” Here’s how Bernie Sanders is the only truly contemporary politician in the Democratic field: He’s a hedgehog, and the current political climate – not just in America, but globally – favors hedgehogs.
” The terms “hedgehog” and “fox” were popularized in 1953 by the scholar Isaiah Berlin, although the credit for the coinage goes to Archilochus, the ancient Greek poet: “a fox knows many things, but a hedgehog one important thing.”
” The most successful hedgehog in recent American political history was undoubtedly Ronald Reagan. Reagan cared little for the details of policy implementation: instead, he embodied large, resonant ideas about reducing the size of the government while fighting the Evil Empire.
” Barack Obama, by contrast, is the ultimate fox. He came into office with great ambition but precious little ideology: He wanted to get things done, and brought in highly regarded experts who would not only get things done but get the best things done, in the best possible way. “
Looks like there is a budget deal. Two years, spending increases and fix on DI are part of the deal.
I’ve not seen details, but it appears that OASI will divert tax revenue to DI to cover the DI shortfalls. This is what most Democrats have said they wanted.
There are reports that there net are cuts in DI benefits. The monthly benefit will get set at some premium to FPL rather than a formula based on prior earnings. Some will benefit, others will lose should this be a part of the deal.
Two estimates on what the diversion will cost OASI:
SSA 2016 – 2024 total = 220B
CBO 2016 – 2024 total = 330B
There will be some lost % income as well.
DI could have been ‘fixed’ with a one-time increase in payroll taxes of 0.4% (0.2% for employer and employee).
This modest tax increase was apparently not considered. Does this result suggest anything regarding a plan to address the broader imbalances at SSA? An approach that is based on a single solution – raising payroll taxes immediately and permanently (or some annual increase for the next 20 years) – seems out of touch with what Washington is doing in 2015.
“An approach that is based on a single solution – raising payroll taxes immediately and permanently (or some annual increase for the next 20 years) – seems out of touch with what Washington is doing in 2015. ”
Which indicates the need for Washington to get in touch with the value workers place on SS.
Krasting this is quite a good post of yours but asks a question that fails to grasp the proper dynamic.
Republicans dislike Social Security and have since its inception not because it is or ever has unsustainable. They hate it because their economic and political ethos rejects the whole concept of social insurance and especially that run by or through the government. If Big government is the problem and not the solution, as many conservative Republicans fervently assert then the greatest danger to it is a governmental program that works and worse is seen to work.
From 1996 to 2004 the projections for Social Security solvency improved dramatically and this is true whether you use CBO or SSA numbers. From depletion dates placed in the late 2020’s in the earleir reporting we found ourselves with depletion dates that per SSA pushed all the way out to 2042 and for CBO for 2048, that is the projected dates for absolute “crisis” were being pushed out at a rate of more than a year a year, suggesting that those dates would never actually come. And the reason for this confidence was pretty firmly based, all you had to do is substitute the economic numbers that were firmly accepted by nearly everyone not named Dean Baker, and so appropriately called the Washington Consensus, into Social Security economic models and Social Security would be overfunded.
That is if Bush tax cuts had actually produced the growth rates predicted and we had 3% real GDP increases forever then there would be no “crisis”. Moreover even under the Intermediate Cost projections that still showed a long term actuarial gap the FICA increases needed kept shrinking.
That is by 2001 a couple of things were pretty clear in the numbers. One a payroll based fix was doable, its cost rather than rising as the “sooner is better than latter critics” had always insisted (and still do) was actually shrinking. It would have been possible to offload the entire cost of fixing Social Security on the workers.
Or alternately you could have embraced Supply Side and/or the Washington Consensus and accepted that we had broken the business cycle (the latter) or had found the magic elixer of tax cuts on growth (the former) in a way that blew the official numbers of SSA Intermediate Cost out of the water and so just proclaimed Social Security saved. Indeed the promoters of private or personal accounts had implicitly built in growth models that did exactly that. The only way the equities could provide traditional returns that would provide retirement security for all workers would be in Real GDP and Real Wage increased in a way that could fund those private accounts.
