Analytical Perspectives on the Budget: FY 2016
FISCAL YEAR 2016 ANALYTICAL PERSPECTIVES OF THE U.S. GOVERNMENT (406pp PDF)
For those not familiar with it the Analytical Perspectives is a companion to the President’s Annual Budget and is a massive compilation of Tables and Figures and explanatory material on all aspects of the economy and of government operations as they pertain to the Budget. And since all such aspects do pertain the Analytical Perspectives offers a comprehensive counterpose to similar (though generally less comprehensive) publications including various Annual Reports of government agencies (cough, cough ** Social Security Administration ** cough) and of CBO Budget Outlook and other publications. For example it allows side by side comparisons of such things as unemployment and GDP projections.
The Analytical Perspectives also serve as a textbook on Government Financial Reporting and so explains why interest payments on say the Social Security Trust Fund are not counted as “outlays”. As defined. In the handy Glossary. It doesn’t make for easy reading but is valuable for all that. Or because of all that. For many of us will come out of a reading understanding that much of our “common sense” “knowledge” of what budget terms HAVE to mean (because we speak English or even Financial Accounting) do not necessarily have the same connotations or even denotations.
For example “deficit”. Anyway I am going to try to re-read the sections on Social Security and examine the contrasting economic projections as compared to those found in the Social Security Reports and corresponding CBO publications. Because the Government does NOT speak with one voice on these matters.
As time allows I will try to break out some Tables into files that can be imported into Excel and other spreadsheet programs. It should be noted that these will still be Tables and not computed Spreadsheets, i.e. no embedded formulae. Still THERE WILL BE NUMBERS. Lots of ’em. Good computing everyone.
A nice starting point (given some just past discussions at AB) is Table 2-3 Comparison of Economic Assumptions. It is on page 26 of the PDF or page 14 of the print version. It provides head to head comparisons of OMB (authors of this document), CBO and the Blue Chip forecast. Of immediate interest to me are the unemployment numbers where you have a .7% difference in 2016 (CBO 5.8% OMB 5.1%) and a .3% difference in the last years of the 10 year projection (CBO 5.5% OMB 5.2%). Which should be reflected in numbers for Social Security (my personal thing) but which also may feed into some discussion of the actual natural rate of NAIRU.
Something that has to be kept in mind is that the OMB numbers assume the Budget proposals are enacted in full while CBO mostly works off of Current Law. To the degree that you might believe that the President’s Budget is DOA in a Republican controlled Congress you are obviously free to discount its better numbers. Quite apart from whether you believe the combination of increased tax on capital and increased spending on infrastructure would have the intended effects assumed. To the degree that ‘Deadlock’ equates to ‘Current Law’ there may well be an inherent reality bias towards CBO numbers. Same arithmetic, different political assumptions.
Webb – Snow and freezing here – thanks for the link to divert my attention.
I went to page 383 – #s for OASDI. Note that OMB agrees with CBO. The combined TFs will peak out in 2017 with a high balance less than 2.8T.
Note that the 2016 -2017 TF growth is $1.1B. I say the lines will cross in calendar 2016, but a few months either way doesn’t really matter.
Total TF growth from now on is projected at 13.7b. For argument sake the TFs have leveled out.
Note the % line. These are more realistic, different from SSA.
I think that SSA will adopt a line that is not so far from CBO/OMB with the 2015 report. That or they sandbag it again….
Oh – The OMB OASDI cash deficit # is 73.3B for 2014. Exactly what I said it would be the other day. Just saying…..
Look at the cash deficits rising. $154B in 2020. It will jump from then on.
What is the OMB Cash deficit number for 2015 -2020???
——$666 billion! Coincidence, or omen?
It’s going to get very hard to hide this elephant. 2/3rd of a trillion is a big number in not so many years.
BK but did you ever source or cite that $73.3 bn? Anywhere where we could see it and understand the underlying methodology? Or did you just screen grab it from the OACT online tool?
