Sunday, August 19, 2012

2087 is not right around the corner

Stephen Ohlemacher's AP Goosebumps series on Social Security hit part 3 today.

Part 1 was where he turned a 5/1 payback into less than 1/1 by hiding the adjustments.

Part 2 was mostly a snooze.

This weeks installment is all about WE MUST ACT NOW.

Each year lawmakers wait, Social Security's financial problems loom larger and the need for bigger changes becomes greater, according to an analysis by The Associated Press.

Or, to select the simplest, (which I support, FWIW):

—Apply the Social Security tax to all wages, including those above $110,100. Workers making $200,000 in wages would get a tax increase of $5,574, an amount their employers would have to match. Their future benefits would increase, too. This option would eliminate 72 percent of the shortfall. Two years ago, it would have wiped out 99 percent.

He hides what's really going on. I'm sure you're shocked.  But let's take it slow and careful, so even an AP reporter can sort of understand.

What else has changed in 2 years?

-The 75 year projection has lost 2 surplus years and added 2 deficit years

-The economy has stunk for 2 years. Before the crash, contributions were supposed to exceed payouts to 2019.

-Interest rates dropped to basically nothing, hurting the income on the trust fund.

The result is that removing the cap in 2010 would not have solved 99% of the 2012-2087 issue. I suspect that the reduction in shortfall would be a lot closer to 72% than 99%. How much closer? If the AP knows, they aren't telling. In fact, by not mentioning any of the other factors, they're implying it would still have been a 99% solution. And who knows what the 75 year shortfall would be looking from 2014?What they are doing is deception & fearmongering.

So things happening right now can affect the 75 year projection? Of Course. What are the chances that the 75 year projection will be real? A few years back, the projection was that the fund would be good well into the 2040s. Since 2010, the tapout date has gone from 2037 to 2033, so we've gone from 27 years to 21 before the need to cut or subsidize in just 2 years.

Yes, we're supposed to be concerned with a 75 year projection. What could go wrong?

Lessee. We're in a depression, climate change seems to be pushing us into famine, oil production growth stalled in 2005 & will start to decline soon, our government seems to be falling into an increasingly repressive plutocracy...

No, adjusting Social Security now instead of in 2023 or 2033 is not a big deal. Trying to scare us into thinking it is a big deal - well, Mr. Stephen Ohlemacher, you really need to look harder at what agenda you are serving.

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