Draining the Social Security Trust Fund

[John K. Taber]

"christian a. gregory" <christian11 at mindspring.com> wrote:
<
> Second, the positive balance until 2004 remains the same under our
> assumptions, and still feeds the Trust Fund, which continues to grow
> per estimates. But at 2004, the balance is reduced from 10.62 to 0.06.
> That is 10.56% of OASDI income that does NOT go to fatten the Trust
> Fund.

I don't get the 10.62 number. That's the cost in 2004, right? How is it
a
reduction in the balance? (Or am I reading this sentence wrong?)


>

Thanks. That's a dumb error. It should read "But at 2004, the balance
is reduced from 2.06 to 0.06. That is 2% ... etc."

"Max Sawicky" <sawicky at bellatlantic.net> wrote:

<
You should distinguish more clearly a deficit in the flows
to one in the balance.  As you note later, 2015 is a deficit
in terms of flows -- expenses exceed income.  The Fund has a
positive balance till 2030-something.  In principle, it is only
then that revenues or benefits would need to be changed to
finance the program.  (You won't find it in the Actuaries
reports, but the Unified Budget is projected to have enough
revenues to supplement the Trust Fund, without going into deficit,
until 2050.)
>

Thanks Max. The distinction between flow and balance did not
occur to me. The Trustees Report uses the column heading "Balance"
so I need to think a little how to work this in.

I'll look up the CBPP report by Peter Orszag. I could give
a pointer to it.

--
John K. Taber