As to your Mark of the Beast. What is that as a share of GDP or Covered Wages over that same period? Plus I would note that on an annualized basis it is right at or below the annual cost of a certain war of choice. One that wasn’t even put on budget. So maybe some proportionality is in order here.
How big is it? CBO estimates GDP at 22.5T in 2020. So $154b would be equal to:
.7% of GDP
1.6% of payrolls
As a % of payrolls it rises every year and reaches 4+% around 2028.
Are you obtuse. None of that is responsive to my question.
Where and when did you predict/project $73.4 billion and what was your sourcing?
And your last comment is puerile. We know what the ultimate gap between income and cost will be: 23%. Whether the cash deficit is or is not at 4% in 2028 is in that context meaningless. Because there can be no cash deficit once the Trust Fund runs out.
You are just replacing word salad with number salad. Supposedly precise numbers that show you are a hero and I am a zero. And may impress some folk somewhere. But few I think here.
Yes you know how to run a calculator. But you don’t seem to have equivalent skills in explaining why the calculations have any real world importance.
I said in the comments of your post at AB the other day (12:34):
“PS: The TF grew by a measly 25B in 2014, about ten days of benefits. SS had the largest cash deficit ever – $73.3B.”
Sorry you didn’t take note, being that it was your show…
SS is “predictable”. The YoY numbers are % changes from prior years. For 2014 it was obvious that PR and benefits would go up. By how much was the only question.
You can take January and February SS #s and extrapolate the full year. The error rate with only two months data is high, but not that high. When you have six months of data the error rate falls, by the fall you can make reasonable estimates for the full year.
And yes, there can be no deficit at SS. At least not under current law. So 13 years from now there is a cliff.
It would be insane to go down the road saying, “No Problem! We’ll just cut benefits 23% across the board for everyone.” (right?)
It is equally unlikely that the other extreme of 4%+ tax increases are the result.
BK,
The OPM retirement trust fund runs well over $100B cash deficit per year, the military retrirement/medical trust over $50B cash deficit, and the VA has nearly $90B in entitllements for indigent veterans and no one says that those “funds” have actuarial problems
The audit of federal debt put increase in SSA- TF at about $56B increase over 2013 .
So the congress has to pay cash for some but not all interest credited to the SSA, instead of SSA receipts hiding the deficit.!
“PS: The TF grew by a measly 25B in 2014, about ten days of benefits. SS had the largest cash deficit ever – $73.3B.”
But you didn’t source it and still less show that you had projected those figures before hand. Looks to me like you just take SocSec current monthly reporting and use it to debunk their previous reporting. Basically saying that OACT revisions to OACT projections prove that we should reject OACT projections after the fact.
No my friend, you have spent the last few years claiming YOU had successfully projected the correct numbers and to the degree that SSA would be forced to correct their numbers to yours and/or CBO’s. But you never actually show WHERE or WHEN you INDEPENDENTLY projected those numbers.
And no I have no obligation to keep some sort of database/spreadsheet of every number you post to every single post I ever put up. Keep track of your own numbers and put up or shut up. (No that I am expecting the latter).
Webb – I gave you my estimates on 12/28. Before the year was over, before the December data was in.
bkrasting
December 28, 2014 7:00 pm
Webb – my 2014 #s:
PR taxes = 759b
ToT = 30b
% = 99B
Total in = 888b
Benefits = 848b
overhead = 6b
RR = 5b
Total out = 859b
TF balance = +29B
Cash flow deficit = 70b
– See more at: http://angrybearblog.strategydemo.com/2014/12/pensions-social-security.html#comments
My estimates at the time did not have the correct YoY adjustment. That number came in at -4.6B. My estimate was closer to 2B.
I, of course, do not get this “right”. The above establishes that my estimates are, just estimates. I do try, and I get fairly close.
How close? Within a few %. For example we’ve been going back and forth about my estimate of $73.3B for the cash deficit.
