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Dear Doug and the LBOers,
<p>Does anyone know if John Paulos has written anything on the social
security numbers or the demographic numbers involved in the debate.
Paulos is the guy who wrote the book <u>A Mathematician Reads the Newspapers</u>
a few years ago. The Nation has published an article or two of his and
he seems to be ok on TV.
<p>Anybody ever met the gentleman?
<p>Sincerely,
<br>Tom L.
<p>"Rosser Jr, John Barkley" wrote:
<blockquote TYPE=CITE> Well, it is perhaps worthwhile
steppping back and
<br>asking if there really is a problem. It is not clear that
<br>there is, despite the very loud huffing and puffing that
<br>has been going on, with folks from the right wing through
<br>Senator Moynihan all in a frenzy about how "something must
<br>be done." Every news article I read, and I'm not talking
<br>about the editorial columns, states it as a fact that the
<br>social security trust fund will be bust in 20 years, or
<br>some such number.. Baloney.
<br> According to the 1998 Annual Report of the
Board of
<br>Trustees of the Federal Old-Age and Survivors Insurance and
<br>Disability Insurance Trust Fund, p. 128, assuming current
<br>funding and allocation arrangements, the ratio of the
<br>combined funds to outlays will rise and then not fall below
<br>300% ever, if the following conditions hold:
<br>1) annual US GDP growth between is 3.1% in 1998 and
<br>from 1998 to 2007 averages 2.4% annually and
<br>averages at least 2.2% annually thereafter,
<br>2) inflation averages 2.2%, and
<br>3) unemployment averages 5%.
<br> Well, guess what, folks? Current numbers
are better
<br>than all those on all counts. Certainly our current good
<br>fortune may not persist, but a projection based on all
<br>variables being somewhat worse than current performance
<br>yields a solution of no problem at all ever for the social
<br>security trust fund. We are dealing with a hysterical
<br>crock and should be asking where it is coming from?
<br> BTW, one can find an articulate presentation
of this
<br>and related arguments in Robert Eisner, "Save Social
<br>Security from its Saviors," _Journal of Post Keynesian
<br>Economics_, Fall 1998, vol. 21, no. 1, pp. 77-92. I note
<br>that Professor Eisner died last week.
<br>Barkley Rosser
<br>On Mon, 30 Nov 1998 14:10:20 EST JayHecht@aol.com wrote:
<p>> In a message dated 98-11-28 18:55:30 EST, you write:
<br>>
<br>> <<
<br>> Sorry, but you are simply wrong.
The classic pattern
<br>> of the demographic transition is for the death rate to drop
<br>> first, thus increasing the numbers of the elderly, and then
<br>> for the birth rate to drop later. That has held true
in
<br>> pretty much every nation in the world. I am not aware
of
<br>> any exceptions to that generalization (although there are
<br>> some where the birth rate has yet to decline, and others
<br>> where the death rate has gone back up again either due to
<br>> wars or AIDS epidemics). >>
<br>>
<br>> Here's my take w.r.t. funding soc sec:
<br>>
<br>> There have been several "dynamics" at work so that the original actuarial
<br>> assumptions behind SS have had to be modified:
<br>>
<br>> 1) Increased life expectancy + increased real cost of living has
to increase
<br>> the "pure cost" of the annuity. Thus, those longer-lived workers
who did not
<br>> bear the full actuarial cost of the program (and are still alive
today) need
<br>> some sort of subsidy.
<br>>
<br>> 2) Slower economic growth (1973-1996?) has also hurt the funding,
but I'm not
<br>> sure this is really a problem.
<br>>
<br>> 3) The "baby bust" (1965-1982) has created a potential problem -
not all
<br>> workers born 1946-1964 had as many kids as the pre-boomers.
Thus, the
<br>> potential imbalance in workers/retirees
<br>>
<br>> 4) We could EASILY afford the soc sec system if we taxed every god
damn $ of
<br>> UNEARNED income at something like 2-3%
<br>>
<br>> Jason
<p>--
<br>Rosser Jr, John Barkley
<br>rosserjb@jmu.edu</blockquote>
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