That’s the headline and lede…where are the interesting parts?
by Reader Jack
From the NY Times yesterday:
“Social Security to See Payout Exceed Pay-In This Year”
That’s the headline.
The interesting parts are buried deep. In the print edition one has to go not just below the fold, but to the inside pages to find the meat of the story. Superficially it would appear the the Times is reporting new and dramatic findings, but the article soon makes it quite clear that while current benefits are beginning to out pace payroll (FICA)taxes those outlays are still not a deficit because of the interest earned yearly by the Trust Fund.
“For accounting purposes, the system’s accumulated revenue is placed in Treasury securities. In a year like this, the paper gains from the nterest earned on the securities will more than cover the difference between what it takes in and pays out. Mr. Goss, the actuary, emphasized that even the $29 billion shortfall projected for this year was small, relative to the roughly $700 billion that would flow in and out of the system. The system, he added, has a balance of about $2.5 trillion that will take decades to deplete. Mr. Goss said that large cushion could start to grow again if the economy recovers briskly.”
And why the panicky lede when again deeper into the body of the story we find there are no surprises and things are goiong as expected for the past three decades.
“Indeed, the Congressional Budget Office’s projection shows the ravages of the recession easing in the next few years, with small surpluses reappearing briefly in 2014 and 2015. After that, demographic forces are expected to overtake the fund, as more and more baby boomers leave the work force, stop paying into the program and start collecting their benefits. At that point, outlays will exceed revenue every year, no matter how well the economy performs.”
And best of all, one might surmise from the lede and first several paragraphs that it’s Social Security that is bringing the economy to ruins. But again we read deep and what to find?
“The United States’ soaring debt — propelled by tax cuts, wars and large expenditures to help banks and the housing market — has become a hot issue as Democrats gauge their vulnerability in the coming elections. President Obama has appointed a bipartisan commission to examine the debt problem, including Social Security, and make recommendations on how to trim the nation’s debt by Dec. 1, a few weeks after the midterm Congressional elections.”
Of course in spite of the actual causes of our government’s deficit “problems,” if they can be truly deemed as problems, the Times can only find one basis for economic survival. Take it out of the hides of the formerl;y working stiffs.
“The long-term costs of Social Security present further problems for politicians, who are already struggling over how to reduce the nation’s debt. The national predicament echoes that of many European governments, which are facing market pressure to re-examine their commitments to generous pensions over extended retirements.”
Note the tell tale reference for what drives all decision making these days, “facing market pressure.” And true to their often hyperbolic approach, the link for the term “facing market pressure” brings the reader to this scary article and photo. (see link)
What more need be said? There is no emergency as the full article makes clear, but the implied disasture is fast upon us if one ignores the facts provided. The Times does know how to skirt an issue and walk both sides of the fence. One can only hope that Keller and Sulzberger slip and that the fence posts catch them where it hurts.
_______________________________
by Reader Jack
Stephen Goss, chief actuary of the Social Security Administration, is only telling part of the story.
Goss and his crew projected last May that the SSA combined trust funds (OASDI) would have a positive cash flow of $27.3 billion for FY 2009. Four months later when the fiscal year closed, the SSA had misread the situation by $7.9 billion as the fiscal year positive cash flow was only $19.358 billion. That’s a 29% projection error.
Moreover, the SSA projection for FY 2010 was $16.4 billion in positive cash flow. The CBO is projecting a negative cash flow of $29 billion for FY 2010. While Goss is emphasizing correctly that the projected $29 billion cash flow shortfall is small in comparison to the overall flow of funds by the SSA, he may not have told the reporter that the projected FY 2010 SSA cash flow hit is now $45.4 billion as compared to the May 2009 SSA projections, monies of which will be borrowed by the Treasury to cover the shortfall. Glossing over an additional $16.4 billion is apparently no big deal.
I can appreciate that Goss probably doesn’t want to discuss the $211.2 billion net negative cash flow through FY2015 projected by CBO, all years of which were projected by Goss last May to be cash flow positive to the tune of $136.9 billion. It not much fun to have to explain away a difference of $348.1 billion in lost cash flow.
Comparing the SSA combined trust funds (OASDI) cash flow projections provided by the SSA in its May 2009 annual report and the latest CBO projections is worthwhile.
CBO’s projections indicate a net decrease of $211.2 billion in projected OASDI cash flow for FY2009-2015, followed by a projected net increase of $46.4 billion for FY 2016-2018 in comparison to projections stated by the SSA last May.
SSA Combined Trust Funds (OASDI) Cash Flow Projections
Combined OASDI Trust Funds (OASDI)
SSA May 2009 Annual Report cash flow projections
Intermediate Cost
FY 2009 +$27.3 billion
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
FY 2009-2018 Total +$66.8 billion
—-
Combined OASDI Trust Funds (OASDI)
CBO March 2010 Baseline cash flow projections
FY 2009 +$19 billion (+$19.358 billion actual)
FY 2010 -$29 billion
FY 2011 -$21 billion
FY 2012 -$13 billion
FY 2013 -$4 billion
FY 2014 +$5 billion
FY 2015 +$4 billion
FY 2016 -$5 billion
FY 2017 -$19 billion
FY 2018 -$36 billion
FY 2019 -$57 billion
FY 2020 -$77 billion
FY 2010-2020 Total -$247 billion
—
Comparison between SSA May 2009 annual report
and CBO March 2010 Baseline cash flow projections
FY 2009 -$7.9 billion
FY 2010 -$45.4 billion
FY 2011 -$51.4 billion
FY 2012 -$48.4 billion
FY 2013 -$39.7 billion
FY 2014 -$17.1 billion
FY 2015 -$1.3 billion
FY 2016 +$2.8 billion
FY 2017 +$16.8 billion
FY 2018 +26.8 billion
FY 2009-2018 Total -$164.8 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2010b/OASDI-TrustFunds.pdf
.
Comparing the SSA combined trust funds (OASDI) cash flow projections provided by the SSA in its May 2009 annual report and the latest CBO projections is worthwhile.
CBO’s projections indicate a net decrease of $211.2 billion in projected OASDI cash flow for FY2009-2015, followed by a projected net increase of $46.4 billion for FY 2016-2018 in comparison to projections stated by the SSA last May.
SSA Combined Trust Funds (OASDI) Cash Flow Projections
Combined OASDI Trust Funds (OASDI)
SSA May 2009 Annual Report cash flow projections
Intermediate Cost
FY 2009 +$27.3 billion
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
FY 2009-2018 Total +$66.8 billion
—-
Combined OASDI Trust Funds (OASDI)
CBO March 2010 Baseline cash flow projections
FY 2009 +$19 billion (+$19.358 billion actual)
FY 2010 -$29 billion
FY 2011 -$21 billion
FY 2012 -$13 billion
FY 2013 -$4 billion
FY 2014 +$5 billion
FY 2015 +$4 billion
FY 2016 -$5 billion
FY 2017 -$19 billion
FY 2018 -$36 billion
FY 2019 -$57 billion
FY 2020 -$77 billion
FY 2010-2020 Total -$247 billion
—
Comparison between SSA May 2009 annual report
and CBO March 2010 Baseline cash flow projections
FY 2009 -$7.9 billion
FY 2010 -$45.4 billion
FY 2011 -$51.4 billion
FY 2012 -$48.4 billion
FY 2013 -$39.7 billion
FY 2014 -$17.1 billion
FY 2015 -$1.3 billion
FY 2016 +$2.8 billion
FY 2017 +$16.8 billion
FY 2018 +26.8 billion
FY 2009-2018 Total -$164.8 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2010b/OASDI-TrustFunds.pdf
.