‘
That number will, I believe, be closer to $73.15B. So my estimate from the other day was off by a bit.
Why are you troubled that I make estimates? Are you troubled that I look into the future and see things?
One of the biggest events in global finance in a long time happened on 1/15/15. In a very big surprise move the Swiss National Bank abandoned a long held currency peg to the Euro.
Do the research and search this, you will see many headlines that read, “Swiss CB Shocks market – Franc to float!”
I was the lone voice in the woods. I said it was an accident waiting to happen. In December I said there would be a big battle in January. I was right. (Fog of War)
http://brucekrasting.com/closing-one-twenty/
http://brucekrasting.com/fog-war/
http://brucekrasting.com/wise-man-sinks-snb/
Five years ago I looked at the numbers for SS and concluded that the estimates at the time had to be significantly revised. I said so in writing. I was right. That is nothing compared to being ahead of curve on the Swiss Franc move.
I try to look around the corner. I’m good at it.
PS in the first piece I also said the Euro, then at 1.23, would go through 1.20 and head lower. Today it is 1.13. That’s a big move in FX land. Catch that move right and you can retire.
In yesterday’s column Krugman said “why, exactly, is it crucial that we deal with the threat of future benefits cuts by locking in plans to cut future benefits?” It is a sentiment which I have heard at Angry Bear many times. I think it is flawed thinking.
It is clear that Republicans are not going to let us simply raise the payroll tax until income balances scheduled benefits. There will be a compromise that includes benefit reductions along with revenue increases. Agreeing to plans that cut benefits before 2025 will assure that the reductions can be made gradually – not in one 10 to 15 percent chunk.
More importantly, it will assure that SS can be maintained essentially the same so it can continue to be adequate insurance, by workers – for workers, against outliving your own retirement savings. Would it be better to maintain scheduledbenefits? Almost certainly. Would it be better to risk letting SS be destroyed? No way.
On balance, it would be best to find out what kind of compromise Congress can come up with.
Arne
I was going to stay out of this. But your “flawed thinking” Is this mans “only sane and decent.” Nor do I see any actual thinking in “quick, let’s compromise before the people have a chance to hear the truth.”
The truth remains that the people pay for their own Social Security. Allowing the politicians to talk about it as if it were welfare and a government expenditure is a betrayal of truth.
What the people need to know is that they can continue to pay for their own Social Security without having their benefits cut, or Social Security turned into welfare as we knew it… by simply pay ing the cost of their own longer life expectancy. That cost will be a tiny bit larger as “a percent of wages” because wages are not expected to grow as fast as the increase in costs. But in fact wages will grow, and they will grow fast enough so that AFTER paying the increased cost “as a percent of wages” the workers will have as much as twice as much real money in their pockets as they have today Plus they will have paid to insure that they can retire at a reasonable age with enough to live on.
People don’t like it when I say what I think of their “thinking.”
But you could add “gutless” to “stupid and cruel.”
“gutless” does not mean “willing to risk letting SS be destroyed.” It means “letting SS be destroyed” because we are too gutless to fight for it.” Or bother to think clearly. And cruel because those “cuts” will destroy Social Security as an adequate way to insure having “enough.”
Those who know, or think, they will have enough, don’t mind so much “cutting” that which other people will need to prevent actual misery and a shortened life.
Yeah, add immoral to gutless.
Krasting all I see here is you extrapolating from OACT November numbers.
Or can you source any of these from before then?
PR taxes = 759b
ToT = 30b
% = 99B
Total in = 888b
Benefits = 848b
overhead = 6b
RR = 5b
Total out = 859b
TF balance = +29B
Cash flow deficit = 70b
Not to mention this:
“My estimates at the time did not have the correct YoY adjustment. That number came in at -4.6B. My estimate was closer to 2B.
I, of course, do not get this “right”. The above establishes that my estimates are, just estimates. I do try, and I get fairly close.
