In 1997 the social security trustees predicted trust fund emptied in 2029. Now? 2037.

[Hannah Bell]

Here it is, 13 years later, & the date for exhaustion has been pushed 8 years into the future. Supposedly there was a 2.23% deficit over 75 years.

What if they'd raised your taxes & retirement age & cut your benefits on the basis of the 1997 forecast?

In 2004, it was supposed to be empty in 2042, with only a 1.8% 75-year-deficit.

What's changed? Did they lower SS taxes?

No, we're in the middle of the biggest, longest recession since the great depression. And that's part of the basis for the projections.

Do you really think a 75-year economic forecast has any predictive value?

I don't.

http://www.cbpp.org/cms/index.cfm?fa=view&id=1714


In the last twenty years of reports, the estimated date of depletion of the Social Security trust fund has been as early as 2029 and as late as 2048. Moving from 2041 to 2037, especially in the current economic environment, simply is not big news.

In addition, public discussions about Social Security almost never take note of two complicating factors. First, in addition to the Social Security trustees, the Congressional Budget Office (CBO) also estimates the depletion date of the Social Security Trust Fund.

Last summer, shortly after the trustees estimated that the trust fund would be depleted in 2041, the CBO estimated the depletion date to be 2049, eight years later than the trustees' estimate.

A few years before, when the trustees were guessing that depletion would occur in 2042, the CBO's best estimate was that it would happen ten years later, in 2052. The precision of these estimates is, in other words, easy to overstate.

http://writ.news.findlaw.com/commentary/20090521_buchanan.html



PS: you should also know: the trustees make 3 forecasts: 1 optimistic, 1 pessimistic, & one supposedly "middle of the road".

the short-term predictions of the optimistic one have come to pass more than any of the others.

that's the forecast that predicts the trust fund never runs out of money.

http://2.bp.blogspot.com/_fjW71B3WLTQ/SiLde2UaOkI/AAAAAAAAAPE/CiD4NEdmI-A/s400/2009+Fig+IV.B3.jpg

[Hannah Bell]

1. SSA is apparently sending out benefit statements to young people telling them the system will be

"bankrupt" --

nice use of government money to catapult the propaganda.

For example, last Spring I was standing at a bus stop in Washington, D.C., where another person in line was having a (loud) conversation on her cell phone. She appeared to be recently out of college, and she was telling her friend that she had just received her annual statement from the Social Security system. After stating the estimated benefit that she would receive if she retired at age 67, she said, "But there was an asterisk, which said: ‘The system will be bankrupt in 2041.' So I won't get any money by the time I retire.'

This is a misunderstanding that Social Security should take pains to avoid, by being clearer on its statements about what the real situation will be. Granted, the annual statements do not say that Social Security will be "bankrupt' or "broke.' They say that the trust fund "will be exhausted' on a particular date. Even so, it is not too surprising that young people might misunderstand and conclude that the system will be gone before they retire. It is important for them (and all of us) to know, however, that this is definitively not true...

Even so, because benefits are projected to rise each year, even a 24% cut in thirty years would leave those future beneficiaries with higher benefits than Social Security recipients receive today (adjusted for inflation). If there is an argument that benefits and taxes need to be adjusted immediately to avoid future "insolvency,' we must take into account that both incomes and benefits will be higher in those years.

In short, invocations of doomsday scenarios in which we are to believe that Social Security will go belly up and disappear are – even in the context of today's deep recession – utterly false. Under current law, the worst that can happen is that benefits will have to be adjusted automatically downward at some future date, leaving future beneficiaries with benefits that nevertheless will have more buying power than those received by their grandparents.


http://writ.news.findlaw.com/commentary/20090521_buchanan.html


Neil H. Buchanan, J.D. Ph. D. (economics), is an Associate Professor at The George Washington University Law School, where he teaches tax law and policy.

[doc03]

2. Didn't they raise our taxes, retirement age and

reduce our benefits on the basis of the 1997 forecast? When I started my work life back in the late 60s I would pay up my SS taxes for the year by November working a middle class Union job. At that time if a person on a Union job retired he would usually get the maximum benefit. Today you have to make over $100,000 a year to pay up your SS tax or to get the maximum benefit. When I started working full retirement age was 65 and it was raised to 67 after the 97 forecast wasn't it? Wasn't the formula for COLA increases revised so it pays less? In addition to that if you get a COLA increase of say 3% the Medicare premiums eat most of that up.

weekly Pay stub from 1966:

Gross pay $84.00
IRS $13.13
SS $3.52
State $1.82
Med. Ins. $1.93
Net $63.60

[Hannah Bell]

5. no. that was 1983, under reagan. the already-scheduled increases were accelerated,

and have been at 6.2% since 1990.

http://www.socialsecurity.gov/OACT/ProgData/taxRates.html

reagan was also responsible for the raise in the retirement age, also a result of the 1983 amendments, as was the institution of taxation on SS benefits:

http://ssa.gov/pubs/ageincrease.htm

[doc03]

7. You're right I get my 90s and 80s mixed up sometimes,

I have an excuse I am old and on SS. I just love to rub that one in about taxing SS when a Republican complains about it. I think Raygun also started taxing unemployment benefits.

[Bitwit1234]

3. If the fund had not bee raided since Reagan's time

and billions in IOU's laying unpaid social security would be solvent for years and years to come. Why dont' they pay that money back. And shut the hell up about social security going broke. The government did it.

[doc03]

4. The American people voted Republicans in office

because they promised tax cuts, well that money had to come from someplace. That's like in Ohio, this year our state is broke and Republican John Kasich has pledged he won't raise taxes if elected. I have seen this same game played for decades in Ohio the Republicans lower taxes and bankrupt the state. A Democrat gets elected and raises taxes to get the house in order and gets voted out next election, it is an endless cycle.

[Hannah Bell]

6. it wasn't raided. all surplus collections, by law, must be put into the SS trust fund

in exchange for US securities. this is in the original legislation.

the bipartisan congress of 1983 passed the accelerated tax hikes in full knowledge of that law, knowing that the surplus collections would be "borrowed" into the general budget.

that was the plan from day one.

had they spent the borrowed money on anything except 30 years of top-bracket tax cuts, more war & bailouts for the finance sector, i wouldn't be so angry about it.

[doc03]

8. Wasn't that the Conservative's plan from the get go

"Starve the Beast"? Run up so much debt the current system can't be maintained?

[Hannah Bell]

9. yes, imo. but it wasn't just conservatives.

take a look at the roll call on who voted for it, 163 democrats in the house & 26 democrats in the senate.

notice liberal lights eagleton, kennedy, hart, packwood etc. are "absent" on this crucial vote, and do not, unlike the conservatives goldwater, etc. record how they would vote had they been present.

leahy voted for it.

who voted against it?

dellums
surprise: gingrich
looks like some paleo-cons in the senate

http://www.ssa.gov/history/tally1983.html

[old mark]

10. It is all scare tactics and bullshit - there is no problem with the fund.

They want people to be scared and confused-we are easy to manipulate that way.

mark

[Zenlitened]

11. K&R. Hannah Bell, you've been doing a terrific job cutting through the propaganda!

:applause:

[Starry Messenger]

12. k & r