Comparing the SSA combined trust funds (OASDI) cash flow projections provided by the SSA in its May 2009 annual report and the latest CBO projections is worthwhile.
CBO’s projections indicate a net decrease of $211.2 billion in projected OASDI cash flow for FY2009-2015, followed by a projected net increase of $46.4 billion for FY 2016-2018 in comparison to projections stated by the SSA last May.
SSA Combined Trust Funds (OASDI) Cash Flow Projections
Combined OASDI Trust Funds (OASDI)
SSA May 2009 Annual Report cash flow projections
Intermediate Cost
FY 2009 +$27.3 billion
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
FY 2009-2018 Total +$66.8 billion
—-
Combined OASDI Trust Funds (OASDI)
CBO March 2010 Baseline cash flow projections
FY 2009 +$19 billion (+$19.358 billion actual)
FY 2010 -$29 billion
FY 2011 -$21 billion
FY 2012 -$13 billion
FY 2013 -$4 billion
FY 2014 +$5 billion
FY 2015 +$4 billion
FY 2016 -$5 billion
FY 2017 -$19 billion
FY 2018 -$36 billion
FY 2019 -$57 billion
FY 2020 -$77 billion
FY 2010-2020 Total -$247 billion
—
Comparison between SSA May 2009 annual report
and CBO March 2010 Baseline cash flow projections
FY 2009 -$7.9 billion
FY 2010 -$45.4 billion
FY 2011 -$51.4 billion
FY 2012 -$48.4 billion
FY 2013 -$39.7 billion
FY 2014 -$17.1 billion
FY 2015 -$1.3 billion
FY 2016 +$2.8 billion
FY 2017 +$16.8 billion
FY 2018 +26.8 billion
FY 2009-2018 Total -$164.8 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2010b/OASDI-TrustFunds.pdf
.
Stephen Goss, chief actuary of the Social Security Administration, is only telling part of the story.
Goss and his crew projected last May that the SSA combined trust funds (OASDI) would have a positive cash flow of $27.3 billion for FY 2009. Four months later when the fiscal year closed, the SSA had misread the situation by $7.9 billion as the fiscal year positive cash flow was only $19.358 billion. That’s a 29% projection error.
Moreover, the SSA projection for FY 2010 was $16.4 billion in positive cash flow. The CBO is projecting a negative cash flow of $29 billion for FY 2010. While Goss is emphasizing correctly that the projected $29 billion cash flow shortfall is small in comparison to the overall flow of funds by the SSA, he may not have told the reporter that the projected FY 2010 SSA cash flow hit is now $45.4 billion as compared to the May 2009 SSA projections, monies of which will be borrowed by the Treasury to cover the shortfall. Glossing over an additional $16.4 billion is apparently no big deal.
I can appreciate that Goss probably doesn’t want to discuss the $211.2 billion net negative cash flow through FY2015 projected by CBO, all years of which were projected by Goss last May to be cash flow positive to the tune of $136.9 billion. It not much fun to have to explain away a difference of $348.1 billion in projected lost cash flow.
Comparing the SSA combined trust funds (OASDI) cash flow projections provided by the SSA in its May 2009 annual report and the latest CBO projections is worthwhile.
CBO’s projections indicate a net decrease of $211.2 billion in projected OASDI cash flow for FY2009-2015, followed by a projected net increase of $46.4 billion for FY 2016-2018 in comparison to projections stated by the SSA last May.
SSA Combined Trust Funds (OASDI) Cash Flow Projections
Combined OASDI Trust Funds (OASDI)
SSA May 2009 Annual Report cash flow projections
Intermediate Cost
FY 2009 +$27.3 billion
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
FY 2009-2018 Total +$66.8 billion
—-
Combined OASDI Trust Funds (OASDI)
CBO March 2010 Baseline cash flow projections
FY 2009 +$19 billion (+$19.358 billion actual)
FY 2010 -$29 billion
FY 2011 -$21 billion
FY 2012 -$13 billion
FY 2013 -$4 billion
FY 2014 +$5 billion
FY 2015 +$4 billion
FY 2016 -$5 billion
FY 2017 -$19 billion
FY 2018 -$36 billion
FY 2019 -$57 billion
FY 2020 -$77 billion
FY 2010-2020 Total -$247 billion
—
Comparison between SSA May 2009 annual report
and CBO March 2010 Baseline cash flow projections
FY 2009 -$7.9 billion
FY 2010 -$45.4 billion
FY 2011 -$51.4 billion
FY 2012 -$48.4 billion
FY 2013 -$39.7 billion
FY 2014 -$17.1 billion
FY 2015 -$1.3 billion
FY 2016 +$2.8 billion
FY 2017 +$16.8 billion
FY 2018 +26.8 billion
FY 2009-2018 Total -$164.8 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2010b/OASDI-TrustFunds.pdf
Comparing the SSA combined trust funds (OASDI) cash flow projections provided by the SSA in its May 2009 annual report and the latest CBO projections is worthwhile.
CBO’s projections indicate a net decrease of $211.2 billion in projected OASDI cash flow for FY2009-2015, followed by a projected net increase of $46.4 billion for FY 2016-2018 in comparison to projections stated by the SSA last May.
SSA Combined Trust Funds (OASDI) Cash Flow Projections
Combined OASDI Trust Funds (OASDI)
SSA May 2009 Annual Report cash flow projections
Intermediate Cost
FY 2009 +$27.3 billion
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
FY 2009-2018 Total +$66.8 billion
—-
Combined OASDI Trust Funds (OASDI)
CBO March 2010 Baseline cash flow projections
FY 2009 +$19 billion (+$19.358 billion actual)
FY 2010 -$29 billion
FY 2011 -$21 billion
FY 2012 -$13 billion
FY 2013 -$4 billion
FY 2014 +$5 billion
FY 2015 +$4 billion
FY 2016 -$5 billion
FY 2017 -$19 billion
FY 2018 -$36 billion
FY 2019 -$57 billion
FY 2020 -$77 billion
FY 2009-2020 Total -$228 billion
—
Comparison between SSA May 2009 annual report
and CBO March 2010 Baseline cash flow projections
FY 2009 -$7.9 billion
FY 2010 -$45.4 billion
FY 2011 -$51.4 billion
FY 2012 -$48.4 billion
FY 2013 -$39.7 billion
FY 2014 -$17.1 billion
FY 2015 -$1.3 billion
FY 2016 +$2.8 billion
FY 2017 +$16.8 billion
FY 2018 +26.8 billion
FY 2009-2018 Total -$164.8 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2010b/OASDI-TrustFunds.pdf
.
Comparing the SSA combined trust funds (OASDI) cash flow projections provided by the SSA in its May 2009 annual report and the latest CBO projections is worthwhile.
CBO’s projections indicate a net decrease of $211.2 billion in projected OASDI cash flow for FY2009-2015, followed by a projected net increase of $46.4 billion for FY 2016-2018 in comparison to projections stated by the SSA last May.
