AS complains that no one left of him is willing to give the straight dope on social security.
Here's the straight dope, in 40 words or less (;-0):
How odd it isn't that AS doesn't seem to blame the Right for creating the kind of playing field that isn't conducive to "realistic discourse". This, after the guy he opposed, Al Gore, spoke so forcefully and eloquently on the topic and the guy he supported ditched (and derided) the congressional "pay-go" rules in favor of the GOP's pay-for-majority rules.
Right now, the US government takes in more on social security than it spends on social security, because of demographics, almost exclusively, but not completely.
Rather than put the excess money "aside" (i.e. "lock box" it, or technically pay off the Reagan era tax-cut debt, mostly), the undisciplined U.S. Ruling Class spends the excess and then some, so that we have a 'unified budget' deficit every year.
As part of this debt-spend two-step, the government passes an "I.O.U." to itself, where "itself" is called a "Trust Fund" (that's right, the Trust Fund doesn't hold
any 'money', like normal Trust Funds, it just holds I.O.U.'s, sometimes thought of as inter-generational I.O.U.'s, in place of assets).
The key dates in Social Security.
Projected OASDI tax income will begin to fall short of outlays in 2017, and will be sufficient to finance only 75 percent of scheduled annual benefits in 2041, when the combined OASDI Trust Fund is projected to be exhausted.-2007 Report
In 2017, or thereabouts depending on economic growth (including immigrant supported growth in the labor supply), there is no longer an excess. The U.S. Government will have to actually raising cash to pay its bills, rather than having an excess "left over" (using debt issuance, most likely, but maybe they will cut spending).
That will bite in the financial markets. There will be a lead-up to that date, as the excess gradually shrinks to zero, then goes negative.
In 2041, technically or "actuarially", the program is "insolvent", in the sense that the Trust Fund doesn't have any more I.O.U's to collect on, so that the government would have to 'do something'.
Almost everyone serious is agreed that social security can be 'fixed' without serious dislocation. Everyone is also agreed that action sooner rather than later is, (a), easier, (b), more effective, and (c), the right thing to do.
Most progressives think that the Right, most recently, tried to scare everyone that there was a "crisis" in social security that required immediate privatization.
How odd it isn't that AS doesn't seem to blame the Right for creating the kind of playing field that isn't conducive to "realistic discourse". This, after the guy he opposed, Al Gore, spoke so forcefully and eloquently on the topic and the guy he supported ditched (
and derided) the congressional "pay-go" rules in favor of the GOP's pay-for-majority rules.
Among the things you never hear from the Right:
- Asking corporations to "design" jobs, specifically for seniors so that those who wish to continue to work, can do so with their unique needs met.
- Improving economic growth by increasing legal immigration rates over the next 15 years.
The projections for OASI, or "Social Security".
Receipts-greater-than-payments peaks near 2017. However, the rate of change slows nearer to 2011, which is when it will slowly start to have a "bite" on the budget and financial markets, possibly, depending on the fiscal balance at the time.
Update:Here is one estimate of why the "bite" from even the projected imbalances in the program are not as alarming as Obama suggested (see table). These amounts are small enough to suggest that Hillary is "right", that over the medium term, the picture for social security is one that probably could be handled by fiscal discipline.
In the worst case, the debt markets could handle an additional $10-15 billion a year, which is 0.01% of the current economy. I think even Greenspan was forced to admit this in open session, at one point, as best I recall.
Incremental funds required
each year to "settle" social security payments, both in projected dollars and in 2007 dollars:
($ billions)
| 2010 | -2 | -2 |
| 2011 | -1 | -1 |
| 2012 | -9 | -7 |
| 2013 | -14 | -10 |
| 2014 | -18 | -12 |
| 2015 | -19 | -12 |
| 2016 | -21 | -13 |
| 2020 | -28 | -14 |
| 2025 | -36 | -14 |
| 2030 | -44 | -13 |
| 2035 | -43 | -10 |
| 2040 | -37 | -6 |
| 2045 | -39 | -5 |
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