Friday, August 6, 2010

Social Security Doing Just Fine

After several months delay, the Social Security Trustees have finally issued their report, which has received little MSM attention, with some outfits like the Washington Times putting out canned reports that do not reflect the contents of the report at all. For all the moaning and wailing and gnashing of teeth and shrieks of hysteria over the state of social security coming out of the deficit commission, the new report shows almost no change in any of the projected dates of any matters of interest. There is no immediate crisis, and the supposed dates of various shortfalls are barely changed. On top of which, the future of medicare actually looks much improved.

Although others have the story, the best coverage as usual of both the details of the report as well as the surrounding (lack of) media coverage is due to Bruce Webb over at angry bear (thanks again, Bruce, for your excellent efforts!).

1 comment:

Bruce Webb said...

Thanks Barkley

I just did a search and the WaPo picked it up in a story that focused on Medicare and just took some sideswipes at Social Security
"For the first time in nearly three decades, the report says, Social Security will pay out more in retirement checks this year and in 2011 than it will take in through payroll taxes." An AEI talking point in para one. Then you have to go all the way down to para 10-11 to find this;
"The report predicts that the Social Security trust fund will have enough money until 2037, the same date as in last year's forecast. After that, it would, without changes being made, be able to pay only part of retirees' money benefit checks. The program's long-term prospects would have been worse, the trustees said, but will be helped by a part of the health-care law that, starting in nine years, will put a new tax on the most expensive health plans.

For now, the Social Security trust fund has enough money to cover the gap, starting this year and in 2011, when the cost of retirees' benefits will exceed the money coming into the program. The program then will return to small surpluses for two years, the report says. After that, deficits will "grow rapidly," the report says, as the number of Americans in the large baby-boom generation who retire will grow faster than the number of workers paying into Social Security"
No hint that "only part" means "78% (up from 75%) of a much higher real benefit than today's retirees". To be fair few understand Rosser's Equation to start with.

And it might be nice if people knew that "enough money to cover the gap" means $2.5 trillion to cover some $10s of billions over three years.
And the NYT finally picked it up
with the totally misleading title Medicare Stronger, Social Security Worse in Short Run, Report Finds
This article is a little more nuanced but I really didn't like the following"

"In the short run, however, the outlook for Social Security continued to deteriorate. “Benefit payments are expected to exceed tax revenue for the first time this year, six years earlier than was projected last year,” said Treasury Secretary Timothy F. Geithner."

No hint that almost all the damage is on the DI side and is a predictable result of a deep and job creation lingering recession. Plus Geithner follows the AEI in suggesting that this change is permanent and marks some big shift.

And no one notes that the 75 year actuarial gap is back down to 1.92% or right where it was at in 2001.

Plus I still find the initial press blackout mysterious. Near as I can the first official notification that the event was even occurring came from the Labor Dept and was only an hour of notice, it is like they didn't want any coverage.