SSA Combined Trust Funds (OASDI) Cash Flow Projections
Combined OASDI Trust Funds (OASDI)
SSA May 2009 Annual Report cash flow projections
Intermediate Cost
FY 2009 +$27.3 billion
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
FY 2009-2018 Total +$66.8 billion
—-
Combined OASDI Trust Funds (OASDI)
CBO March 2010 Baseline cash flow projections
FY 2009 +$19 billion (+$19.358 billion actual)
FY 2010 -$29 billion
FY 2011 -$21 billion
FY 2012 -$13 billion
FY 2013 -$4 billion
FY 2014 +$5 billion
FY 2015 +$4 billion
FY 2016 -$5 billion
FY 2017 -$19 billion
FY 2018 -$36 billion
FY 2019 -$57 billion
FY 2020 -$77 billion
FY 2009-2020 Total -$228 billion
—
Combined OASDI Trust Funds (OASDI)
Comparison between SSA May 2009 annual report
and CBO March 2010 Baseline cash flow projections
FY 2009 -$7.9 billion
FY 2010 -$45.4 billion
FY 2011 -$51.4 billion
FY 2012 -$48.4 billion
FY 2013 -$39.7 billion
FY 2014 -$17.1 billion
FY 2015 -$1.3 billion
FY 2016 +$2.8 billion
FY 2017 +$16.8 billion
FY 2018 +26.8 billion
FY 2009-2018 Total -$164.8 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2010b/OASDI-TrustFunds.pdf
.
Stephen Goss, chief actuary of the Social Security Administration, is only telling part of the story.
Goss and his crew projected last May that the SSA combined trust funds (OASDI) would have a positive cash flow of $27.3 billion for FY 2009. Four months later when the fiscal year closed, the SSA had misread the situation by $7.9 billion as the fiscal year positive cash flow was only $19.358 billion. That’s a 29% projection error.
Moreover, the SSA projection for FY 2010 was $16.4 billion in positive cash flow. The CBO is projecting a negative cash flow of $29 billion for FY 2010. While Goss is emphasizing correctly that the projected $29 billion cash flow shortfall is small in comparison to the overall flow of funds by the SSA, he may not have told the reporter that the projected FY 2010 SSA cash flow hit is now $45.4 billion as compared to the May 2009 SSA projections, monies of which will be borrowed by the Treasury to cover the shortfall. Glossing over an additional $16.4 billion is apparently no big deal.
I can appreciate that Goss probably doesn’t want to discuss the $211.2 billion net negative cash flow through FY2015 projected by CBO, all years of which were projected by Goss last May to be cash flow positive to the tune of $136.9 billion.
Comparing the SSA combined trust funds (OASDI) cash flow projections provided by the SSA in its May 2009 annual report and the latest CBO projections is worthwhile.
CBO’s projections indicate a net decrease of $211.2 billion in projected OASDI cash flow for FY2009-2015, followed by a projected net increase of $46.4 billion for FY 2016-2018 in comparison to projections stated by the SSA last May.
SSA Combined Trust Funds (OASDI) Cash Flow Projections
Combined OASDI Trust Funds (OASDI)
SSA May 2009 Annual Report cash flow projections
Intermediate Cost
FY 2009 +$27.3 billion
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
FY 2009-2018 Total +$66.8 billion
—-
Combined OASDI Trust Funds (OASDI)
CBO March 2010 Baseline cash flow projections
FY 2009 +$19 billion (+$19.358 billion actual)
FY 2010 -$29 billion
FY 2011 -$21 billion
FY 2012 -$13 billion
FY 2013 -$4 billion
FY 2014 +$5 billion
FY 2015 +$4 billion
FY 2016 -$5 billion
FY 2017 -$19 billion
FY 2018 -$36 billion
FY 2019 -$57 billion
FY 2020 -$77 billion
FY 2009-2020 Total -$228 billion
—
Combined OASDI Trust Funds (OASDI)
Comparison between SSA May 2009 annual report
and CBO March 2010 Baseline cash flow projections
FY 2009 -$7.9 billion
FY 2010 -$45.4 billion
FY 2011 -$51.4 billion
FY 2012 -$48.4 billion
FY 2013 -$39.7 billion
FY 2014 -$17.1 billion
FY 2015 -$1.3 billion
FY 2016 +$2.8 billion
FY 2017 +$16.8 billion
FY 2018 +26.8 billion
FY 2009-2018 Total -$164.8 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2010b/OASDI-TrustFunds.pdf
.
Stephen Goss, chief actuary of the Social Security Administration, is only telling part of the story.
Goss and his crew projected last May that the SSA combined trust funds (OASDI) would have a positive cash flow of $27.3 billion for FY 2009. Four months later when the fiscal year closed, the SSA had misread the situation by $7.9 billion as the fiscal year positive cash flow was only $19.358 billion. That’s a 29% projection error.
Moreover, the SSA projection for FY 2010 was $16.4 billion in positive cash flow. The CBO is projecting a negative cash flow of $29 billion for FY 2010. While Goss is emphasizing correctly that the projected $29 billion cash flow shortfall is small in comparison to the overall flow of funds by the SSA, he may not have told the reporter that the projected FY 2010 SSA cash flow hit is now $45.4 billion as compared to the May 2009 SSA projections, monies of which will be borrowed by the Treasury to cover the shortfall. Glossing over an additional $16.4 billion is apparently no big deal.
I can appreciate that Goss probably doesn’t want to discuss the $211.2 billion net negative cash flow through FY2015 projected, all years of which were projected by Goss last May to be cash flow positive to the tune of $136.9 billion.
Comparing the SSA combined trust funds (OASDI) cash flow projections provided by the SSA in its May 2009 annual report and the latest CBO projections is worthwhile.
CBO’s projections indicate a net decrease of $211.2 billion in projected OASDI cash flow for FY2009-2015, followed by a projected net increase of $46.4 billion for FY 2016-2018 in comparison to projections stated by the SSA last May.
SSA Combined Trust Funds (OASDI) Cash Flow Projections
Combined OASDI Trust Funds (OASDI)
SSA May 2009 Annual Report cash flow projections
Intermediate Cost
FY 2009 +$27.3 billion
FY 2010 +$16.4 billion
FY 2011 +$30.4 billion
FY 2012 +$35.4 billion
FY 2013 +$35.7 billion
FY 2014 +$22.1 billion
FY 2015 +$5.3 billion
FY 2016 -$7.8 billion
FY 2017 -$35.8 billion
FY 2018 -$62.2 billion
FY 2009-2018 Total +$66.8 billion
—-
Combined OASDI Trust Funds (OASDI)
CBO March 2010 Baseline cash flow projections
FY 2009 +$19 billion (+$19.358 billion actual)
FY 2010 -$29 billion
FY 2011 -$21 billion
FY 2012 -$13 billion
FY 2013 -$4 billion
FY 2014 +$5 billion
FY 2015 +$4 billion
FY 2016 -$5 billion
FY 2017 -$19 billion
FY 2018 -$36 billion
FY 2019 -$57 billion
FY 2020 -$77 billion
FY 2009-2020 Total -$228 billion
—
Combined OASDI Trust Funds (OASDI)
Comparison between SSA May 2009 annual report
and CBO March 2010 Baseline cash flow projections
FY 2009 -$7.9 billion
FY 2010 -$45.4 billion
FY 2011 -$51.4 billion
FY 2012 -$48.4 billion
FY 2013 -$39.7 billion
FY 2014 -$17.1 billion
FY 2015 -$1.3 billion
FY 2016 +$2.8 billion
FY 2017 +$16.8 billion
FY 2018 +26.8 billion
FY 2009-2018 Total -$164.8 billion
—-
Source data:
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
http://www.cbo.gov/budget/factsheets/2010b/OASDI-TrustFunds.pdf
.
So MG, are you saying that the Trustee’s Reports and projections do not agree with the CBO reports and projections? If that is your point, why take one pkrojection as any more accurate than another? What is it that is most likely to account for the differences? Given the margin of errors that have occured in regards to so many economic projections of macro performance,
why should the Congress run amuk with plans for a repair job on a program that can’t consistenlty be shown to be broken.
You also missed the underlying point which appears to have been inadvertently imbedded in the Times article. The general budget is a mess not because of Social Security imbalances, or Medicare deficits for that matter. Read the fine print,
“The United States’ soaring debt — propelled by tax cuts, wars and large expenditures to help banks and the housing market — has become a hot issue as Democrats gauge their vulnerability in the coming elections.”
