Give me one reason why we should do anything to Social Security

[FogerRox]

And make your case.

1) Tell me why the Trustees report makes light of the 2085 date.

2) Tell me how large the projected shortfall is, thru 2085.

3) Tell me when you think SS goes broke, if ever, and why.

Want to remove the cap, tell me how much that saves. Wanna increase FIFCA by 2% over 20 yrs, tell me how much that saves, wanna change the retirement age.........


Got it?

Not willing to take me on?

Wanna read the absolute best diary based on the 2011 Social Security Trustees Report, that I,,, Roger wrote? Want the best citations to throw in the face of some Libertarian type GOPer, who unfortunately is a relative or neighbor. I am at your service.

Previously published to Daily Kos for the Social Security Defenders. http://www.dailykos.com/story/2011/07/18/988237/-Fixing-the-economy-also-fixesSocial-Security-Thusly-the-Peoples-Budget


_____________________________________________________________________________________________________________________

Since 2005 each Social Security Trustees report that I have read describes 3 scenarios, low cost, medium cost and high cost, that tries to predict when SS will go broke. These scenarios utilize varying values for things llike GDP growth, job creation, population growth, immigration, wage growth, population health and age to generate a prediction of when SS will be broke.

In the 2011 SS trustees report, we are given the 3 scenarios in Table IV.B3. The High cost scenario says SS will be broke in 2029. The Intermediate cost scenario says 2036, and the Low cost scenario shows that SS never goes broke, in fact after 2067 SS gains assets very quickly, because it is assumed that by 2067 the Boomers are dead and will not be collecting SS benefits.

http://www.ssa.gov/oact/TR/2011/IV_B_LRest.html#396638

The High cost (2029) scenario is reliant on a number of unrealistic assumptions, It assumes GDP growth will average about 2.2% growth. This scenario assumes an economic downturn twice the length of the Depression in the 1930's, a 20 year recession. Most mainstream economic thought is that GDP growth is likely to average between 3% and 3.5%.

The Low cost scenario assumes much greater GDP growth ( about 2.8%) all focused in the bottom 80% of income earners. in order to get this prediction to work, we must make 2 key assumptions 1) widespread job creation and 2) real wage growth (above inflation) among other minor factors.

Stochastic Modeling see figure VL.E1

http://www.ssa.gov/oact/TR/2011/VI_E_stoch.html#103970.

Stohastic modeling has an advantage over a hand picked list of demographics picked by a committee in an office, plugging numbers into software. This chart shows a 97% confidence rate that SS will go broke in 2055. Simply put, if we have significant job creation, some wage growth, and the Boomers dont all live past expectancy..... then the 2055 date is very realistic.

If we have widespread job creation (right now we need 15 million jobs according to Paul Krugman) and raise median Individual income from the current 26k, 30%, back to where it was during Clinton- 38k, we will see considerable increases in FICA contributions... then that 2055 date can be pushed back even further to 2065 or 2067.

It is more than likely if we fix the economy, we also fix Social Security.

Summary of the 2011 SS Trustees report

If we leave Social Security alone it will go broke by 2055. The 2029 date requires an additional 20 years of recession, this is extremely unlikely. The 2085 date is far more realistic than the 2029 date but 2085 requires that most or all the variables go our way.

Bruce Webb from the Daily Kos Social Security defenders group has used the CBO numbers to create a worksheet that allows you to pick your SS policy to see the effect. The total SS shortfall over 75 years is considered to be .6% of GDP. To use this worksheet your choose a line, look at the second line that says "Increase the payroll tax rate by 2% over 20 years", and then look to the right at the blue bar with the number .6%. This change to SS taxes would equal the projected shortfall. Or line 7, raises the cap to 250k, this gains .5%.... 5/6ths of the shortfall.

http://2.bp.blogspot.com/_fjW71B3WLTQ/TC3Bs2undtI/AAAAAAAAAYI/PQiTSfBitWo/s1600/CBO-SS+options+Fig+1.jpg

[sabrina 1]

1. I've asked similar questions, such as 'why is SS even mentioned

in this Deficit debate, but never get an answer from the defenders of 'strengthening, trimming, fixing' or whatever the word of the day is.

