Backwards Transfer is Back: Social Security’s Unfunded Liability
Awhile back we had a series of posts about the causality of Social Security’s ‘unfunded liability’ in response to a comment by Jim Glass over at Andrew Bigg’s. The first post was XXXVI: $17 Trillion Backwards Transfer. Andrew answered back with Responding to Angry Bear: Where does the $17 trillion deficit come from? to which I replied with XXXVII: Backwards Transfer: Biggs Responds
Well clearly Andrew was not convinced because he is now back with some new charts with More on How Future Deficit is Caused by Over-Generosity to Past Participants. I am still not convinced, he is trying to stick a $15 trillion dollar future tab on past extra benefits collected by a past group that only collected a portion of a total of $999.7 billion paid out by 1980. My response is over there. Feel free to add to it or contrawise explain to me in comments why I just am just not getting it.
If you want to start with the basic numbers they will be found in Table IV.B7.—Present Values of OASDI Cost Less Tax Revenue and Unfunded Obligations for Program Participants[Present values as of January 1, 2008; dollar amounts in trillions] and Table IV.B6.—Unfunded OASDI Obligations for 1935 (Program Inception) Through the Infinite Horizon[Present values as of January 1, 2008; dollar amounts in trillions] along with some definitions in the associated text. For extra credit you might consider what the implications of adopting the new CBO: Updated Long Term Projections for Social Security does in this context. Because by lowering the payroll gap going forward from 1.95% (Trustees 2007) to 1.06% (CBO 2008) you end up with trillions slashed off of future unfunded liability. Since this effect cannot in any way be attributed to new actions by past and mostly dead participants it seems to be hard to attribute those unfunded liability effects back to start with. There seems to be a fatal confusion of past and future going on here.