If Obama were good for his word and “change we can rely on” actually takes place within the next two years there would be huge savings garnered for more important spending programs,
rather than wars of adventure and economic empire, bailing out gazzilionaire bankers and keeping the tax burden off of the obnoxiously wealthy.
I was listening to Kudlow’s show on the way home last night–I know it is sort of like banging your head against the wall because it feels so good when you stop– and he was harassing some women who was accurately describing the social security trust fund and how the Boomers have prepaid their retirement when Steve Forbes another not so bright guy interjected that the trust fund is a myth because you can not spend the same dollar twice. His point of course was that because the excess social security dollars were borrowed by the federal government to fund its operations, the money is not available to pay back the trust fund when it is needed to fund the Boomers retirement. I have always focused on the notion that the special treasuries are no different from the treasuries held by the public or China or whoever, but Forbes comment only highlights that while paying them off will produce larger deficits, it should make no difference in the national debt –all that will happen is we will trade the special treasuries for regular treasuries. In essence during the surplus years we managed to increase the national debt by more than the deficits while when paying the trust fund back we will be adding less to the national debt than the deficits we run. To the extent the focus is on the size of the national debt rather than the year to year defict, paying back the trust fund is a wash.
Never lose sight of the fact that Steve Forbes and his cohorts, as well as their sycophants as represented by Kudlow, want to interpret the world from their own myopic point of view. If the Trust Fund Treasuries are a myth, are what ever Treasury Notes Mr. Forbes holds also a myth. Paying back any Treasury Notes is accomplished throught he issuance of new Treasury Notes. It’s an interesting process that we should all have the ability to carry out, pay current debt with future debt. But Forbe’s points are not as sharp as the point on his head. He only wants to present the view that his taxes should never be subject to upward revision and he’ll present any obscuring argument that serves his purpose. Kudlow’s motives are no better. What do you suppose he earns as a carrier of tall tales and toady to the extraordinarily wealthy? We have in this country a seriously hurtful metamorphosis of what was once referred to as the Fourth Estate into a fifth column.
Jack,
Is this the new progressive talking point?
“rather than wars of adventure and economic empire”
I have seen it multiple times now on widely divergent Left leaning blogs. You know that the “wars of adventure and economic empire” had far more bi-partisan support over the last 9 years than the recently passed HCR? That since the Dems took coontrol of congress in Nov 2006 they have been overwelmingly supported by the Dems and that Obama has continued these policies or expanded them?
Just want to make sure you understand your on the outside looking in at these overwelmingly bi-partisan policies…
Islam will change
Guys,
SS is not a problem as Bruce and coberly have so well laid out.
Its the general fund that’s a mess (Jack being very correct here). Medicare is also a mess.
But the bottom line is that these treasuries will be paid back by the general fund. The general fund will obtain these monies from taxes or increased debt.
And you could fix the SS lack of surplus easily with just minor tweaks (see the above tab under Webb’s Social Security at the top of the page for details.)
Islam will change
MG that is a very misleading use of percentages. How much were they off as a percentage of total revenues? If I predict a $2 surplus and it comes in at $1 then my projection is off by 50%. But given total revenues around $700 billion pretty much nailed it.
We know why the difference between May and year’s end. For one thing that May projection relates to the actual Report date, the data tables would have been compiled and put together on information from the Fall and Spring before and based on projections of a stimulus package big enough to keep unemployment below 8%. The actual stimulus package was some $300 billion smaller than many economists thought necessary with the result that unemployment is at 10%.
And no in the context of a three quarters of a trillion per year program $16 billion is not that big a deal.
Plus almost all the deterioration is on the DI side of the program. There are reasons why DI suffers more than OAS in a period of extended unemployment. If you are eligible for DI but can find some way of staying in the work force in a reduced capacity you are better off doing so, it might require dragging yourself to work in a wheelchair and requiring special accomodation but the end result would be a larger DI and then OAS (because DI recipients are automatically switched to OAS at full retirement age) benefit when you are finally forced to retire. But if you are actually disabled and then lose your full or marginal employment and so look to be long term unemployed or potentially unemployable then you will fall back on a DI claim. And since it takes around six months at best to get approved there will be a lag effect.
A close examination of the separate monthly reports for DI and OAS show that almost all the shortfall is on the DI side. This isn’t do to any analytical failing by Steve Goss’s shop, it is a simple byproduct of the combination of unemployment being a few points higher than projected when the Report was being compiled.
And when you have $2.5 trillion in reserves, all of which were projected to be drawn down over the next thirty years anyway, there is no need to “discuss the $211.2 billion net negative cash flow”. At worst this represents a slight time shift in a planned event and if you really wanted to get anal means a net cash savings over the life of the Trust Fund as assets redeemed ahead of projections no longer would be accruing the interest originally projected.
Nice try though. And I have to say that at least you know your numbers, which puts you head and shoulders above most other critics.
There is a quirk in JS-Kit that strips out my name and puts in ‘My Site’, a quirk I have yet to figure out how to fix. The above post was by Bruce.
by Bruce Webb
MG it is certainly legitimate to use CBO numbers rather than those of SSA. But it would be helpful if you pointed out that CBO numbers have been significantly more optimistic than those of SSA for years, this is not a new phenomenon. Generally CBO’s projections of the long term actuarial gap have been around a third smaller than those of SSA, in 2008 when SSA had that gap at 1.7%, CBO had it at 1%, in 2009 SSA put it at 2.01% and CBO had it at 1.3%. This is not just the result of a difference in methodologies but the fact that their analyses are shifted in time by six months with SSA pulling their data together in time for a Report typically released in late March while CBO targets an August Update.
But for readers who don’t understand both factors it is not necessarily “worthwhile” to compare the two data sets, in some cases incomplete information is worth less than no information at all.
BTW this divergence between SSA and CBO results in a typical 5 year difference in their projections of Trust Fund Depletion, with CBO still having that happen after 2042 where SSA has that at 2037. A time shift that is quite significant when compared to the mortality tables, that being a time when Boomers would be expected to be dying off at a fairly rapid rate.
Buff that is Apples and Oranges. Wars will always have more initial popular support purely on the Rally around the Flag factor. Couple that with a campaign of systematic lies and a political machine that didn’t hesitate to equate resistance to de-unionizing a federal workforce as sympathy for terrorism (as was shamefully done to Max Cleland) it is not surprised that the AUMF got more bi-partisan support than the biggest extension of the New Deal/Great Society program in decades.
Democrats were willing to work with Republicans in 2001-2002 based on their perception of what was in the national interest. Republicans were not willing to push an HCR plan essentially identical to the one they backed in 1994. Because Democrats are patriots.
Bruce
“My Site” has it exactly right. When looking at a residual, if the gross inputs are large relative to the residual, then big percentage change in the residual are common. When kids first start getting a head full of “profit” or “net income” or “net cash flow”, they often ask how something so essential to the performance of the firm can vary so much from period to period. Pointing out gross figures and showing how a residual works usually opens their eyes.
Let’s remember, presidential administrations are often wrong by huge amounts in their budget balance estimates, but seen against the size of the budget, the misses don’t look quite so big.
Now, as to the article:
“For accounting purposes, the system’s accumulated revenue is placed in Treasury securities.”
What the author needs to explain is how the objective information in that sentences differs from the information contained in the main clause alone –
“…the system’s accumulated revenue is placed in Treasury securities.”
