Bush hasCATO put out a partial truth lie on SocSec -claiming a $26T prob

[papau]

LOL - man they do not quit. below is the CATO partial truth lie - but first here are my comments on that lie! :-)

The FOREVER number - 3.7 trillion - comes off of a projection over an infinite number of years that assumes 1.6% GDP growth forever - about half of the historical average. The other SSA projection with the slightly higher - but still low - GDP growth says there is no problem.

I like how present value calc's are touted as important but the danger of using them on forever projections is not mentioned.

I also liked the way the bonds owened by Social Security are somehow different from the bonds owned by our mutual funds and other countries like Japan. Per the GOP Social Security bonds are not an asset - indeed one adds them to the pretend liability to get a bigger liability. I wonder who is going to tell Japan the bonds it holds are worthless. And who will buy our bonds over the next 4 years as we try to find money to cover the Bush deficits?

And a present value in 2004 of a cash deficit that begins in 2018 - $26 trillion - has meaning? - perhaps notafter you realize that we begin our guessing 14 years from now - and that with a different set of assumptions - albeit still conservative assumptions - just not as consertive as the "intermediate" projections assumptions - the $26 Trillion in deficit becomes trillions in Assets reflecting future overpayment by the middle class in their payroll taxes.

AND CATO'S IDEA OF CONTEXT - LOL - in Bush's 2005 2.4 Trillion budget with 100's of billion ripped off for corporate welfare for Bush buddies, we compare a rounding error level number - The 2018 first year Social Security sale of its bond assets of $16 billion - to the budgets for Head Start and the WIC nutritional program after Bush has cut those programs.

To put this bull in context - soon your tax payment will be 1/4 to 1/2 for interest on the debt Bush is running up. The repayment of the Trust Fund Bond in 2018 of $18 billion will mostly be done by selling more bonds to Japan - like why is this different from other Bush money needs because of his deficits?

Or do workers pay extra taxes in order to avoid only certain parts of the Bush deficit?

The rate of return can be fixed by investing in equities - if you believe the GOP - so why does the GOP fight against allowing the Trust fund surplus being invested in equities? Perhaps thats too easy - or perhaps they need to steal the money so as to fund the Bush tax cuts for the rich - yes - that is correct - the Social Security payroll tax surplus is being used to buy bombs and homeland security and defense because the Rich refuse to pay enough in Federal Income tax to cover that cost.

Amazing how the project by GAO that says we can only pay 80% of benefit with current 12.4 % after the year 2052 has become a 50% tax increase in 2078.

And then the scare words - the lack of legal ownership over your annuity -LOL - !!! perhaps it is not lack of education and it is just that being willing to lie via partial truth - if it will help the GOP.

Does anyone know of a way to "own" a government obligation to you? I guess the Courts do work in this case.

Perhaps the government should issue annuity contracts to each retiree?

But they are trying to imply a lack of ability to take a lump sum in cash - as if that would be a good public policy that would prevent the old folks from outliving their money.
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AND NOW THE BS THAT CATO'S TANNER IS PUTTING OUT


http://www.socialsecurity.org/pubs/articles/tanner-040429.html

"The figure most cited in the media is the "present value" of Social Security's unfounded liabilities, $3.7 trillion, which represents the amount needed to cover shortfalls after the Trust Fund is exhausted in 2042. An additional $1.5 trillion would be needed to redeem the bonds in the trust fund, for a total unfounded liability of $5.2 trillion, on a present value basis. Present value calculations are an important number for economists and actuaries-they show the amount the government would have to set aside today (assuming it earned standard interest rates) to pay all promised benefits in the future. But, of course, the government cannot set aside $5.2 trillion today. That would be nearly half of our Gross Domestic Product.
Therefore, a better measure of Social Security's financial crisis is its actual cash deficit: the total amount that its expenditures will exceed its revenue from 2018 on. Measured in constant 2004 dollars, that shortfall is an astounding $26 trillion-$26,000,000,000,000.00.
To put this in context, in 2018, the first year that Social Security will run a cash deficit, that shortfall will be approximately $16 billion, or roughly the equivalent of the current budgets for Head Start and the WIC nutritional program. In another two years, Social Security's shortfalls will nearly exceed those two programs, plus the Departments of Education, Commerce, Interior, and the Environmental Protection Agency. By 2030 or so, you can throw in the Departments of Energy, Housing and Urban Development, and Veterans Affairs. And the biggest deficits would be still to come.
Or, if you would rather look at it in terms of taxes, in the first year after Social Security starts running a deficit, the government must acquire revenues equivalent to nearly $200 per worker. By 2042, the additional tax burden increases to almost $2,000 per worker, and by 2078 it reaches a crushing $4,200 per worker (in constant dollars). And it continues to rise thereafter. Functionally, that would translate into either a huge increase in the payroll tax, from the current 12.4 percent to as much as 18.9 percent by 2078, or an equivalent increase in income or other taxes.
And all of this doesn't even begin to consider Social Security's other problems: a poor and declining rate-of-return for younger workers; issues of fairness for minorities and working women; the impact on wealth creation; and the lack of legal ownership and control over one's benefits.
The American people would be right to hope, therefore, for an open and honest debate over how Social Security should be reformed.

[EVDebs]

1. Nobody's talking about the $2.3 Trillion the DoD can't account for

War on waste indeed

http://www.cbsnews.com/stories/2002/01/29/eveningnews/main325985.shtml

This is about 20% of GDP unaccounted for and chimpboy is out to pay for his tax cuts to the wealthy by blaming Dems for fiscal irresponsibilty ?