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View Diary: Hell, No! Social Security Contributes Nothing To Deficit (119 comments)

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  •  Don't attribute such absolute precision to the (15+ / 0-)

    Trustees' projections.  I'll repeat what I said about this issue in a comment re. a prior diary.  The Trustees' projections are notoriously pessimistic (which is a good thing).  Historically, the actual performance of the Trust Funds has more closely mirrored the so-called Low Cost projection that they issue but never get publicized.  This projection, based mainly on economic growth of about 2.9% (still historically low), shows Social Security able to pay full scheduled benefits throughout the 75-year projection period.  Also, the Trustees' analyses have always taken population dynamics into account and this has nothing to do with the projected shortfall.  The current and future employee-beneficiary ratio was foreseen by the Trustees in 1983, when changes were last made to Social Security.  The main thing that has changed, that wasn't foreseen, was the extreme and increasing concentration of income by the top earners.  Since most of the income increases have been concentrated within the top 2% since 1983, this additional income has been largely untaxed for Social Security since it's above the tax base of slightly over $100,000.  The Trust Funds have been shorted by about 7% of wage taxes, based on the fact that historically 90% of wages is taxed vs. the current 83%.  There is no crisis, and we can afford to wait for a more favorable Congress, since a return to more normal economic growth would resolve the "problem."  If not, an increase (not total elimination) in the cap and a 1/2 percent or so increase in FICA phased in over a 20-year period would solve it with no need to cut much-needed earned benefits.  In addition, Social Security has nothing to do with the deficit and should only be considered on its own merits, not in conjunction with deficit reduction.

    •  pessimistic, maybe (0+ / 0-)

      but i have yet to find one single example of their revisions moving the depletion date backwards, only forwards.  so they may be a tad pessimistic on the details, but the trendline remains solid.

      Please don't dominate the rap, Jack, if you got nothin' new to say - Grateful Dead

      by Cedwyn on Mon Apr 08, 2013 at 04:30:32 PM PDT

      [ Parent ]

      •  You are not looking very hard (14+ / 0-)

        The 1996 Report showed Trust Fund Depletion in 2029
        The 2004 Report showed Trust Fund Depletion in 2042

        Thirteen years into the future over eight Report years.

        The 2008 Report STILL showed Depletion in 2041

        Unsurprisingly the trendline has been down during the Great Worldwide Recession. But the 2012 Report STILL shows Trust Fund Depletion in 2033. And 2011 had it at 2036.

        Meaning that after sixteen years of total inaction the overall outlook for the Trust Fund is STILL four years in advance of what it was when the doomsayers started chiming in.

        That is your "solid trendline" started pretty much four years ago. And in response to fairly extraordinary economic numbers particularly on the employment side.

        SocSec dot.Defender at - founder DK Social Security Defenders Group

        by Bruce Webb on Mon Apr 08, 2013 at 05:49:35 PM PDT

        [ Parent ]

      •  More than a tad pessimistic (10+ / 0-)

        The 2012 OASDI Trustees Report indicates that much of the financial deterioration in this year’s Social Security report reflects updated economic data and assumptions, including weaker-than-expected economic performance and unexpectedly high inflation in 2011.  But to believe their "intermediate assumptions" that led to their projection (not prediction) that the trust funds will be exhausted by 2033, we must assume 20 more years of recession, very low workforce growth, and no wage growth.  I leave it to you as to whether these assumptions by the Trustees are unassailable by reasonable people.

        •  Thats not what they projected (0+ / 0-)

          they made true actuarial projections of growth.  No one is predicting 20 years of recession.

          They also calculated out death rates, immigration rates, employment rates, etc to factor in a holistic picture.

          Красота спасет мир --F. Dostoevsky

          by Wisper on Tue Apr 09, 2013 at 07:32:46 AM PDT

          [ Parent ]

          •  Yes, they made projections (1+ / 0-)
            Recommended by:
            Tim DeLaney

            I agree that they made actual projections based on the factors you mentioned.  What I’m saying is that these projections are extremely difficult to make accurately, and the Trustees haven’t had a stellar record of accuracy.  I’m not saying they’re incompetent, corrupt or have a slanted political ideology.  It’s their job not to be overly optimistic and to identify problems that can be addressed.  But their intermediate projections are based on assumptions of a permanently weak economy, in my opinion.  The decades-long weak economy is marked in their assumptions by a long-term decrease in the average number of hours worked by employees; a relatively low, flat rate of productivity increase (apparently discounting any effects of innovations such as alternative energy); a long-term decrease in the average number of hours worked; an assumption that employer contributions to retirement plans would grow faster than employee compensation, thus reducing the percentage of compensation taxed for Social Security (highly doubtful); and average annual GDP growth of only 2.1%.  Average GDP growth this low over such a long period of time seems like recession to me.  Now, the Trustees’ projections might be right.  But I highly doubt it.

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