Because the phrase slapped on the front has that “this really means something to insiders” quality, but seems maybe to be one of those sly, snide things that serve an agenda — “These are just flimsy IOUs, but for accounting purposes, we stick them in Treasuries.”
I could be wrong. Can anybody point out the additional objective information available in the part slapped on the front? The same exercise – deciding whether the writer is trying to get right with the conventional wisdom or just reporting facts – is needed at several other points in the article, as well.
I am not so familiar with SS-speak that I can tell, but I also wonder if the writer isn’t adopting terms that obscure his meaning. “Accumulated revenue” in this case means surplus revenue – again, a net figure. I have to wonder whether this writer has a firm grasp on the subject. The kids I taught had a habit of covering their own uncertainty by tossing in weasel words – the longer and more latin, the better. The surplus goes in Treasuries is all the kid needs to tell us.
Of course, support for the war could simply mean that much of the public share the “realist” view of foreign policy, or the related Powell view. Before going in, you have far more choices than after you are in. Once in, you have changed the situation and have to take account of new risks, new responsibilities. When war was first in the air, the public was largely opposed. A dishonest sales campaign – mushroom clouds and the rest – was needed to bring the public around to modest support. Now, as Powell says, we broke it.
This assessment does not, of course, apply to Afghanistan. We simply put off doing much in the country from which the attack came until we had engaged in a war of choice in a country that presented little serious threat to us.
Don’t want to forget our history, or who buffy is, in such discussions.
FISCAL YEAR – SSA Projected vs Actual OASDI Financial Data
Fiscal Year 2009
INTERMEDIATE COST
Total Income 812.6…807.007
Net contributions 672.9…668.236
Taxation of benefits 21.8…20.807
Net interest 118.0…117.963
Total Income less Net Interest 694.6…689.044
Total Cost 667.4…669.686
Cash Flow 27.2…19.358
—
HIGH COST
Total Income 812.3…807.007
Net contributions 672.4…668.236
Taxation of benefits 21.8…20.807
Net interest 118.1…117.963
Total Income less Net Interest 694.2…689.044
Total Cost 669.1…669.686
Cash Flow 25.1…19.358
—
SSA Financial Data for a Selected Time Period
http://www.ssa.gov/OACT/ProgData/allOps.html
Table VI.C6.—Operations of the Combined OASI and DI Trust Funds
in Fiscal Years 2004-18
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
.
So the IOU’s in the “Trust Fund” are earning even more IOU’s as we speak and with these IOU’s the government promises to tax us (again as they taxed us on the first IOU’s to start with) print money and tax us through inflation or issue more even IOU’s and tax us for those as well to pay for it all.
Got it
What a relief, I thought SS was in trouble.
CALENDAR YEAR – SSA Projected vs Actual OASDI Financial Data
Calendar Year 2009
INTERMEDIATE COST
Total Income 819.4…807.490
Net contributions 677.3…667.257
Taxation of benefits 24.0…21.884
Net interest 118.1…118.349
Total Income less Net Interest 701.3…689.141
Total Cost 682.5…685.801
Cash Flow 18.8…3.34
—
HIGH COST
Total Income 818.6…807.490
Net contributions 676.1…667.257
Taxation of benefits 24.0…21.884
Net interest 118.5…118.349
Total Income less Net Interest 700.1…689.141
Total Cost 685.0…685.801
Cash Flow 15.1…3.34
—
SSA Financial Data for a Selected Time Period
http://www.ssa.gov/OACT/ProgData/allOps.html
Table IV.A3.— Operations of the Combined OASI and DI Trust Funds,
Calendar Years 2004-18
http://www.ssa.gov/OACT/TR/2009/IV_SRest.html#271967
.
Average Annual Unemployment Rates Used by SSA
2009
8.2% – Intermediate
7.8% – Low Cost
8.5% – High Cost
2010
8.8% – Intermediate
8.2% – Low Cost
9.3% – High Cost
2011
7.9% – Intermediate
7.1% – Low Cost
8.3% – High Cost
2012
6.8% – Intermediate
5.8% – Low Cost
7.9% – High Cost
2013
6.2% – Intermediate
5.0% – Low Cost
8.5% – High Cost
—
Economic Assumptions and Methods
http://www.ssa.gov/OACT/TR/2009/V_economic.html#205214
Table V.B2. — Additional Economic Factors
http://www.ssa.gov/OACT/TR/2009/V_economic.html#205214
.
FISCAL YEAR 2009 – SSA Projected vs Actual OASDI Financial Data
INTERMEDIATE COST
Total Income 812.6…807.007
Net contributions 672.9…668.236
Taxation of benefits 21.8…20.807
Net interest 118.0…117.963
Total Income less Net Interest 694.6…689.044
Total Cost 667.4…669.686
Net Cash Flow 27.2…19.358
—
HIGH COST
Total Income 812.3…807.007
Net contributions 672.4…668.236
Taxation of benefits 21.8…20.807
Net interest 118.1…117.963
Total Income less Net Interest 694.2…689.044
Total Cost 669.1…669.686
Net Cash Flow 25.1…19.358
—
SSA Financial Data for a Selected Time Period
http://www.ssa.gov/OACT/ProgData/allOps.html
Table VI.C6.—Operations of the Combined OASI and DI Trust Funds
in Fiscal Years 2004-18
http://www.ssa.gov/OACT/TR/2009/VI_SRfyproj.html#238210
.
CALENDAR YEAR 2009 – SSA Projected vs Actual OASDI Financial Data
INTERMEDIATE COST
Total Income 819.4…807.490
Net contributions 677.3…667.257
Taxation of benefits 24.0…21.884
Net interest 118.1…118.349
Total Income less Net Interest 701.3…689.141
Total Cost 682.5…685.801
Net Cash Flow 18.8…3.34
—
HIGH COST
Total Income 818.6…807.490
Net contributions 676.1…667.257
Taxation of benefits 24.0…21.884
Net interest 118.5…118.349
Total Income less Net Interest 700.1…689.141
Total Cost 685.0…685.801
Net Cash Flow 15.1…3.34
—
SSA Financial Data for a Selected Time Period
http://www.ssa.gov/OACT/ProgData/allOps.html
Table IV.A3.— Operations of the Combined OASI and DI Trust Funds,
Calendar Years 2004-18
http://www.ssa.gov/OACT/TR/2009/IV_SRest.html#271967
.
Average Annual Unemployment Rates Employed by SSA
2009
8.2% – Intermediate
7.8% – Low Cost
8.5% – High Cost
2010
8.8% – Intermediate
8.2% – Low Cost
9.3% – High Cost
2011
7.9% – Intermediate
7.1% – Low Cost
8.3% – High Cost
2012
6.8% – Intermediate
5.8% – Low Cost
7.9% – High Cost
2013
6.2% – Intermediate
5.0% – Low Cost
8.5% – High Cost
—
Economic Assumptions and Methods
http://www.ssa.gov/OACT/TR/2009/V_economic.html#205214
Table V.B2. — Additional Economic Factors
http://www.ssa.gov/OACT/TR/2009/V_economic.html#205214
.
The question of whether Social Security taxes collected will or will not exceed benefits paid, now, next year or forever, amounts to a great deal of sound and fury, signifying nothing. The federal government does not use tax money to pay its bills. The government pays its bills by crediting bank accounts, which it can do endlessly, with or without taxes.
There is zero relationship between federal taxes and federal spending.
The notion that Social Security taxes should equal or exceed Social Security expenditures is an artificial, meaningless construct. The federal government is not like you, me, corporations or local governments. It has the unlimited ability to create money, an ability it uses every day.