How close? Within a few %. For example we’ve been going back and forth about my estimate of $73.3B”
Which number salad seems to suggest “your” estimate was just based on OACT data and the fact that you didn’t get it “right” was due to you not having received “the correct YoY adustment”. From OACT. All I am seeing here is your insistance that OACT will based on OACT’s adjusted reporting that in some ways gets closer to CBO’s numbers that were six months fresher will report numbers closer to CBO. And that therefore I am a big weenie.
Got it. Lesson learned. Your job is done here. Because I hear that OTHER people are saying WRONG things on the Intertoobz and you are probably just the person to fix them. Because who DOESN’T need Number Salad?
Arne there is exactly zero evidence that Republicans will buy into this framing:
“It is clear that Republicans are not going to let us simply raise the payroll tax until income balances scheduled benefits. There will be a compromise that includes benefit reductions along with revenue increases. Agreeing to plans that cut benefits before 2025 will assure that the reductions can be made gradually – not in one 10 to 15 percent chunk..”
I refer you to Bush’s CSSS of 2001. Although he later claimed that “everything is on the table” he directed his Commission to procede based on six unnegotiable principals”
The Commission was asked to make recommendations to modernize and restore fiscal soundness to Social Security, using six guiding principles:
Modernization must not change Social Security benefits for retirees or near-retirees.
The entire Social Security surplus must be dedicated only to Social Security.
Social Security payroll taxes must not be increased.
The government must not invest Social Security funds in the stock market.
Modernization must preserve Social Security`s disability and survivors insurance programs.
Modernization must include individually controlled, voluntary personal retirement accounts, which will augment Social Security.
http://govinfo.library.unt.edu/csss/index.htm
The key point being bullet point 3. There are ways to parse that which would allow your “revenue increases” but they would all have the effect of raising the burden on the upper income quintile (i.e. cap increase). And there is NOTHING in Bush’s record or indeed any other Republican then or sense that they would endorse any change to Social Security finance that would have the effect of increasing top marginal rates.
I have paid close attention to every iteration of the “Grand Bargain” over the last dozen years and I know full well that you have also. Can you point me to ANY serious plan advanced by ANY crisis-monger that proposed ANY attempt to devote extra FICA to Social Security? Sure there are proposals for carve outs and add ons to finance private accounts. But no one has endorsed ANYTHING that would violate the six principles of Bush’s 2001 CSSS. (Which is just an updated version of the 1983 Leninist Strategy).
Morning Webb. I have some preliminary estimates for OASDI for 2015
PR -792.2
% – 94.5
Tax on tax – 32
Total in = 918.7
Benefits – 896.5
Exp – 7
RR – 5
Total out 908.5
These estimates result in 2015 TF surplus = 10.2B
Cash flow deficit = 84B
How confident am I of these estimates? Not very. I need a few more months of additional data to confirm some of the observations from these numbers.
It would appear (so far) that SSA is running a bit light on PR revenue, will be under on % income and will be slightly under for benefits when compared to the estimates by SSA in the 2014 report .
How do I derive these estimates? I have a model. It’s not perfect – never claimed it was.
In 2009 I did this exercise and concluded, with little doubt, that SSA would miss its estimates by a mile.
In February of 2015 I look at this and conclude that SS is running close to expectations, but slightly under the actual forecast.
By June I will be able to refine this and make more definitive conclusions on what the year will bring.
“there is exactly zero evidence that Republicans will buy into this framing”
They did in 1983. Tey may be a lot different in 2025, but to do anything will require compromise.
A usually hate analogy, but this one holds up. Over the next 16 or 17 years benefits will increase by one step of AWI each year. If we do nothing, we will then get a year where we give back 14 or 15 years worth, after which we will start taking 3/4 AWI steps. Krugman’s proposition is that that big drop is not a problem. I think it is. If we wait another 10 years, it will open the door to destroy SS. (It will be beyond when increases are required by the NW Plan, but it will still be in Krugman’s why should I worry window.)