Thus provoking my little ditty of the time: If Privatization is Necessary it Won’t be Possible, If Privatization is Possible it Won’t be Necessary.
The reaction of the Right was interesting. When Bush convened his CSSS -Commission to Strengthen Social Security he laid down six principles: one FICA increases could not be an explicit part of ANY solution. And two private accounts must be an explicit part of EVERY solution. Thus at a stroke cutting through the gordion conundrum of my little ditty.
Getting back to the present day. The fact that a 0.4% increase in FICA was not considered is IMnotsoHO is because the Right has no possible interest in seeing a fully funded, worker funded program that faces no crisis at all. Just as Bush ruled out FICA increases in 2001 as being even a partial solution. Because it gave too much away to promoters of Social Insurance. Who dared to suggest that at times Government might actually BE the solution.
Now why the center-left represented by Obama and both Clintons rejects this is another question. (Answerable but not in a comment). But the result was that it became impossible to suggest a FICA based solution except in the diluted form of a transfer from OAS to DI.
One of my earliest blog posts on my own blog was called “Social Security: is it about Solvency or about Ayn Rand”. And argued that for the Right it was the latter. That the worst fear of the conservative AND libertarian wings of the right was that Social Security would ON ITS OWN or worse FUNDED BY WORKERS be seen as solvent.
Explaining why in my view Bush picked the exact time when future solvency seemed least in doubt to launch his campaign for personal accounts. SocSec Solvency was a huge risk to his whole political and economic ethos.
Webb – The devil is in the details. The deal is that there will be a 0.57% reallocation of SS revenues to DI for three years. After that the DI share falls back to 1.8%.
The .57% over-funds DI for the first 3 years, then the DI TF falls back to zero by 2022.
To me, this means that nothing will happen with SS until 2022. If the big picture of SS is buried for another 6 years then it will be next to impossible to “fix” SS as there will only be 8-10 years left before the OASDI TFs are exhausted.
You’ve done the numbers many times. I think even you will confirm that a NW style approach can’t work with only 10 years left.
So the 2015 Deal has kicked SS down the road. But the next time that SS is nearing a crisis it will be impossible to kick more cans and taxes alone will not be sufficient to fix it.
You and I will have nothing to write about for another 6 years, but in 2022 we will have a hell of a battle of what to do.
Krasting that nothing will happen before 2022 is a feature and not a bug for the Webb who appointed himself “SocSec Defender”.
I was a reluctant signee to what we could call the Coberly Plan of 2007-8 or so. I knew the numbers supported an immediate yet phased in set of FICA increases as a “fix” for Social Security’s actuarial gap, that was just math. But for the four years before that I was pushing a plan whose essence can be seen in other blog post titles of the time:” ‘ Nothing’ as a Plan for Social Security”
Because since 1997 not only was ‘Nothing’ a plan for Social Security it was a proven plan – exactly Nothing had been done and yet the actuarial gap shrank each year and the date of TF depletion retreated out in time. Entirely because the real economy was outperforming the model in Intermediate Cost and the Washington Consensus was forming around a set of numbers that would continue to beat IC numbers for the foreseeable future.
Against the plan of ‘Nothing’ were three factors. One starting in 2006 progress on Social Security started stalling out. Numerically ‘Nothing’ still penciled out, but it took more numbers, and the improvement in Social Security actuarial gap and TF depletion dates stalled and then in a minor way reversed itself. Two starting even earlier than 2006 some guy widely derided as a crank and yet co-author of what I thought the most important recent work on Social Security, that is to say economist Dean Baker and his book ‘Social Security: the Phony Crisis’, started warning against the assumptions of the Washington Consensus, particularly those who believed that housing values were sustainable. If Baker was right then the fundamentals of the Webb Plan of ‘Nothing’ were weak, they were vulnerable to things that nobody could possibly have anticipated. Like a worldwide Great Recession triggered by the popping of a massive Housing Bubble. (Where “nobody could possibly have anticipated” didn’t include Baker). And the third factor was Coberly’s ultimate willingness (I don’t say eagerness) to adapt his FICA based plan to ‘Triggers’. Which I won’t explain here except to say they took a plan that called for immediate change and turned it into something like JIT in the manufacturing world – Just In Time.
