* Dan Minette ([EMAIL PROTECTED]) wrote: > It may be helpful to look at the fraction of SS tax going to paying > for the present generation (both retirement and disability) and for > future use. By decade the % of SS taxes being put away for the future > is:
I don't think it is so helpful. The most clear way to see how SS is on an unsustainable path of borrowing more and more from each future generation is to look at SS (OASI and DI) receipts and outlays as a percentage of GDP. I got the data from OMB and CBO. It combines actual historical data with CBO projections. http://www.whitehouse.gov/omb/budget/fy2004/hist.html http://www.cbo.gov/showdoc.cfm?index=3650&sequence=0 In order to make it easier to see what people are paying in and getting out, I've shifted the receipts 30 years relative to the outlays (if people pay in for 40 years and receive benefits for 20 years, then the duration between the center of the 40 year period and the 20 year period is 30 years) %GDP %GDP Scheduled Receipts Outlays 0.0 1940 0.3 1950 2.2 1960 1940 0.5 2.9 1970 1950 0.7 4.2 1980 1960 2.0 4.3 1990 1970 3.2 4.2 2000 1980 4.1 4.4 2010 1990 4.9 5.6 2020 2000 4.9 6.6 2030 2010 5.1 6.7 2040 2020 5.1 6.7 2050 2030 5.1 6.8 2060 2040 5.0 6.9 2070 2050 4.9 6.7 2080 2060 4.8 2070 4.8 2080 4.9 Note that this above are the scheduled outlays, i.e., the implicit promises SS makes to pay, assuming no changes in the law. Note that for every decade of receipts from 1940 to 2050, the outlays 30 years later than the receipts constitute a larger fraction of GDP. People are getting back more than they are paying in, at least if scheduled benefits are paid. However, SS trustees project that after 2042, if no changes are made, we will only be able to pay 73% of scheduled benefits. Below is the new table taking this into account. Projected Receipts Outlays 0.0 1940 0.3 1950 2.2 1960 1940 0.5 2.9 1970 1950 0.7 4.2 1980 1960 2.0 4.3 1990 1970 3.2 4.2 2000 1980 4.1 4.4 2010 1990 4.9 5.6 2020 2000 4.9 6.6 2030 2010 5.1 6.7 2040 2020 5.1 4.9* 2050 2030 5.1 5.0* 2060 2040 5.0 5.0* 2070 2050 4.9 4.9* 2080 2060 4.8 2070 4.8 2080 4.9 * assuming 73% of scheduled So you see, every year of receipts from 1940 until 2010, the outlays 30 years later exceed the receipts. Free lunch, if you believe in that sort of thing. But starting for receipts in 2020 corresponding to outlays in 2050, the outlays are less than or equal to the receipts. I'd be fine with that, actually. The boomers make out like bandits, but I'm resigned to that. You can't fight the AARP and win. However, judging from past history, the most likely outcome, if no changes are made, is that around 2040 the boomer's children will start lobbying for benefits that they were "promised", instead a 27% cut from scheduled benefits. And the politicians will be glad to oblige. Just raise taxes again to pay the AARP members. The AARP'ers get their money, the politicians get re-elected, and everyone is happy. Until the next generation (or the one after that) tries the same trick and the system finally cracks under the strain (possibly helped along by Medicare).... _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