Taking 90 percent of AWI steps will not destroy SS. It would allow a soft landing to the kind of revenue that a 50 percent revenue, 50 percent benefit cuts compromise would produce. You may call it giving in, but without compromise SS will be destroyed.
It is also important to realize that accepting downward adjustments to scheduled benefits means the start date needs to be sooner than if we did get 100 percent. The NW Plan will require payroll tax increases in 5 or 6 years. The Overton Window needs to be expanded to include viable options now if SS is going to have a chance.
Arne I would refer you to The Greenspan Commission: What Really Happened by Bob Ball, who was not only in effect Tip O’Neill’s representative to the Commission but a long time Commissioner of Social Security who started at SSA in 1940 and was associated with its Defense right up until his death in 2008.
http://tcf.org/bookstore/detail/the-greenspan-commission
“What Really Happened” was originally supposed to be just a very long chapter in Ball’s autobiography and due to just happening to know the right people I got a page proof copy prior to the not yet scheduled publication. Which in the nature of things I was not allowed to reveal in detail but which since has been actually published in a standalone form as linked above.
Bottom line is that the Greenspan Commission dead-locked in much the same way as Bowles-Simpson did as Republican Commissioners appointed by the House came out against any fix and were mostly joined by the business community guys appointed by the Republican Senate. Since Social Security was at that point (Dec 1982) even closer to default than DI is today and so SOMETHING had to be done Bob Ball with the backing of O’Neill went right to end-game negotiations with Reagan’s guy Dick Darman (who WASN’T a Commissioner) and hammered out the ultitmate deal that we know today as the result of the Greenspan Commission. Even then the negotiated deal had to be sold to Reagan by a full court press by his Chief of Staff James Baker with a big assist from then Senate Majority Leader (and Greenspan Commissioner) Bob Dole. One Reagan had agreed (very reluctantly) to sign on he as a good soldier in turn strong armed just enough Republican Commissioners to have the privately negotiated deal officially be endorsed by the Commission after the fact. And even then the House Republican contingent (who were not all Congresscritters but instead appointees) STILL voted against. In almost precisely the same way as the House Republcian members of B-S (led by Commissioner Paul Ryan) ALSO voted against.
Bob Ball intended “What Really Happened” as a corrective against what he saw as a totally bogus narrative that had the 1983 legislation be some magical combination of Tip-N-Ronnie having drinks together and of the pure bi-partisan comity that comes out of having this kind of Commission. Which never work. Except for the very arguable exception of THIS ONE which exception breaks down on examination based on the actual testimony of the key players. Which BTW didn’t much include Greenspan. Commissioners Moynihan and Pepper were much in the mix as was (as noted) Commissioner Dole, but in the final analysis (which to be fair is Bob Ball’s analysis) the real players were Tip O’Neill and his emissary Bob Ball on the one hand and Bob Darman and the real boss of the Reagan Administration at the time Jim Baker on the other. With Greenspan and Reagan mostly sailing above the fray and involved after the fact.
(I am good friends with Nancy Altman, who is not only a co-director of Social Security Works, the lead organization of the SocSec defense movement as it exists today, but was also Greenspan’s Executive Assistant on the Commission. And she and her colleague Eric Kingson who was also a senior staff member on the Commission have a slightly different take on this. But are also kind of acolytes of Bob Ball in his latter years as founder of NASI. So thank God ‘nuance’ is a French word or we would have to take it into account here. Still the idea that 1983 was some sort of a model of bringing Rs and Ds together on this is just a product of the Ron-N-Tip Fantasy After-Work Bourbon Party. They just weren’t that much, or in fact AT ALL, into each other. No matter the recollections of addled O’Neill aide Chris ‘Tweety’ Matthews)>
Arne shorter version.
Republicans do not want to ‘fix’ Social Security except in the Joni Ernst hog castration sense. They want it to fail. Because since 1936 it has been an existential threat to their fundamental message that “Government is not the Solution, Government is the Problem”.