But there are still political and economic scenarios that would turn the JIT of the Coberly Plan turned Northwest back into the previous Webb Plan of Nothing. Events could intervene that would obviate the need to pull the Trigger. And this latest deal falls right in that spot. There were and are good reasons to consider the health of OAS and DI together, one being to remove the ability of the bad guys to leverage what is in reality a small and front loaded solvency issue for DI to damaging the combined OASDI program. That this removal of leverage also reduces the leverage for some plan like Northwest is for me more a feature than a bug, because I want things to develop back in directions favorable to my plan of Nothing. For example a concerted economic and political platform focused on MJ.ABW – More Jobs. At Better Wages.
So to me your claim that “To me, this means that nothing will happen with SS until 2022” is more a feature than a bug. Because almost all the things currently on the table by ‘reformers’ bent on ‘fixing’ Social Security are worse than the status quo. Northwest and the All Generations Plan aside, which as you note don’t have the political juice right now.
Under Northwest the Trigger for action on DI was firmly in the past. By our metrics something should have been done in 2006 or even before. On the other hand the Trigger for action on OAS is still in the future though approaching quickly. Now if this bill is adopted the Trigger date for combined OASDI has been moved forward in time. From our perspective a good thing even as it ratchets down pressure for immediate action on SocSec. Pressure which looked more likely to create harmful policy than good.
Which is to say that one Krasting’s “Sooner is Better than Later” is another Bruce’s “Dodged a Bullet”.
“You’ve done the numbers many times. I think even you will confirm that a NW style approach can’t work with only 10 years left.”
I have done the numbers and I can confirm that the combined TF will NOT reach zero if the first NW Plan patrol tax increase waits until SS fails to meet the short term (10 year) “test of financial adequacy” which happens in 2024 if we follow Intermediate Cost. Nonetheless, I think raising the tax now even for OASI is a better plan than nothing for a number of reasons, including that the TF would get well below 100.
Here is some data to explain why the TF exhaustion date move out so much from 1995 to 2004. From the 2015 trustees report Table IV.B3 and the 1995 report Table II.F19 we get Covered Workers. (5 year increments for the 1995 report. I plotted it, but do not have an ability to add charts to comments.)
As you can see, the economy brought many more workers into SS than was predicted. Since SS is very dependent on the ratio of workers to beneficiaries, they were good times. Interesting that 2010 was below the 1995 prediction, but 2015 is back above.
The article reports on a plan to close a GE industrial engine plant in Wisconsin. Early in the article the following point is made.
“What happened in less than two years to change things so much? The answer is a blend of Washington politics, fast-changing markets and corporate self-interest. At the center is a politically charged dispute over a usually obscure agency, the Export-Import Bank.
That dispute reaches a turning point on Monday, when supporters from both parties of the now shuttered federal agency will force a vote in the House of Representatives to reopen it — the culmination of a months long revolt against some of the most powerful Republicans in Congress, who want the bank to remain dead.” The article points out that GE plans to close the plant regardless of any new actions on the EX-Im Bank legislation. But then the following article appears today.
Now I don’t know if the Ex-Im Bank is a good thing or bad for the country as a whole. But I find the squabbling reported in the second article to be rather interesting. With so many opposed to this form of corporate welfare how did the legislation get so many yea votes? Curious, no?
Ilsm I agree about Social Conservatives and JC Calhoun
But there is an Economic Conservative/Libertarian Wing that dominated the Republican Party before the Reagan Revolution and was far more devoted to Free Farming and Free Trade. And to one degree or another was opposed by religious impulse and the desire for competitive advantage to the Slave Economy and its Masters, then and for generations identified with the Democratic Party until they transformed themselves into Dixiecrats in 1948, the Southern Half of Nixon Democrats in 1972 and to full fledged Republicans in 1980.
