There Is No Crisis: Daily Kos 2005

And I quote:

Economic predictions (0+ / 0-)

http://www.cepr.net/Bytes/social_security_2004.htmDean Baker

 

The new analysis finds the program will be able to pay full scheduled benefits until 2053 - nearly fifty years into the future - with no changes whatsoever. This means Social Security is far sounder today than it has been through most of its existence. In the past, shortfalls in every decade from the forties to the eighties required frequent tax increases, with the last series of increases ending in 1990.

The new assessment is substantially more optimistic than the Social Security trustees report issued in March. This report projected the program would only be able to pay full benefits until 2042. The size of the shortfall over the seventy-five year planning horizon is also considerably lower in the CBO report. While the trustees report had projected the shortfall as being equal to 0.73 percent of GDP over this period, the new CBO report implies the shortfall will be equal to only approximately 0.37 percent of GDP. By comparison, the recent increase in annual defense spending associated with the wars in Afghanistan and Iraq is equal to 1.0 percent of GDP.
[...]
The main reasons for the more optimistic picture in the CBO analysis than in the trustees report are the assumption that the unemployment rate will be lower and productivity growth will be closer to its long-term average, rather than slower rate during the years of 1973-1995. The trustees report assumes that long-term productivity growth will average just 1.6 percent annually, slightly faster than the 1.5 percent rate during the slowdown. By comparison, the CBO report assumes an average rate of productivity growth of 1.9, which is closer to the 2.5 percent average over the longer period 1947 to 2003 for which reliable data exists.

The more rapid pace of productivity growth translates into more rapid wage growth, which in turn leads to more rapid growth in revenue. Since post-retirement benefits are indexed to prices, not wages, more rapid wage growth increases the ratio of revenue to costs.

The assumption of more rapid productivity growth is also important from the standpoint of inter-generational equity. While the trustees' assumptions imply that before-tax hourly wages will be nearly 50.0 percent higher in forty years, the CBO assumptions imply that compensation will have grown by more than 65.0 percent. This means if taxes are raised to sustain benefit levels, future generations of workers will still enjoy far higher standards of living than do workers at present.

This morning I learned that the government is coming up short 4 Billion dollars a day. Four billion per day. Is that crisis enough for you?