In 2001 Social Security was on track to fully self-funding as depletion dates were being pushed back on the order of two years per year. Moreover just about everyone in DC had signed onto the aptly named ‘Washington Consensus’ that held that the business cycle had been broken forever and that the projected trillions of dollars of surpluses then projected over the standard ten year window justified not only a huge military buildup but also a huge tax cut. After all wasn’t Greenspan testifying to Congress about the danger of the disappearnce of the Long Bond as debt was paid down TOO FAST?
Well yes he was. Now back in 2001 a small number of folks were raising some flags. Some warning red and some like me putting up victory pennants and bunting. Because if you accepted the numbers of the Washington Consensus as it related to medium and long term GDP growth in 1999-2001, which is to say 3.0% plus Real forever, then by the numbers Social Security would self-fund. And even if you didn’t hit those numbers any performance NEAR them would have meant an increasing shrinkage in Social Security’s actuarial imbalance. Which in turn would have made a 100% worker funded solution in the form of phased in FICA increases ever cheaper. And in fact over the next four years that shrinkage happened as the 75 year deficit shrank form 2.23% of payroll down to a low pont of 1.89% even as inaction should have been adding .06% to that number every year.
And yet if we examine the six NON-NEGOTIABLE guidelines Bush set for his Commission to Strenghten Social Security the idea to use FICA increases as even PART of the solution was ruled out. CATEGORICALLY. Even though a set of FICA increases had been at the heart of the compromise legislation hammered out in 1983.
Which led me to conclude. In real time as reported on my 2004 initiated blog The BruceWeb. That the Bushies had ZERO interest in fixing Social Security in any way that preserved its traditional structure as a worker financed social insurance program. That would have violated the core Economic Right belief that Governement is ALWAYS the problem and so was simply rejected out of hand.
We do not need to cut the Scheduled Benefit. Not by any realistic assessment of the carrying capacity of the U.S. economy. And the argument that we SHOULD accept some COMPROMISE in the way of adjustments to the AGI because after all the other guys are just arguing in good faith in an interest in “Strengthening” Social Security is just to buy into some absurd version of Tin-N-Ronnie-ism. The Bad Guys don’t want to Strengthen Social Security. They want to Dilute Social Security in favor a Market Based ‘Solutions’. Because Capitalism. And Freedom.
Hmm. A self-assesment has led me to conclude: “Shorter version my Ass!”
OOOPS!
Seems to me less war, more economic growth, not from investment in the BRICs.
In the time you are debating SS needing a few billion here and there, the US security establishment will squander $30T.
Maybe a little more of GDP for SSA. From the pentagon trough.
shorter version:
http://www.ssa.gov/history/tally1983.html
Whether they liked it or not, Republicans voted for the 1983 Social Security Ammendments.
“Bushies had ZERO interest in fixing Social Security in any way that preserved its traditional structure”
So let us see what happens if we have a discussion based on guidelines set by a Democratic White House. (I cringe because I don’t trust Obama on SS either, but I do have some trust that anything as far from what voters want as Bush was will bog down again.)
“some like me putting up victory pennants”
You even had me agreeing, but the last ten years has shown we were wrong. The dot-com boom employed lots of extra people and it was good for SS. The housing boom did not cause the employment to population ratio to recover, so things went back to where they were. When employment recovers (the unemployment number does not tell the story) SS will recover along with it, but never to what we saw predicted in 2001.
(The forecast is systematically wrong when we are at peaks and when we are at troughs.)
With respect to Krugman: his formulation accepts that there will be future cuts in benefits. Since you guys will never agree, you argue about the premise rather than the conclusion. But his conclusion (based on that premise) is wrong because taking half steps to prevent a slide IS better than taking full steps and allowing a slide.
Arne – This WH has already tipped its hand on SS. The 2015 budget has a provision where OASI revenues be diverted to DI.
