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

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  •  Google 'Rosser's Equation' (2+ / 0-)
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    dclawyer06, run around

    a term actually invented by me.

    The equation runs like this: 75% of 150% = 115%

    Although hardly anyone not named Dean Baker or in this case Professor Barkley Rosser seems to grasp the meaning of the following CBO Report:
    The Future Growth of Social Security: It's Not Just Society's Aging The current scheduled benefit projects to increase in REAL TERMS, that is in real basket of goods, by almost 80% over the 75 year actuarial window. (see figure 3 in the linked PDF). That increase projects to be about 50% by the mid 2030s, that is the average beneficiary can expect a real check 150% of the amount a similarly situated retiree gets today.

    Now in the larger scheme of things that just means retirees maintaining the same replacement percentage of their income as today, even under the really crappy Real Wage projections of the Intermediate Cost projection future workers can expect a higher standard of living in pure material goods terms than today (just as we have consumer goods not imagined by our parents in the 60s even as their incomes were increasing at a faster RATE than today). And if restated in terms of GDP per capita the rate once again just keeps pace with the covered population (roughly 6% of GDP supporting 25% of the population compared to 5% supporting 17% today), that 40% increase just means honoring the principle "Honor thy Father and thy Mother" (and equivalents in other world religions and ethical systems). But it supports an odd conclusion put into numbers by my friend Prof. Rosser:

    a 25% cut from a real benefit 150% of that a retiree gets today still means a resultant real benefit 15% better than my Mom gets today.

    Which is no reason not to insist on delivery of 100% of the full scheduled benefit, there is no reason that future retirees should have lagging standard of livings compared to their grandchildren than they do today. That is just to echo the arguments of the Right that there really are no Poor people because they have phone service and indoor toilets today and your wealthy great great grandfather had neither.

    On the other hand it adds some needed perspective to the "it just won't be there for me" argument. Yeah even under current projections of 'bankruptcy' and '25% cut' the retiree of 2050 will STILL have a bigger basket of goods than today. Just significantly less when compared to the living standards of his or her grandchildren. And of course unimaginably less than the living standards of the then 1% who will likely be vacationing on the Moon.

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

    by Bruce Webb on Mon Apr 08, 2013 at 06:32:47 PM PDT

    [ Parent ]

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