The Republican Party since its origin has been an Economic Conservative Party. And was in many ways neutral to hostile to what is now Social Conservatism right until the 80s.
We should not confuse Cato and the Concord Coalition with the Council of Concerned Citizens. Not all C’s are Calhounites. Or Co-believers in a Civil society based on Cotton in Charleston.
I think you have to look at the covered workers data closely. Consider the 2014 SSA report. The estimate is that 22.6M workers made an average salary of only $2,066. A total of 36m covered workers made an average income of only $7,400.
When pondering covered workers I think you have to back out these marginally attached workers.
Bruce, I have to agree it is odd that they have different numbers on another web page, but I checked to make sure I did not make a cut and paste error. I used data from the annual report: https://www.ssa.gov/OACT/tr/2015/lr4b3.html
“When pondering covered workers I think you have to back out these marginally attached workers.”
Since my purpose was to point out why data caused predictions to change, I think comparing reports directly is the best method.
“Workers who are paid at some time during the year for employment on which OASDI taxes are due.” from the SS report
is not the same as IRS tax filers.
If you want to compare one year to another year, you need to use numbers that are reported the same way.
This really pisses me off about the republicans right now.
I am a pretty conservative person. But the U.S. government does have it’s place, and that place is clearly defined in the U.S. Constitution. Part of that place is “To regulate Commerce with foreign Nations.” Now, taking the verb “regulate” to mean “make regular”, it sounds like we have a clear case FOR the Export Import Bank.
Warren – Not sure about that “regulate” means “make regular” is a proper description of DC’s role in regulating foreign commerce. Also not sure that DC’s obligation to Regulate automatically gives DC the right to lend money to foreign airlines. (US airlines don’t get this subsidy)
EXIM has total outstanding long term loans of $85B. It added another $20b last year. Not all of this is to good credits (Ethiopia, Honduras). Several billion was lent out to China just last year. China?
The justification for EXIM is that most other trading partners have similar subsidized financing for their exports. So EXIM exists because others do it. But the ‘others’ all do it and say they have to because of EXIM.
To me, all of this is just a big global corporate giveaway. Boeing would do just fine without EXIM.
Warren – forgot to mention that out pals, the Russians, got $700+m of long term credits.
Two of the wealthiest countries in the world got EXIM money. Saudi Arabia got $200 large and the UAE sucked down $300m. 1/2 billion for those guys? Nothing for Detroit?
Sounds like the ExIm bank is a necessary part of US participation in global trade. It also sounds like that bank needs better direction in how it plays its part. Who has the ultimate responsibility for how ExIm doles out the cash? I assume there to be some form of Executive branch oversight.
On the other hand it is more likely that the ExIm bank needs to have more stringent guidelines written into its charter. The value directive to do some good for the U.S. economy and citizens seems to leave plenty of room for the foxes to enter the hen house of cash.
How Bernie Sanders is like Ronald Reagan: The hedgehog, the fox, and the 2016 election by Felix Salmon
http://fusion.net/story/220498/how-bernie-sanders-is-like-ronald-reagan-the-hedgehog-the-fox-and-the-2016-election/
” Here’s how Bernie Sanders is the only truly contemporary politician in the Democratic field: He’s a hedgehog, and the current political climate – not just in America, but globally – favors hedgehogs.
” The terms “hedgehog” and “fox” were popularized in 1953 by the scholar Isaiah Berlin, although the credit for the coinage goes to Archilochus, the ancient Greek poet: “a fox knows many things, but a hedgehog one important thing.”
” The most successful hedgehog in recent American political history was undoubtedly Ronald Reagan. Reagan cared little for the details of policy implementation: instead, he embodied large, resonant ideas about reducing the size of the government while fighting the Evil Empire.
” Barack Obama, by contrast, is the ultimate fox. He came into office with great ambition but precious little ideology: He wanted to get things done, and brought in highly regarded experts who would not only get things done but get the best things done, in the best possible way. “
Looks like there is a budget deal. Two years, spending increases and fix on DI are part of the deal.
