Just as I thought the Clown Show at the National Review could not get funnier, Luskin exceeds expectations:
The Social Security crisis begins to materialize in just 5 years…Here are the facts. You decide whether they amount to a “crisis.”… he surplus will keep getting bigger and bigger through 2008, when it will reach $108 billion….But in 2009, just 5 years from now, the surplus will start to shrink. In 2009 it will fall to $103.7 billion, and in that year the federal government will have to go to the capital markets to raise $4.3 billion that it didn’t have to raise the year before. That’s not a lot of money in the grand governmental scheme of things. But it’s an important turning point for Social Security — it’s the year the crisis begins.
Never mind the fact that revenues will exceed expenditures for another decade and that interest income will exceed the difference between expenditures and revenues after that. Never mind the fact that the Trust Fund will have reserves sufficient to last until 2052, the system goes bankrupt as soon as the surplus hits its peak.
Mathematical Appendix: President Bush says the Trust Fund will be “flat broke” circa 2042 when it is projected (pessimistic scenario) to have zero reserves (R). Actually, the system will still have the continuing payroll contributions so “flat broke” is a little loose. But Bush’s definition of the crisis date seems to be when the first derivative of R turns negative even that R will be close to $8 trillion at that point (actually the first derivative of R is projected to still be positive even after 2018). So Luskin’s definition of the crisis date is when the second derivative of R flips from positive to negative. Huh?