform is needed?
Read the article. Langer says SS will be fine because he assumes payroll taxes will rise to meet the shortfall.
The article notes that 2040 is when the SS reserves run out and people will only get 74% of the benefits they are getting now but hey, no problem, that 74% will be the same in purchasing terms as the 100% now?
And I love how the article ends -don't worry about Medidare and Medicaid entitlements running amok because food stamps, civil service retirement plans, and family support services will grow slower than GDP.
Finally, 2040 isn't the operative date - it is in about 10 years when the SS outlays begin to exceed the SS coming in. At that point, since the SS reserve fund is essentially IOUs from the govt, then the shortfall will have to be dealt with by tax increases, spending cuts, or benefits cuts.
Langer figures the optimistic projection is most likely to be true. It shows a small surplus in the trust fund at the end of 75 years.
Oh, then everything's okay -- we'll have a surplus in the trust fund. Or, if we apply the necessary malarkey-indicative quote marks: We'll have a "surplus" in the "trust fund" 75 years from now.
Back in reality, Greg Mankiw notes that nearly 9 out of 10 economists agree that Social Security is heading for trouble. You couldn't get economists to agree like that if you pointed a gun at their heads.
If the government won't let people my age invest our FICA taxes, maybe they could at least launch a gigantic mattress subsidy. We've gotta hide that money somewhere.
Yes, Mankiw wants to reform it for moral reasons. If you can scare people into doing the right thing you're wise to use their fear.
Who knew so many economists will lie for principle?
I know W had trouble filling the economic council seat that deals with SS because no one wanted to have to go defend reforming it on the Hill all the time under oath.
Matt, maybe it's their principal the economists will lie for?
Gotta throw a tentative b.s. flag on that one. Do you have a link to some non-moonbat source?
Yeah, I did a mental double-check on the spelling when I wrote that!
The folks who were asked to fill the slot.
Matt, you picked the right one, my comment was the pun.