I’ve not seen details, but it appears that OASI will divert tax revenue to DI to cover the DI shortfalls. This is what most Democrats have said they wanted.
There are reports that there net are cuts in DI benefits. The monthly benefit will get set at some premium to FPL rather than a formula based on prior earnings. Some will benefit, others will lose should this be a part of the deal.
Two estimates on what the diversion will cost OASI:
SSA 2016 – 2024 total = 220B
CBO 2016 – 2024 total = 330B
There will be some lost % income as well.
DI could have been ‘fixed’ with a one-time increase in payroll taxes of 0.4% (0.2% for employer and employee).
This modest tax increase was apparently not considered. Does this result suggest anything regarding a plan to address the broader imbalances at SSA? An approach that is based on a single solution – raising payroll taxes immediately and permanently (or some annual increase for the next 20 years) – seems out of touch with what Washington is doing in 2015.
Sounds like the debt ceiling deal opens the spout filling the pentagon trough.
“An approach that is based on a single solution – raising payroll taxes immediately and permanently (or some annual increase for the next 20 years) – seems out of touch with what Washington is doing in 2015. ”
Which indicates the need for Washington to get in touch with the value workers place on SS.
Krasting this is quite a good post of yours but asks a question that fails to grasp the proper dynamic.
Republicans dislike Social Security and have since its inception not because it is or ever has unsustainable. They hate it because their economic and political ethos rejects the whole concept of social insurance and especially that run by or through the government. If Big government is the problem and not the solution, as many conservative Republicans fervently assert then the greatest danger to it is a governmental program that works and worse is seen to work.
From 1996 to 2004 the projections for Social Security solvency improved dramatically and this is true whether you use CBO or SSA numbers. From depletion dates placed in the late 2020’s in the earleir reporting we found ourselves with depletion dates that per SSA pushed all the way out to 2042 and for CBO for 2048, that is the projected dates for absolute “crisis” were being pushed out at a rate of more than a year a year, suggesting that those dates would never actually come. And the reason for this confidence was pretty firmly based, all you had to do is substitute the economic numbers that were firmly accepted by nearly everyone not named Dean Baker, and so appropriately called the Washington Consensus, into Social Security economic models and Social Security would be overfunded.
That is if Bush tax cuts had actually produced the growth rates predicted and we had 3% real GDP increases forever then there would be no “crisis”. Moreover even under the Intermediate Cost projections that still showed a long term actuarial gap the FICA increases needed kept shrinking.
That is by 2001 a couple of things were pretty clear in the numbers. One a payroll based fix was doable, its cost rather than rising as the “sooner is better than latter critics” had always insisted (and still do) was actually shrinking. It would have been possible to offload the entire cost of fixing Social Security on the workers.
Or alternately you could have embraced Supply Side and/or the Washington Consensus and accepted that we had broken the business cycle (the latter) or had found the magic elixer of tax cuts on growth (the former) in a way that blew the official numbers of SSA Intermediate Cost out of the water and so just proclaimed Social Security saved. Indeed the promoters of private or personal accounts had implicitly built in growth models that did exactly that. The only way the equities could provide traditional returns that would provide retirement security for all workers would be in Real GDP and Real Wage increased in a way that could fund those private accounts.
Thus provoking my little ditty of the time: If Privatization is Necessary it Won’t be Possible, If Privatization is Possible it Won’t be Necessary.
The reaction of the Right was interesting. When Bush convened his CSSS -Commission to Strengthen Social Security he laid down six principles: one FICA increases could not be an explicit part of ANY solution. And two private accounts must be an explicit part of EVERY solution. Thus at a stroke cutting through the gordion conundrum of my little ditty.
Getting back to the present day. The fact that a 0.4% increase in FICA was not considered is IMnotsoHO is because the Right has no possible interest in seeing a fully funded, worker funded program that faces no crisis at all. Just as Bush ruled out FICA increases in 2001 as being even a partial solution. Because it gave too much away to promoters of Social Insurance. Who dared to suggest that at times Government might actually BE the solution.