Obama wants to kick this down the road a few years so he does not have to deal with it.
Before 1/12017 congress will agree to revenue diversion to avoid a 20% cut in DI benefits in January of 2017.
My point, nothing of any substance will come from the WH or Congress on the big picture of SS until after the next Prez takes office. It probably will not come up as an issue till 2019.
well,
for those who care.
you can compromise… and it is probably a virtue… with someone who has a legitimate interest in conflict with your own legitimate interest. but agreeing to not tell on the guy robbing your neighbor’s house if he promises not to rob yours is not a compromise. it is complicity in the crime.
it is hard for me to see the “errors” in the Trustees projections over the last ten years. The projections have not varied in any significant way. They have all amounted to “it will be necessary to raise the payroll tax a total of four percent, combined, sometime around 2030 or 2040 to avoid a quite drastic cut in benefits.” My own contribution to this has been to point out that if the tax raise is taken one tiny step at a time while incomes are growing, no one would even notice it let alone feel it. AND to point out that the workers will get their money back, the “tax” is to be sure they will have enough money to retire when they are too old to work.
Arne and Krasting choose to ignore this because they have a religious faith in the virtue of compromise… even with thieves… in the one case, and in Krasting’s … well his faith is in his own powers of predicting what everyone else has predicted while ignoring the fact that the predictions don’t amount to a serious problem IF the people are not stampeded by the Liars in giving up their Social Security to save it. something Arne earnestly believes in.
What Arne and Krasting have going for them is that no one with a forum is willing to explain to the people that they will not miss that eighty cents per week per year… while they will greatly miss that 20% of benefits when they are old, or even some fraction of that. People on Social Security do not have a lot of money left over after paying for groceries even with today’s level of benefits.
I will only add that “friends” of “Social Security Works” are willing to keep the people in the dark about their choices because the belive they can use the Social Security crisis to bring about welfare for all, which is the basic religion of their “party,” and they are apparently also of the opinion, common among radical liberals of my generation, that “the worse it gets for the people, the better it is for us” so they are willing to risk destroying Social Security for political advantage.
and i apologize for the awkward language in the above.. i was trying to avoid naming names.
but it doesn’t matter much. none of us will actually DO anything. not even me.
“choose to ignore this because they have a religious faith in the virtue of compromise”
I should choose to ignore the silly robber analogy because it is silly, but I did not, did I?
I have no faith that compromise will lead to a desirable result. I just recognize that because this involves an act of Congress, it will include compromise. As the saying relates, that is how the sausage is made. Entry into that process without prior discussion increases the chances that that those who wish to s\destroy SS will succeed.
You have to go back 20 years to see the errors in the SS forecasts. We don’t know what is correct yet, but since the depletion date moved out and came back again, we do know some were wrong.
I am sorry that coberly does not see how resilient SS can be. It needs adjustments to deal with the reality that each generation needs to pay for its longer lifespans. The current definition of an adequate safety net seems to work pretty well. Keeping it as is (as in the NW Plan) is a great idea, but a small, gradual change would not break SS. Not making any adjustments WILL break SS.
Arne
raising the payroll tax one tenth of one percent at a time IS changing SS.
that is, it changes the savings rate without changing the basic form of Social Security.
You have not explained why “compromise” with the people who are trying to destroy Social Security is necessary. You may believe that “compromise” is the only way Congress gets anything done, but I think that is wrong. Moreover it is simply pusillanimous to compromise without making your best case. It reeks of the Obama Way.
As for the silly analogy of compromising with the guy robbing your neighbor’s house. Perhaps. But it looks like a good enough analogy to me. You are willing to compromise the poor people’s ability to retire while you don’t think you are risking your own. And the nature of your “compromise” is to not tell your neighbor what you know about the crime.
