leearnold (June 29, 2008 at 9:40 pm)

Fisher's $13.6 trillion shortfall for SS is over the infinite horizon. That is about one year's GDP over eternity. Hardly a problem! (And it is only a guess, based on a low productivity rate.)

leearnold (June 29, 2008 at 9:12 pm)

No, Social Security does not resolve any other issues in the market economy. As for inflation adjustments in benefits, these comments are restricted to 500 characters. This sort of information can be found rather easily on the internet.

bilgerburg (June 29, 2008 at 4:10 pm)

In regards to your comment on inflation, "With inflation, everything rises: wages, benefits", today we have inflation, quite a bit when looking at headline, but wages aren't following. Does SS have a way or resolving this issue? Also, when they make an inflation adjustment, do they use headline or core? And do they raise it enough to cover the inflation costs incurred during the prior year, or just going forward?

bilgerburg (June 29, 2008 at 4:00 pm)

Hi thanks for your answer...I'm not sure we're on the same page though. In Fisher's speech(Storms on the Horizon, May '08), he says, "The amount of money the Social Security system would need today to cover all unfunded liabilities from now on".."is $13.6 trillion". He goes on to say, "The much bigger concern is Medicare". So, although he makes it clear that the big problem is Medicare, he does not say that SS is not a problem. The speech is available on his website.

leearnold (June 29, 2008 at 1:28 pm)

Stay informed! The Bush Administration WASN'T UNABLE to estimate the cost of the new drug program: they HID the cost, (and hid Big Pharma's lobbyist participation,) to gain easy votes from voters now -- and to crash the safety net later. Pure cynicism! But in the long run, we will fix it, and a democratic government does no worse than the market that it supplements: Each form has (1) a different arena, (2) different information requirements, and (3) different forms of redress.

leearnold (June 29, 2008 at 1:31 am)

No -- Social Security is NOT currently heading to a default in 50 years. But if it DID default at that time, then by law, the benefit is scheduled to drop to 120% of today's benefit in real terms. Normally, Social Security pays back at about the rate of Treasuries, around 3%.

leearnold (June 29, 2008 at 1:28 am)

"When people think about these kinds of issues, they usually assume Social Security is the big problem. But, by golly, it isn't. - Richard Fisher, April 16, 2007.There will be no problem, according to the Social Security Trustees: we are heading toward their Low Cost Scenario. Worker ratios are included in this calculation.Current lack of saving seems unrelated to productivity.With inflation, everything rises: wages, benefits. Inflation is bad for other reasons, not Social Security.

robert0380 (June 27, 2008 at 6:55 pm)

I believe all entitlement programs need to be looked at. Medicare is a good example of the government's inability to estimate the cost of a new social program and then their ability to compound the problem even more by adding to it (drug benefit). Seniors shouldn't be thrown under the bus by any means but our government sure does foul it up miserably when attempting to help out.

robert0380 (June 27, 2008 at 6:52 pm)

So you're not saying I'll get an ROI of 120% on the money I pay in, you're saying by the time I collect, the payout will be 120% of what it is today. Now you're just playing math games but I get it. What about in terms of ROI (return on investment)?

bilgerburg (June 27, 2008 at 6:41 am)

I understand the whole "safety net" thing, but Richard Fisher of the Dallas Fed thinks that social security is a big problem, not as big a problem as Medicare, but still big. It doesn't sound like there will be enough workers to support the retirees. You say that productivity will solve this but that doesn't make sense. If that were true then we should have more in savings today, but we don't. Also, correct me if I am wrong, but we have a lot of inflation, how will SS handle it? good video btw