BDL: No. The change does boost estimated personal savings. But it reduces the government surplus by the same amount.
Left over from my days working at the Treasury is a U.S. Government
FERS account for which they send me statements every six months. At
the moment the contributions paid into and the interest accrued on
this FERS account are counted as an asset of the Federal
Government--even though it is *mine*. After the change it will be
counted as *my* asset.
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mbs: Meaning "your" asset is now part of "debt held by the public"?
Logically, is there any reason not to do the same thing with Social Security? Then the gross debt of the Feds would equal debt held by the public, if I understand this. Notwithstanding the fact that your account and the Trust Fund don't have tradable government bonds, but the other kind.
>>>>>>>>>>>>> BDL:
The question is: when does the government spend the money associated with pension contributions it makes? The old view was that the money is spent only when the government actually writes a check to the beneficiary. The new view will be that the money is spent when the pension *vests*--even though it may not be paid out for 50 years.
I think the second is an improvement. But then, I am generally in favor of running two sets of government accounts: a cash-flow balance for Keynesian stabilization purposes, and a long-term intergenerational-type accrual balance for long-term planning purposes...
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mbs: Unfortunately, we're using the accrual balance account for stabilization-not purposes, which I guess leaves the cash flow account for long-term planning of god knows what.
The logical result would seem to be that the on-budget surplus is reduced by the amount of the pension contributions, further narrowing the horizons for putting people first.
mbs