Buff,
I won’t argue the point that Dems and Repubs run in the same corporate imperialist crowd together. Are you still looking for weapons of mass destruction? Is Saddam still the baddest guy in the universe? Is Osama really the most elusive man on Earth? So many questions which receive so few good answers. Your right. The Dems orbit the same wacky world of corporate fealty. I’d prefer an elected government that represents the economic and social interests of the vast majority of citizens rather than that small circle of friends they share so many economic perks with. Your local banker is far more likely to be bailed out than is your health care likely to be brought under a reasonable level of cost.
AndyC,
You could write to your local elected officials and tell them to restore dividends and capital gains to earned income status. You could also tell them to stop treating estate tax as if an estate haad been the property of the heirs. Inheritance is hard earned income. The heirs had to stay in the good graces of the estates rightful and original owner. There’s revenue out there awaiting fair and reasonable taxation. Is your income so well sheltered? Not likely. That’s one way to reduce deficit spending. Fair and relatively equal taxation.
Jack–I read the same article and noticed the difference in the lede versus the content of the piece. Those who think that SS is going to bankrupt the government will think it no matter what, information to the contrary notwithstanding. People who think that their level of taxation amounts to theft will hold that view with equal tenacity. Anything else is not news and won’t make the lede in the NYT. Bruce keeps saying, and Coberly keeps showing, and Buff keeps concurring that it’s true. But, I’m forced to conclude that no amount of proof will convince the Sky is Falling crowd. Having said that, seems to me there’s an editor at the NYT who knows how to sell papers.
It’s not SS speak, it is AEI speak and is indeed designed to subtly sell the Phony IOU narrative.
And no the writers on this at the NYT and WaPo neither understand this nor feel they need to, after all they are getting all their information from the ‘non-partisan’ Concord Coalition or the ‘bi-partisan’ Brookings-Heritage Fiscal Seminar. After all if ‘Clinton era Budget Director Alice Rivlin’ has signed on its got to be right down the middle. Doesn’t it?
Bruce
Jack – “So MG, are you saying that the Trustee’s Reports and projections do not agree with the CBO reports and projections? If that is your point, why take one pkrojection as any more accurate than another? What is it that is most likely to account for the differences?”
It was obvious that the May 2009 SSA OASDI projections from its annual report were off target as early as when the FY 2009 data was released. Clearly, the SSA had some problems with its economic assumptions. The majority of problems for FY 2009 and CY 2009 focus on loss of cash sources of revenue, and this is primarily attributable to the unemployment rates that the SSA used in its forecasts. Similarly, there are problems with the projections for subsequent years.
I have posted the FY 2009 and CY 2009 OASDI roll up data above including references, and also the unemployment rates for 2009-2013 that the SSA employed.
There is no question in my mind that one should track the CBO budget outlook supplementary SSA data after the SSA releases its annual report each year. Presently, the public is being provided with three or four updates by CBO before the next SSA annual report is released. Monitoring the SSA monthly and quarterly data online is fine, but it is not providing updated outyear projections as does the CBO.
Jack, there is no “fair and relatively equal taxation” method. Doesn’t exist. You can read more about this by clicking the word, “here”
Jack, there is no “fair and relatively equal taxation” method. Doesn’t exist. You can read more about this at http://www.rodgermitchell.com/FairTaxes.html
Bruce,
You keep missing the fact that that bi-partisan support NEVER faded….even through a fully Dem controlled gov. Its been one of the most consistant items of US government policy for the past 9 years.
So its all apples to apples, and people who keep sporting that meme are implicitely stateing they are outside the D/R political mainstream.
Don’t want to forget our history…or the fact that regime change in Iraq was the stated foriegn policy objective of the Clinton administration (Who also supported the invasion).
BTW, when am I going to see the big anti-war protestors risking sunburn again on the mall??
Islam will change
Nancy,
I have actually convinced many of the “sky is falling” crowd, down here in big RED Texas, that SS is really not going bankrupt using Bruce and coberly’s argument. Once I go through it slowly you can actually watch the ‘light’ go on when they get it. And I gareentee you my circle (other than my sister in law) all think Pelosi is a commie and targeting Berkely would be a good use of our military…(OK I exagerate..)
One thing we all agree on is that the general fund is a total mess as are the tax laws.
Islam will change
Roger,
That’s pretty much the argument made by James Galbraith in the Nation recently and posted on AB a few posts below. Check it out if you haven’t.
Also, I recognize that fair and RELATIVELY equal is a moving target. But the system in place now puts too much income out of taxation. That is not fair, nor in any sense equal treatment under the law. My rule of thumb is that those who benefit most from the structure of our economy and society owe the most bvack to support that structure. They don’t.
Bruce,
I would like to stand with you on most of your points, but I can’t.
Bruce Webb – “MG that is a very misleading use of percentages. How much were they off as a percentage of total revenues? If I predict a $2 surplus and it comes in at $1 then my projection is off by 50%. But given total revenues around $700 billion pretty much nailed it.”
It doesn’t work way in a net cash flow analysis at a year end closeout. The end of FY 2009 is closeout data, representing one of two closeout periods. What were the results? The SSA missed their net cash flow projection for FY 2009 by 29%. I have sympathy for the other viewpoint (yours) but that stops at the door when performing a PayGO, net cash flow, or corporate profit analysis. This kind of excuse wouldn’t fly over at the U.S. Postal Service right now. Never happen. And, yeah, I know all about the cash reserves tied up in non-marketable bonds that would have to financed with marketable instruments in order to flow cash to the operation.
I’ve spent too many years educating corporate and government briefers to avoid the pitfall that you cited as the better way to view revenue streams. The issue is always about the bottom line at year end. Trying to dance your way around that will get you fired at most credible organizations. I’ve watched many gals and guys go down in flames playing that game. Most deserved it. If you think this doesn’t happen in government organizations today, you would be dead wrong. I’ve seen many program and project managers blow themselves up. Poof. Gone. “Bye, Bob. I’ll call ya.”
Bruce Webb – “We know why the difference between May and year’s end. For one thing that May projection relates to the actual Report date, the data tables would have been compiled and put together on information from the Fall and Spring before and based on projections of a stimulus package big enough to keep unemployment below 8%.”
I know that you babysit the SSA guys. That’s all fine and good (someone should), but I’m viewing the operation as a business, just as the Federal Government is viewing it complete with specific internal and external reporting requirements. I’ve worked on many government programs and all of the data provided in a report is available in a storage medium or a computer. Projections are important and particularly so during a dynamic period.
I don’t make any excuses for not updating projection criteria prior to release of a report, particularly when it is released months late and months after the CBO has provided a face briefing with SSA principals. That happened back in March 2009. Reports can be updated hours before they go to press. I’ve done it many times and walked, FedExed, or flown the update around to get approval for release. It’s not a big deal. The SSA guys screwed up on the projected unemployment rates. This is a key report that is going to lay around for about a year. I’ve reviewed the SSA report economic assumptions and factors a number of times. It’s my opinion that they were a bit sloppy in this report’s preparation. Some of their numbers are weak.
Bruce Webb – “And no in the context of a three quarters of a trillion per year program $16 billion is not that big a deal.”
Of course it matters. The net cash flow shortfall is projected to be at least $45.4 billion as compared to the May 2009 SSA projection. Conveniently ignoring the $16.4 billion is the wrong approach. That’s another missing pile of funds that will require public financing. It adds up. These kind of excuses are happening all over the beltway, but the rubber meets the road in the budget and appropriations committees.
Bruce Webb – “A close examination of the separate monthly reports for DI and OAS show that almost all the shortfall is on the DI side. This isn’t do to any analytical failing by Steve Goss’s shop, it is a simple byproduct of the combination of unemployment being a few points higher than projected when the Report was being compiled.”
