What would we do in a world where everyone accepted that Low Cost was Low Balling the economy. What if in fact Social Security is not broke: by the numbers. What then? Flip me baby.
The standard economic model that produces the famous 2017 and 2041 dates is called Intermediate Cost. When the Three Alternatives are presented as a range then naturally Intermediate Cost must come in below more optimistic Low Cost. But over the last five years this has only been accomplished by accepting really really pessimistic numbers for productivity going forward Economic Assumptions under the Three Alternatives
Time to break on through to the other side.
Low Cost is a valuable tool. It is the baseline, it is the test, what would it take to rescue Social Security if we did nothing at all. And the answer is "not much" 2.0% productivity saves the day. So what now?
Well we keep Low Cost and recalculate it each year depending on actual economic results. But we cut it lose from any notion it is predictive, it just is what it is, a model that produces a fully funded Trust Fund. We then produce three new Alternatives: Medium, Good, and Poor. Medium assumes that the economy will do just about as good in the New Year as it did in the Old. And absent positive signs of slowdown this seems reasonable. Good would have an outcome up from Medium, Poor an outcome down. (Economists can have a field day debating the proper range).
Each year we take Medium and measure it against Low Cost. If it projects too much income over the seventy five year window we divert that percentage of payroll tax somewhere else. And repeat each year as necessary. The changes end up being fractional, you would never see it in any given paycheck, particularly if it was being diverted to Medicare.
But the fact remains, given ordinary economic growth Social Security is overfunded going forward, and we need to redirect that money somewhere.