Thanks Dean. I got up this morning with the intent of asking you to comment on the new CBO projection and here you are, at least in part. But as interesting as the new date for Trust Fund depletion and the little known fact that real benefits under the schedule are better than current benefits even under the Trustees projections (following Prof. Rosser I have been trying to push this point for a long time, nice to have CBO's authority to back me up) but what struck me was the paragraph in the Director's Blog announcing the release: CBO Director's Blog: Long term projections for Social Security: innovations in presenting uncertainty

Today we released a paper on updated long-term projection for Social Security. (Our last long-term projection for social security was included in the December 2007 Long-Term Budget Outlook.) As CBO has highlighted in previous reports, the number of Social Security beneficiaries will grow considerably as the baby boomers become eligible for retirement benefits. Absent legislative changes, spending for the program will therefore climb substantially and exceed the program’s revenues. CBO projects that the 75-year actuarial imbalance in the program amounts to 0.38 percent of GDP, or 1.06 percent of taxable payroll.

It would be extraordinarily valuable to me and I am sure to others to see this new number expressed in terms of PV unfunded liability over the 75 year actuarial window and over Infinite Future, currently set per the Trustees at $4.3 trillion and $13.6 trillion respectively. The change from 1.95% payroll gap in the 2007 to 1.7% in the 2008 Report dropped the 75 year liability from $4.7 trillion to $4.3 trillion or just about 12%. You would think that a drop in the gap on the order of 2 1/2 times .25% drop that would have a corresponding impact on unfunded liability but I am not confident enough in my mathematical understanding to provide a number.

Considering that IOUSA is using scary PV numbers to sell crisis, it would be nice to have something based on the new CBO projection to throw back at them.

So brother, can you spare a number?

Thanks

Did you mean to link to the Ignatius column? I couldn't find anything about SS in it.

Thanks for pointing that out. When I read that sentence by Ignatius - tucked into the middle of an essay on a totally different topic - I was quite surprised. Although I shouldn't be by now.

Oops. Now I am informed that Social Security is facing bankruptcy is a "reality." That would explain why no space was wasted with proofs, qualifiers, or mentions of controversy. Other realities are that Social Security is our most securely funded federal program--especially when compared to the general fund--and that the Washington Post faces more existential financial risk over the next 40 years than does Social Security.

Those CBO projections are pure guess-work and unreliable... but no doubt comforting to the many enthusiasts of socialized pension & welfare schemes.

CBO forecast errors increase exponentially the farther out one goes in future years; beyond a few years, anyone's estimate of the Federal budget, American economy, and Social Security 'numbers' becomes worthless.
A 20-30 year forecast is fantasy... but the current Social Security trend toward insolvency is obvious.

The CBO has a record of making huge errors in even short-term forecasts... such as their estimates of the Federal Budget surplus. In year 2000 the Congressional Budget Office issued its official '10-year Federal Surplus Estimate' as $5.6 Trillion. In 2001, they slightly revised that number to $3 Trillion; the 2002 estimate was adjusted down to $1 Trillion. By 2004, it was a 'negative' $2.4 Trillion.

So the CBO forecast was off by a mere $10,000,000,000,000. -- over a 4 year period.... and we're supposed to believe their forecast for year 2049 relative to Social Security. NOT !

Palmer did you ever stop to think that CBO works off of current law? That maybe those revisions might have somthing to do with Bush tax cuts and wars in Afghanistan and then Iraq that blew a hole in projected Clinton surpluses?

I've sent the following to D. Ignatius: "I think you [Ignatius and the Post] should run a correction; Social Security is not facing "bankruptcy" by any standard, unless you define bankruptcy as a potential, very minor, easily managed and historically unexceptional shortfall about four decades from now. Of course, there is the real possibility that Social Security will be purposefully bankrupted by those who put stock in contentions like yours, or pretend to. But there are also a lot of folks like me who both understand the system's (very healthy) finances and will soon depend on SS benefits to keep us out of poverty, and we're not going to sit back while the lies and distortions multiply.

There is another explanation for the disappearing surplus that the CBO forecast in 2000. Fiscal mismanagement by our elected officials.

It took extreme action by our government representatives only four years to turn an eight year period of declining deficits and an eventual surplus into the massive deficit we now face.

The reason they are taking notice this time is the target: Obama, a president who has cross-racial appeal. The protests have been more than black folks -- and that will affect Murdoch's wallet. Thus, his apology.

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