Come on, you really have no idea whether the problem did or didn’t rest with an analytical failing by Goss’ shop. True? I was very disappointed in the SSA’s unemployment projections when I read the annual report. I certainly question their judgment. Then and now.
I know many economists and analysts who were projected 10-11% unemployment months before the SSA annual report was released. We talked the issue through many times post-January 2009. Few, including me, budged from the 10-11% range of projected unemployment. Our consensus view was that the Administration was crazy with its low unemployment projections. Absolutely crazy. Some of the viewpoints were shared in very heated discussions with others in D.C.. It was Coyote Ugly on some occasions.
Bruce Webb – “And when you have $2.5 trillion in reserves, all of which were projected to be drawn down over the next thirty years anyway, there is no need to “discuss the $211.2 billion net negative cash flow”. At worst this represents a slight time shift in a planned event and if you really wanted to get anal means a net cash savings over the life of the Trust Fund as assets redeemed ahead of projections no longer would be accruing the interest originally projected.”
The projected $212.2 billion net cash flow shortfall is a direct hit on Treasury financing needs, all of which will flow to the public market. This adds to the burden of Congress in determining where additional cuts will be made to discretionary spending programs. On this blog, we have had individuals go ape over fiscal year total deficits that were twice as large as $212 billion or smaller. So, let’s not pretend that program net cash flow funding shortfalls do not matter. They do matter and they add up. Pretty soon, we’re talking real money as Members of Congress like to tell me.
I don’t view the funding needs of the SSA combined trust funds in isolation. I am circumspent of the points that you raise, but I don’t pretend that the overall deficit burdens are not rising. We’re looking at debt held by the public on the order of $20 trillion by the end of this decade. There is little likelihood that very much of that projected level will be shaved off. Perhaps 10-15% tops. I expect that we will have another recession prior to 2020 even if we don’t have a double dip recession in the near term. It will keep adding up.
I don’t expect any serious action on the Federal deficit projections until around 2015.
Bruce Webb – “And no in the context of a three quarters of a trillion per year program $16 billion is not that big a deal.”
Of course it matters. The net cash flow shortfall is projected to be at least $45.4 billion as compared to the May 2009 SSA projection. Conveniently ignoring the $16.4 billion is the wrong approach. That’s another missing pile of funds that will require public financing. It adds up. These kind of excuses are happening all over the beltway, but the rubber meets the road in the budget and appropriations committees. Some discretionary programs may have to take hits to cover the decreased net cash flow at SSA and elsewhere. Otherwise, the deficit will grow that much more.
Bruce Webb – “A close examination of the separate monthly reports for DI and OAS show that almost all the shortfall is on the DI side. This isn’t do to any analytical failing by Steve Goss’s shop, it is a simple byproduct of the combination of unemployment being a few points higher than projected when the Report was being compiled.”
Come on, you really have no idea whether the problem did or didn’t rest with an analytical failing by Goss’ shop. True? I was very disappointed in the SSA’s unemployment projections when I read the annual report. I certainly question their judgment. Then and now.
I know many economists and analysts who were projected 10-11% unemployment months before the SSA annual report was released. We talked the issue through many times post-January 2009. Few, including me, budged from the 10-11% range of projected unemployment. Our consensus view was that the Administration was crazy with its low unemployment projections. Absolutely crazy. Some of the viewpoints were shared in very heated discussions with others in D.C.. It was Coyote Ugly on some occasions.
Bruce Webb – “And when you have $2.5 trillion in reserves, all of which were projected to be drawn down over the next thirty years anyway, there is no need to “discuss the $211.2 billion net negative cash flow”. At worst this represents a slight time shift in a planned event and if you really wanted to get anal means a net cash savings over the life of the Trust Fund as assets redeemed ahead of projections no longer would be accruing the interest originally projected.”
The projected $212.2 billion net cash flow shortfall is a direct hit on Treasury financing needs, all of which will flow to the public market. This adds to the burden of Congress in determining where additional cuts will be made to discretionary spending programs. On this blog, we have had individuals go ape over fiscal year total deficits that were twice as large as $212 billion or smaller. So, let’s not pretend that program net cash flow funding shortfalls do not matter. They do matter and they add up. Pretty soon, we’re talking real money.
I don’t view the funding needs of the SSA combined trust funds in isolation. I am circumspent of the points that you raise, but I don’t pretend that the overall deficit burdens are not rising. We’re looking at debt held by the public on the order of $20 trillion by the end of this decade. There is little likelihood that very much of that projected level will be shaved off. Perhaps 10-15% tops. I expect that we will have another recession prior to 2020 even if we don’t have a double dip recession in the near term. It will keep adding up.
I don’t expect any serious action on the Federal deficit projections until around 2015.
“seems to me there’s an editor at the NYT who knows how to sell papers.”
No Nancy, I’d say that it is more so the fact that the NY Times is no more a liberal bastion than is Arthur Sulzerger a common man. The paper reflects the ideology of the wealthy and panders to the ignorance and insecurities of the masses. There are some staff that place a worthwhile article from time to time, but then comes a turkey like the one under discussion on this thread. And of course they’re always ready with a handy mea culpa some time later. Remember Judith Miller and all those stories of WMDs in Iraq? The guy with the baseball hat poiinted it all out to her and her photographer. I wonder if the guy with the baseball hat is their expert on Social Security issues.
Bruce,
Good point.
I could have done that, but that makes it worse. I didn’t see any value in adding that confusion to the numbers in hard print. They’re bad enough.
The CBO numbers blow away the SSA numbers at this time. Not in the same ballpark in most cases.
I am confused about CBO’s net cash fall shortfall numbers for 2017-2020. I expected them to be higher.
Bruce,
I would like to stand with you on most of your points, but I can’t.
Bruce Webb – “MG that is a very misleading use of percentages. How much were they off as a percentage of total revenues? If I predict a $2 surplus and it comes in at $1 then my projection is off by 50%. But given total revenues around $700 billion pretty much nailed it.”
It doesn’t work that way in a net cash flow analysis at a year end closeout. The end of FY 2009 is closeout data, representing one of two closeout periods. What were the results? The SSA missed their net cash flow projection for FY 2009 by 29%. I have sympathy for the other viewpoint (yours) but that stops at the door when performing a PayGO, net cash flow analysis, or corporate profit analysis. This kind of excuse wouldn’t fly over at the U.S. Postal Service right now. Never happen. And, yeah, I know all about the cash reserves tied up in non-marketable bonds that would have to financed with marketable instruments in order to flow cash to the operation.
It’s important to review the revenue shortfalls both for program needs and surplus support for the general fund. Public financing becomes the vehicle to cover both needs.
Be thankful that I didn’t cite the calendar year shortfall. It was worse as you know.
I’ve spent too many years educating corporate and government briefers to avoid the pitfall that you cited as the better way to view revenue streams. The issue is always about the bottom line at year end. Trying to dance your way around that will get you fired at most credible organizations. I’ve watched many gals and guys go down in flames playing that game. Most deserved it. If you think this doesn’t happen in government organizations today, you would be dead wrong. I’ve seen many program and project managers blow themselves up. Poof. Gone. “Bye, Bob. I’ll call ya.”
Bruce Webb – “We know why the difference between May and year’s end. For one thing that May projection relates to the actual Report date, the data tables would have been compiled and put together on information from the Fall and Spring before and based on projections of a stimulus package big enough to keep unemployment below 8%.”
I know that you babysit the SSA guys. That’s all fine and good (someone should), but I’m viewing the operation as a business, just as the Federal Government is viewing it complete with specific internal and external reporting requirements. I’ve worked on many government programs and all of the data provided in a report is available in a storage medium or a computer. Projections are important and particularly so during a dynamic period.