Now why the center-left represented by Obama and both Clintons rejects this is another question. (Answerable but not in a comment). But the result was that it became impossible to suggest a FICA based solution except in the diluted form of a transfer from OAS to DI.
One of my earliest blog posts on my own blog was called “Social Security: is it about Solvency or about Ayn Rand”. And argued that for the Right it was the latter. That the worst fear of the conservative AND libertarian wings of the right was that Social Security would ON ITS OWN or worse FUNDED BY WORKERS be seen as solvent.
Explaining why in my view Bush picked the exact time when future solvency seemed least in doubt to launch his campaign for personal accounts. SocSec Solvency was a huge risk to his whole political and economic ethos.
Webb – The devil is in the details. The deal is that there will be a 0.57% reallocation of SS revenues to DI for three years. After that the DI share falls back to 1.8%.
The .57% over-funds DI for the first 3 years, then the DI TF falls back to zero by 2022.
To me, this means that nothing will happen with SS until 2022. If the big picture of SS is buried for another 6 years then it will be next to impossible to “fix” SS as there will only be 8-10 years left before the OASDI TFs are exhausted.
You’ve done the numbers many times. I think even you will confirm that a NW style approach can’t work with only 10 years left.
So the 2015 Deal has kicked SS down the road. But the next time that SS is nearing a crisis it will be impossible to kick more cans and taxes alone will not be sufficient to fix it.
You and I will have nothing to write about for another 6 years, but in 2022 we will have a hell of a battle of what to do.
The details – page 78 of the draft:
http://docs.house.gov/billsthisweek/20151026/BILLS-114hr-PIH-BUDGET.pdf
Krasting that nothing will happen before 2022 is a feature and not a bug for the Webb who appointed himself “SocSec Defender”.
I was a reluctant signee to what we could call the Coberly Plan of 2007-8 or so. I knew the numbers supported an immediate yet phased in set of FICA increases as a “fix” for Social Security’s actuarial gap, that was just math. But for the four years before that I was pushing a plan whose essence can be seen in other blog post titles of the time:” ‘ Nothing’ as a Plan for Social Security”
Because since 1997 not only was ‘Nothing’ a plan for Social Security it was a proven plan – exactly Nothing had been done and yet the actuarial gap shrank each year and the date of TF depletion retreated out in time. Entirely because the real economy was outperforming the model in Intermediate Cost and the Washington Consensus was forming around a set of numbers that would continue to beat IC numbers for the foreseeable future.
Against the plan of ‘Nothing’ were three factors. One starting in 2006 progress on Social Security started stalling out. Numerically ‘Nothing’ still penciled out, but it took more numbers, and the improvement in Social Security actuarial gap and TF depletion dates stalled and then in a minor way reversed itself. Two starting even earlier than 2006 some guy widely derided as a crank and yet co-author of what I thought the most important recent work on Social Security, that is to say economist Dean Baker and his book ‘Social Security: the Phony Crisis’, started warning against the assumptions of the Washington Consensus, particularly those who believed that housing values were sustainable. If Baker was right then the fundamentals of the Webb Plan of ‘Nothing’ were weak, they were vulnerable to things that nobody could possibly have anticipated. Like a worldwide Great Recession triggered by the popping of a massive Housing Bubble. (Where “nobody could possibly have anticipated” didn’t include Baker). And the third factor was Coberly’s ultimate willingness (I don’t say eagerness) to adapt his FICA based plan to ‘Triggers’. Which I won’t explain here except to say they took a plan that called for immediate change and turned it into something like JIT in the manufacturing world – Just In Time.
But there are still political and economic scenarios that would turn the JIT of the Coberly Plan turned Northwest back into the previous Webb Plan of Nothing. Events could intervene that would obviate the need to pull the Trigger. And this latest deal falls right in that spot. There were and are good reasons to consider the health of OAS and DI together, one being to remove the ability of the bad guys to leverage what is in reality a small and front loaded solvency issue for DI to damaging the combined OASDI program. That this removal of leverage also reduces the leverage for some plan like Northwest is for me more a feature than a bug, because I want things to develop back in directions favorable to my plan of Nothing. For example a concerted economic and political platform focused on MJ.ABW – More Jobs. At Better Wages.