I hope you are more successful. I would really like to hear an answer from the President as to why he keeps bringing up Social Security in a debate that has nothing to do with it.


Thank you for doing all this work.

:kick:

[FogerRox]

3. Good jobs fixes the economy, and adds FICA contributions

[sabrina 1]

10. Yes, I have pointed that out many times also.

I see you're not having any more luck than anyone else has had getting any answers.

I have always taken that to mean that there is simply no defense for including SS in the Deficit discussion at all.

[FogerRox]

16. No defense, The Chinese General Sun Tzu (500 BC) would never be caught with "No Defense"

Sun Tzu would expect us to win this battle.

[fascisthunter]

2. all the phony reasoning has been used up... Americans are being robbed

[FogerRox]

5. I'm going to vote for Obama, gain. But gee whiz Mr President, after folding on the Bush tax breaks

last December, do you think you can fool that many people again?

[bbgrunt]

4. because the cat food commission said so........

and now we see it being implemented despite all the avowals of hands-off by all the usual suspects.

[FogerRox]

6. I dont like cat food, Idont like "that" Commission, in fact I would suggest

cat food commission fold it 5 times and put it where the Moon dont shine........

And yes, you are right.

[FogerRox]

7. No takers, no one wants to challenge me?

[pipi_k]

8. I have a feeling

you might be looking in the wrong place for a challenge to that...

;)

[FogerRox]

9. He he he, that might be a good thing.

Lots of people have never read one of these reports, and the basic stuff is real easy to understand, And that basic understanding will blow the crap out of any other BS, even Moveon.org has sent out emails saying SS will go broke in 2037. Which its not at all clear that will happen.

[Jefferson23]

11. The reason is Obama and I'm sorry to say he doesn't have a good reason

K&R, great information FogerRox.

[FogerRox]

20. Thank you, appreciate the KnR

[PoliticAverse]

12. If you want to know _why_ they are moving to reduce the amount paid to Social Security...

recipients or raise revenue for Social Security _now_ the answer is simple.
To reduce the amount that has to be paid back to the trust fund.

All your data as to what is going to happen past 2029 isn't relevant to the
issue. It's really about now.

[NNN0LHI]

13. I have read that last year(2010) was the first time SS began paying out more than it was taking in

Is that true?

Don

[FogerRox]

15. I remember a debate about that, but looking at the first link in the OP

There is a -.92% in the combined OASDI for 2010. Chart IV.B1 Not sure, I'm guessing thats what UR referring to.

Which is really an artifact of the recession being prolonged, ie Unemployment U6 metric was well over 17% thru 2010.

[sabrina 1]

17. No, that is not true. It has happened 11 times since

SS began. Several times in the sixties and seventies and early 80s. But payroll taxes are only one source of income for SS. The interest on the Treasury Bonds is another source eg. Even with the shortfall, mainly because of the unemployment rate, last year there was still a surplus, because the interest on the Treasury Bonds was paid as it always is.

[FogerRox]

18. FICA vs costs, not counting trust fund interest

[indurancevile]

21. no, it's happened before.

[Agony]

14. Kick/Rec

thx Foger! this helps...

cheers!
Agony

[FogerRox]

19. Thank you !

[truedelphi]

22. Too late for the K & R. Thanks so much for all the work on this.

Really great piece.

Sadly, the RW and all their minions, including the ministers at RW "Christian" Churches, have younger people believing that SS is a total handout for the totally undeserving.

One of the 19 yr old barristas at the local coffee shop was talking down Social Security (And this was like four years back.)

When I said to her, "As an independent contractor, I have paid over fifteen percent of my income into the fund, since I was your age, and it is a totally solvent fund," she looked confused.

So I explained the program to her.

Really, she had never even noticed the huge seven percent FICA that took a clip out of her pay check every two weeks. She was that willing to believe everything she had been told.

By the time I left the shop, I think she was converted over to our side, at lest on this one issue.