In comments, Bruce Webb tells us he has links to theAnalysis of the SS Trustee’s report up.
First consider the Cost of Nothing.
The 2005 Report projected a payroll gap up from 2004, to 1.92% from 1.89%. Which is what you would expect, problem left unaddressed got worse. But if you quantified it you ended up with 1.89% of your income left in your pocket compared with an additional .03% obligation going forward. Well that means that anyone less than 63 years from retirement was dollars ahead by doing nothing. The math is even more stark if the payroll gap drops as it did in this Report.
The payroll gap was 2.23% in 1997 when I first started downloading the Report. Each and every year I looked at the numbers and implicitly calculated the Cost of Nothing. It always came out as a positive number.
If we had listened to the crisismongers in 1997 each and every one of us would have had an additional 2.23% out of our wage and 1.12% out of our paycheck. In effect Nothing was a decade long tax cut for workers.
Nothing is a Plan. A proven Plan. The 2007 Report simply validates that Plan.
There is a word for a problem that left unaddressed on balance gets a little bit better every year that passes. That word is not ‘Crisis’. Leave Social Security alone. Leave the cap alone. Social Security is healing itself.
Well this will be a busy morning. I just moved my blog from old blogspot to new google which had the side effect of enabling comments. So we will see how that goes.
For now I put up a 2007 page that is limited to links through to the HTML version of the 2007 Report. So if I ever say cite Table V.B1 and don’t link to it you can simply click on List of Tables and check for yourself. Actually that is why I set up the blog in the first place, it was a convenient place to cut links from to paste in comments.
Now my favorite Figure is II.D7. It plots the Trust Fund Ratio by year in graphic form for all three alternatives. It allows you to visually see the important bend points. As an example Intermediate Cost (curve II on the graph) is a nice parabola peaking at 2017 at a 400% Trust Fund Ratio and then sinking to nothing in (now) 2041.
More interesting to me though is the curve represented by ‘I’. That is Low Cost. It peaks at just under 500% in 2019, plateaus there until about 2023, drops to 400% in 2040, is relatively flat until 2070 when it actually starts trending up at a rate significantly steeper than the 2006 Report.
If we hit Low Cost numbers then Nothing will be a proven plan. Now taking the entirety of the data set some elements of Low Cost are fairly pessimistic, I think 2.0% ultimate Productivity is certainly reachable, and the Immigration numbers are nonsense. On the other hand I have to admit that 4.5% ultimate Unemployment is kind of optimistic. But on balance at worst the curve is going to come out somewhat farther out than ‘II’s 2041. Will it actually come out with ‘I’s fully funded with no change in benefits, retirement age, cap or tax rate? I don’t know. But there is almost zero risk to punting any decision down the road a year.