I don’t make any excuses for not updating projection criteria prior to release of a report, particularly when it is released months late and months after the CBO has provided a face briefing with SSA principals. That happened back in March 2009. Reports can be updated hours before they go to press. I’ve done it many times and walked, FedExed, or flown the update around to get approval for release. It’s not a big deal. The SSA guys screwed up on the projected unemployment rates. This is a key report that is going to lay around for about a year. I’ve reviewed the SSA report economic assumptions and factors a number of times. It’s my opinion that they were sloppy in this report’s preparation.
Bruce Webb – “And no in the context of a three quarters of a trillion per year program $16 billion is not that big a deal.”
Of course it matters. The net cash flow shortfall is projected to be at least $45.4 billion as compared to the May 2009 SSA projection. Conveniently ignoring the $16.4 billion is the wrong approach. That’s another missing pile of funds that will require public financing. It adds up. These kind of excuses are happening all over the beltway, but the rubber meets the road in the budget and appropriations committees. Some discretionary programs may have to take hits to cover the decreased net cash flow at SSA and elsewhere. Otherwise, the deficit will grow that much more.
Bruce Webb – “A close examination of the separate monthly reports for DI and OAS show that almost all the shortfall is on the DI side. This isn’t do to any analytical failing by Steve Goss’s shop, it is a simple byproduct of the combination of unemployment being a few points higher than projected when the Report was being compiled.”
Come on, you really have no idea whether the problem did or didn’t rest with an analytical failing by Goss’ shop. True? I was very disappointed in the SSA’s unemployment projections when I read the annual report. I certainly question their judgment. Then and now.
I know many economists and analysts who were projected 10-11% unemployment months before the SSA annual report was released. We talked the issue through many times post-January 2009. Few, including me, budged from the 10-11% range of projected unemployment. Our consensus view was that the Administration was crazy with its low unemployment projections.
Bruce Webb – “And when you have $2.5 trillion in reserves, all of which were projected to be drawn down over the next thirty years anyway, there is no need to “discuss the $211.2 billion net negative cash flow”. At worst this represents a slight time shift in a planned event and if you really wanted to get anal means a net cash savings over the life of the Trust Fund as assets redeemed ahead of projections no longer would be accruing the interest originally projected.”
The projected $212.2 billion net cash flow shortfall is a direct hit on Treasury financing needs, all of which will flow to the public market. This adds to the burden of Congress in determining where additional cuts will be made to discretionary spending programs. On this blog, we have had individuals go ape over fiscal year total deficits that were twice as large as $212 billion or smaller. So, let’s not pretend that program net cash flow funding shortfalls do not matter. They do matter and they add up. Pretty soon, we’re talking real money.
I don’t view the funding needs of the SSA combined trust funds in isolation. I am circumspect of the points that you raise, but I don’t pretend that the overall deficit burdens are not rising. We’re looking at debt held by the public on the order of $20 trillion by the end of this decade. There is little likelihood that very much of that projected level will be shaved off. Perhaps 10-15% tops. I expect that we will have another recession prior to 2020 even if we don’t have a double dip recession in the near term. It will keep adding up.
I don’t expect any serious action on the Federal deficit projections until around 2015. We would be better off if action is taken before that time.
Bruce,
“Because Democrats are Patriots.”
You me a new keyboard! You can pay me when I get back from changing my underwear!
Malice aforethought Jimi. Glad you picked up on the irony of republican insistance of being the judges of such things.
AndyC
you and Forbes appear to be idiots. when you borrow money you have to pay it back. and generally when you borrow money you use it for something… that is you spend it. then you have to spend it again to pay it back. it’s hard to believe the Forbes knows nothing about borrowing and lending, but it’s not so hard to believe that you don’t.
SS is not in trouble. The government isn’t in trouble either, except that we appear to have idiots running it, or crooks. The money borrowed from SS is no different from the money the government borrows when it sells you an I Bond. If the government were not otherwise in serious debt from, arguably, borrowing more than it should, paying back the money borrowed from SS would not be a problem at all. As it is, raising the taxes to pay back the money that was borrowed in order to cut taxes is not a real problem. Except that the crooks running the country don’t like that “second spending,” the part where they pay back the money they borrowed and spent.
the trouble here is that the whole argument is based on two false assumptions.
the first is that paying back the Trust Fund is somehow optional. Oh, says MG and others, the money is running out and it’s gonna be hard to pay it back. Well, maybe. But that’s what happens when you borrow more than you can afford… assuming that’s what the government has done, and not that it’s crying “crisis” for completely dishonest reasons.
the second is that it makes a real difference to anyone whether the money is paid back or not. the Trust Fund could be stolen by Martians today. Social Security could still, and should, continue to pay benefits simply by raising the payroll tax. Those paying the increased tax will get their money back when they retire.
That NYT line about “generous pensions for extended retirements” is a lie. the pensions are not generous, and the retirements don’t begin soon enough, and if they last a little longer it won’t be because the people could have worked longer. in any case THE PEOPLE PAY FOR THEIR OWN PENSIONS. Not “the government.” If it is true that each generation pays more than the last, it is also true that each generation gets more than the last. No one objects to this result when it comes from investing, or even saving in a bank, but the fact is that as long as the economy grows, each generation does better than the last. And if the economy stops growing, you are still better off having Social Security than you would be with a lot of “worthless stocks.”
So argue away about when and if and how soon and whether the Trust Fund is running out, or is real in the first place. The fact is that it does not matter. Social Security is fine. It ought to be paid back, but it can survive without it. And the economy won’t collapse either way. It’s all a big goddam scam to scare people into letting “them” cut Social Security so it no longer acts as a realistic retirement insurance. There reason for doing that is basically that they hate working people. I am sorry if that sounds unhinged. but try to find another reason that makes sense. And then watch “them” as closely as you can, and you may see what i am talking about. Of course it could be simple greed. Simple stupid greed, but I can’t believe they are that stupid.
“when you borrow money you have to pay it back. and generally when you borrow money you use it for something… that is you spend it. then you have to spend it again to pay it back.”
When you issue a promissary note on money you have already taxed and spent and then add another promissary note claiming you will pay interest on the first promissary note by promissing to again tax and issue more promissary notes…………
Hey its confusing I know, but Im not the one confused, I think I have the gist of it, YOU are the one whos confused you stupid fucker.
“YOU are the one whos confused you stupid fucker.”
Andy, if this is your idea of discourse, you are posting at the wrong blog.
Please go away now. Grownups are talking here.
Joel
This guy called me an idiot in a previous reply
He can kiss my ass
The next dollar the Treasury sends to SS to pay interest will be the first. All the interest so far has been book entry. That is why it is a big deal because it is money that actually has to flow out of the general fund. Worse, for the mighty opponents it will be a precident. Once Treasury sends SS the check a line has been crossed.
While the SS obstrufication machine rumbes on for the 25th year the legal and constituional issues are now being settled in real time against the machine. Whow are they going to deny the Constitutional full faith and credit status of SS trust funds now that they are on the verge of being made real?
OK, so let’s skip the idea of having everyone, even the obscenely wealthy, pay their income taxes. How silly is that idea. Instead we can simply stop fighting wars here, there and every where. That puts a couple of trillion back into the bank. What a silly idea that is. Stop pissing away the Treasury assets and we’ll have lots to pay for a balanced budget, health care, maybe even better educational systems. You know it is a historical fact that great empires usually come to grief as a result of endless wars of attrition. Why pay attention to history when we can feel so tough and manly while enhancing the wealth of our military contractors? At everyonoe else’s expense.