From
Investors Business Daily:
The outlook for Social Security's trust fund has deteriorated to an astonishing degree over the past year, new Congressional Budget Office [CBO] projections show.
The nonpartisan budget scorekeeper released the estimates Tuesday as part of broader economic and budget forecasts. CBO expects the trust fund to peak in 2018 and decline to $2.7 trillion in 2022 — a full $1 trillion less than Social Security's own actuaries predicted last year. ...
CBO was moderately more pessimistic than SSA a year ago, but has grown much more so, guided by incoming economic data.
This kind of gap between the two projections makes no sense to me even when we're talking about a ten year period.
6 comments:
The Trustee Report assumes unrealistic economic growth in the next decade or so. Somthing like 7% annual GDP growth. I don't remember the actual numbers, but I do remember reading the 2010 report and thinking, "on what planet?"
So yeah, this CBO readjustment sounds right. This could look really bad for Gross if he doesn't address it soon.
Bullhockey, Nobbins. Intermediate assumptions showed unemployment in 2011 averaging 9.5 percent, this year 8.6. We are well on the way to bettering that, we learned today. Something is kooky here with the CBO report.
It will be a sad day if the trust fund runs dry.
But, even sadder, is having to tap it every year, if outgo continues to exceed income.
Since 2010, this has been happening with the Social Security trust fund, and general revenues had to make up the shortfall.
Just like general revenues have had to make up the 2% payroll tax cut.
Knowing that every dollar of trust fund money used transforms relatively benign intragovernmental debt into malignant debt held by the public is a frightening thought.
Don Levit
When you factor in the number of unemployed people who simple stopped looking for work, our unemployment numbers haven't changed. (Unemployment figures only include people looking for work) We still have over 10% of people who could work if there were jobs out there not working. What's happening with the 1.5%+ difference? Many of those people are now drawing an SSA check for early retirement, or dare I say, even disability. They might still be looking for work but since their unemployment benefits ran out, there's no reason for them to stay current at the unemployement office and therefore, they are not included in the Unemployment numbers. The CBO would assume that this continues but if we can actually make a dent in the Unemployment numbers instead of simply having people drop off the list due to expired benefits, these projections can be turned around.
Well, when you stop taking out 2.5% from workers' wages (FICA tax holiday), it reduces the deposits into the Trust Fund, what did they expect would happen?
Well, anonymous, the same thing that happened when the excess payroll taxes were lent to the Treasury, spent for current expenses, and lowered the deficits.
The trust fund loses its liquidity and has to be reliquified via general revenues AS IF THE TRUST FUND DID NOT EXIST!
Don Levit
Post a Comment