So to me your claim that “To me, this means that nothing will happen with SS until 2022” is more a feature than a bug. Because almost all the things currently on the table by ‘reformers’ bent on ‘fixing’ Social Security are worse than the status quo. Northwest and the All Generations Plan aside, which as you note don’t have the political juice right now.
Under Northwest the Trigger for action on DI was firmly in the past. By our metrics something should have been done in 2006 or even before. On the other hand the Trigger for action on OAS is still in the future though approaching quickly. Now if this bill is adopted the Trigger date for combined OASDI has been moved forward in time. From our perspective a good thing even as it ratchets down pressure for immediate action on SocSec. Pressure which looked more likely to create harmful policy than good.
Which is to say that one Krasting’s “Sooner is Better than Later” is another Bruce’s “Dodged a Bullet”.
“You’ve done the numbers many times. I think even you will confirm that a NW style approach can’t work with only 10 years left.”
I have done the numbers and I can confirm that the combined TF will NOT reach zero if the first NW Plan patrol tax increase waits until SS fails to meet the short term (10 year) “test of financial adequacy” which happens in 2024 if we follow Intermediate Cost. Nonetheless, I think raising the tax now even for OASI is a better plan than nothing for a number of reasons, including that the TF would get well below 100.
Here is some data to explain why the TF exhaustion date move out so much from 1995 to 2004. From the 2015 trustees report Table IV.B3 and the 1995 report Table II.F19 we get Covered Workers. (5 year increments for the 1995 report. I plotted it, but do not have an ability to add charts to comments.)
As you can see, the economy brought many more workers into SS than was predicted. Since SS is very dependent on the ratio of workers to beneficiaries, they were good times. Interesting that 2010 was below the 1995 prediction, but 2015 is back above.
1995 140,997 141,209
1996 143,453
1997 146,312
1998 149,283
1999 152,034
2000 154,912 147,600
2001 155,313
2002 154,742
2003 154,957
2004 156,742
2005 159,184 153,468
2006 161,726
2007 163,489
2008 162,886
2009 157,877
2010 157,329 158,485
2011 158,956
2012 161,261
2013 163,355
2014 165,603
2015 167,638 161,349
In an interesting juxtaposition these two articles appear in the NY Times on consecutive days. The first, yesterday: http://www.nytimes.com/2015/10/26/business/ex-im-bank-dispute-threatens-ge-factory-that-obama-praised.html
The article reports on a plan to close a GE industrial engine plant in Wisconsin. Early in the article the following point is made.
“What happened in less than two years to change things so much? The answer is a blend of Washington politics, fast-changing markets and corporate self-interest. At the center is a politically charged dispute over a usually obscure agency, the Export-Import Bank.
That dispute reaches a turning point on Monday, when supporters from both parties of the now shuttered federal agency will force a vote in the House of Representatives to reopen it — the culmination of a months long revolt against some of the most powerful Republicans in Congress, who want the bank to remain dead.” The article points out that GE plans to close the plant regardless of any new actions on the EX-Im Bank legislation. But then the following article appears today.
And the second today:http://www.nytimes.com/2015/10/28/us/politics/house-votes-overwhelmingly-to-reopen-the-ex-im-bank.html?partner=rss&emc=rss
Now I don’t know if the Ex-Im Bank is a good thing or bad for the country as a whole. But I find the squabbling reported in the second article to be rather interesting. With so many opposed to this form of corporate welfare how did the legislation get so many yea votes? Curious, no?
Social conservatives.
I do not think the conservative [thuggee] party is all Ayn Rand. Many are not into the economics of deterministic greed.
Rather they are into a [civil] society based on King Cotton as extant in Charleston in 1830.
A tax based [civil in O W Holmes’ term] society where the common weal limits King Cotton is anathema.
Ayn Rand is not their model. Sacred property and Dredd Scott……..
SS, DI, medicine for all is anathema to their view of JC Calhoun. The founders!
