Social Sec.in great shape-once you get past the blue smoke of the Bush adm

[papau]

The Complete report of the Social Security and Medicare Boards of Trustees can be found at http://www.ssa.gov/news.htm#2004trustee and http://www.ssa.gov.OACT/TRSUM/trsummary.html and moved to http://www.ssa.gov/OACT/TR/TR04/ as it was released Tuesday March 23, 2004.

The September 2004 issue of Pension News is at: http://library.soa.org/library-pdf/PSN0409.pdf and has excerpts from the Soc Sec 2004 report, followed by a report on why equity increases in the investment rate are not a free lunch - one should reflect investment risk in cost analysis - An interesting sequence for the Sept 2004 issue of the Actuaries Pension Section News!

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Social Sec.in great shape-once you get past the blue smoke of the Bush administration.

Of interest is the fact that the high cost estimate has gotten silly in its assumptions (long term GDP Growth grades quickly down to only 1.1% and stay there for 65 years, with productivity growth of 1.3%, real wage differential between wage in covered employment and CPI of 0.6%, and CPI OF 3.8%).

The intermediate cost assumptions grade down to 1.8% growth and stay there for 65 years (with productivity growth of 1.6%, real wage diff of 1.1%, and CPI of 2.8%).

Only the "low cost" estimate uses reasonable assumptions of GDP growth grading down to 2.6% and staying there for 65 years (with productivity growth of only 1.9%, real wage diff of 1.6% and CPI of 1.8%) - indeed these are in line with most folks expectations.

And Guess what - the GOP's half actuary uses the above to scream crisis by the year 2042 in Soc Sec, and in 2019 in Medicare.

Damn these folks are good at keeping everyone blinded by blue smoke and feathers.

Funny how the SS fund NEVER has a problem in the projected 75 years under the reasonable assumptions - the ones called "low cost", when done under the traditional deterministic model. So old Steve puts in "confidence levels" and "a stochastic model" so as to reduce the result to a "likelihood of assets being exhausted by 2071 at the 97.5% confidence level. Smile folks - please....

Under the projection there is indeed an increase in the percentage of GDP going to SS at the 75th year (do you know anyone else worried about what happens in the 75th year from now? from the current 4.3% of GDP to 5.2% of GDP (by the way - the actual payroll tax is closer to that 5.2% of GDP than in the benefit payouts - that is why we have a surplus - so this amounts to no change in payroll tax cost!!!!)

But the wild side really hits on Health insurance - the world provides first rate universal health at 10% of GDP if you let your taxes pay for it - as in Canada. The Ins. Company running of Medicare will cause the current 2.7% of GDP cost to rise to 14% in 2078 - and still no universal health! And do not ask about Medicare part B and D - Doctors and Drugs -- it will rise from 0.9 today to 6.2% in 2078 - and still no universal health. Of course they don't mention that today's part D cost is nil - that the drug benefit does not kick in until 2006

In any case it is a fun read for those who thought you could not lie while saying the truth. It proves once again how the GOP are the masters of the partial truth lie.

[necso]

1. Indeed,

and removing the regressive "cap" on SS taxes would show an even brighter picture.

Medicare has problems, but massive abuse by the "free market" is a major cause. A national health care system, the obvious answer to many problems with health care and health care costs, will never be given honest consideration until the neos are made to crawl back under the rock from whence they came.

[beyurslf]

2. I have always wanted to end the exemption on the payroll tax

Seems like the best way to help the poor is to give that exemption on the start of income instead of the end. Like, the first 20K is exempt form payroll. My only question is how is this implemented. It would be easy if we all worked at the same jobs all the time, but what happens when you change jobs. They wouldn't know how much you had made so far. I suppose it could be a rebate at the end of the year but the poor could use the increase in weekly pay more.
Ideas?

[indepat]

3. But rethugs don't want to help the poor: Welfare is for the affluent and

large corporations and the only way to achieve this, their job number one, is to continually make the tax system even much more regressive as they have done time after time.

[necso]

4. This is a tough issue.

Having some experience myself with it, I have come to the conclusion that tax records are a mess, and that fixing this problem would be most difficult.

I would probably go for the refund idea, since there would be no more taxes taken out under that plan than are now. Moreover, a sizable lump sum refund enables a person to deal with larger expenditures like going to the dentist or buying a car.

Personally, I think that SS taxes should be progressive. This was not an issue when the policy was implemented due to the nominal cost. It is, however, an issue now since SS taxes are high.

Frankly, with the unenlightened selfishness (and abysmal ignorance) that has taken over the American mentality, I see very little hope of anything constructive being done in the foreseeable future. I feel that it is far more likely that SS will be destroyed, rather than having simple changes made to it to render it more reasonable and sustainable indefinitely.

I wish I could be more hopeful, but I see a great portion of his country as being willing to destroy what benefits them in the name of some mindless propaganda or what they stupidly (and falsely) believe as being in their own interests.

PS: Rereading this post, I realize that I didn't make it clear that I think it would be better to take excess monies out in the case of multiple jobs (or whatever), and then refund the overpayment, rather than take out too little, resulting in a payment due. With some sort of progressive scheme, underpayment is more likely the case than overpayment.