Ever hear of the Compromise of 1850? It’s a pretty good example of how a compromise can lead to hell.
the depletion date has not moved in and out SIGNIFICANT’LY. It is rather in the Krasting mode, and what the Petersons want you to believe, to mistake a small movement in a long predicted date for “looming catastrophe” or that somehow the Trustees “got it wrong.” They didn’t. But they seem constrained from explaining that one tenth of one percent per year solves the problem. They DO manage to make that conclusion hard to miss but they bury it in scare talk. I suspect there is some disconnect between the political appointees and the actuaries who do the work.
What a country.
SSA bashers are a happy blessed race who radiate confidence and power. They stride confidently and plan to gut the living of scores of millions of aged Americans.
They wish to spend trillions for “security”, their every “victory” produced more insecurity and enemies. There is no dedicated income stream, but a lot of war profits generating “unwarranted influence”.
They will spend $1500b over 40 years for one family of fighter jets! That stealth is easily seen VHF/UHF bands is not important.
They spend on average $35B a year to upgrade the US’ ability to destroy the world, compared to ending divilization, starving grandma is peanuts.
They spend $100B a year and rising for “veterans’ entitlelements”. Another $50B a year for civilian retirement of pentagon workers, and about $50B a year for military reitrement and health.
None of it is useful and none of it has a dedicated funding source.
Up to 2006 SSA funded a lot of the things the SSA bashers use for their cronie capitalism.
They are dismayed that by 2020 about 70% of US G outlays will be payments for individauls a touch taken away from payments to their cronies.
ilsm
i certainly agree with your sentiments.
but it is important to understand that the money for Social Security does not come from “the government.” It comes directly from the people who will get the benefits. It is not welfare. It is simply a way for the workers to save their own money safe from inflation and market losses, and the workers insure each other against the possibility of working a whole lifetime without making enough to save enough to be able to retire.
the Liars have worked hard to obscure this point, fooling even some who should know better.
the sense in which the money does “come from their cronies” is the sense that some of those cronies have that ALL money is theirs. And when the workers can no longer retire, they will have to work to make money for their bosses who will leave them only enough to eat.. as long as they are profitable.
“the depletion date has not moved in and out SIGNIFICANT’LY”
Because SS is quite resilient, I will give you that the typical worker will not care whether adjustments occur when he is 35 or 40 or 45. On the other hand, whether Congress needs to enact the changes in 2018 or 2023 or 2028 is a big difference.
“You have not explained why “compromise” with the people who are trying to destroy Social Security is necessary”
The Republicans, whose campaign planks include destroying SS, control the House. They will do so until it is past the point where the first 0.1 percent increase should occur. Doing nothing is worse than compromising. QED
Arne
thanks for your replies. I am afraid your QED is not in order.
Congress will only “do” something if they succeed in stampeding the people in believing that “something” must be done. If the people were aware that all that needs to be done is to raise their own “tax” eighty cents per week, then that should be what is done.
It doesn’t make sense to “compromise” with people who have nothing on the table. Those who want to destroy Social Security have nothing to offer, nothing to compromise with. They might be glad to accept a “smaller cuts now” compromise, in which case the only one compromiing is the people who will get the cuts. The bad guys give up nothing… except the bigger cuts they want, which they will get by demanding another “compromise” next year or the year after.
Meanwhile the 2018 date is not a drop dead date. If we can’t get the one tenth percent solution started by then, we might have to settle for a one and a half tenth percent solution a few years later. So an eighty cents per week raise in the tax becomes a dollar twenty per week. This is still not a burden.
Even “doing nothing” until the DEATH OF THE TRUST FUND! would not be catastrophic. Then a 2 percent raise in the tax (per worker) would solve the problem with no affect on the living standards of workers.
You seem so eager to compromise with the crooks, that you can no longer see the other, better answers that do not cut Social Security below a level where it works as a meaningful insurance that workers can retire when they are too old to work. And that does not change the basic nature of Social Security…. worker paid insurance… to welfare as we knew it: means tested welfare paid for by “the rich” (who will make damn sure they pass the costs on to you.