Ilsm I agree about Social Conservatives and JC Calhoun
But there is an Economic Conservative/Libertarian Wing that dominated the Republican Party before the Reagan Revolution and was far more devoted to Free Farming and Free Trade. And to one degree or another was opposed by religious impulse and the desire for competitive advantage to the Slave Economy and its Masters, then and for generations identified with the Democratic Party until they transformed themselves into Dixiecrats in 1948, the Southern Half of Nixon Democrats in 1972 and to full fledged Republicans in 1980.
The Republican Party since its origin has been an Economic Conservative Party. And was in many ways neutral to hostile to what is now Social Conservatism right until the 80s.
We should not confuse Cato and the Concord Coalition with the Council of Concerned Citizens. Not all C’s are Calhounites. Or Co-believers in a Civil society based on Cotton in Charleston.
Arne – I’m struggling with the numbers you provided. Consider the data you provide for 2014. You have a number of 165,603,000 workers.
But SS has a report on covered workers for each year. SS has the 2014 covered workers # as 158,186,768. 7.5m workers difference????
The SSA report:
https://www.socialsecurity.gov/cgi-bin/netcomp.cgi?year=2014
I think you have to look at the covered workers data closely. Consider the 2014 SSA report. The estimate is that 22.6M workers made an average salary of only $2,066. A total of 36m covered workers made an average income of only $7,400.
When pondering covered workers I think you have to back out these marginally attached workers.
Bruce, I have to agree it is odd that they have different numbers on another web page, but I checked to make sure I did not make a cut and paste error. I used data from the annual report:
https://www.ssa.gov/OACT/tr/2015/lr4b3.html
“When pondering covered workers I think you have to back out these marginally attached workers.”
Since my purpose was to point out why data caused predictions to change, I think comparing reports directly is the best method.
The annual report I sent you is derived from actual IRS numbers, So it is the series to focus on when considering how many covered workers there are.
Better to use hard #s than estimates.
I am not sure why you call a number for 2014 labeled ‘historical’ in a 2015 document an estimate.
OK, you forced me to look.
“Workers who are paid at some time during the year for employment on which OASDI taxes are due.” from the SS report
is not the same as IRS tax filers.
If you want to compare one year to another year, you need to use numbers that are reported the same way.
This really pisses me off about the republicans right now.
I am a pretty conservative person. But the U.S. government does have it’s place, and that place is clearly defined in the U.S. Constitution. Part of that place is “To regulate Commerce with foreign Nations.” Now, taking the verb “regulate” to mean “make regular”, it sounds like we have a clear case FOR the Export Import Bank.
Warren – Not sure about that “regulate” means “make regular” is a proper description of DC’s role in regulating foreign commerce. Also not sure that DC’s obligation to Regulate automatically gives DC the right to lend money to foreign airlines. (US airlines don’t get this subsidy)
EXIM has total outstanding long term loans of $85B. It added another $20b last year. Not all of this is to good credits (Ethiopia, Honduras). Several billion was lent out to China just last year. China?
The justification for EXIM is that most other trading partners have similar subsidized financing for their exports. So EXIM exists because others do it. But the ‘others’ all do it and say they have to because of EXIM.
To me, all of this is just a big global corporate giveaway. Boeing would do just fine without EXIM.
Warren – forgot to mention that out pals, the Russians, got $700+m of long term credits.
Two of the wealthiest countries in the world got EXIM money. Saudi Arabia got $200 large and the UAE sucked down $300m. 1/2 billion for those guys? Nothing for Detroit?
http://www.exim.gov/sites/default/files/reports/annual/EXIM-2014-AR.pdf
Sounds like the ExIm bank is a necessary part of US participation in global trade. It also sounds like that bank needs better direction in how it plays its part. Who has the ultimate responsibility for how ExIm doles out the cash? I assume there to be some form of Executive branch oversight.
On the other hand it is more likely that the ExIm bank needs to have more stringent guidelines written into its charter. The value directive to do some good for the U.S. economy and citizens seems to leave plenty of room for the foxes to enter the hen house of cash.