Same old misleading garbage from the Social Security "Trustees"
The Trustees of the Social Security system, a horrible group of people who lie about the health of the program they are supposed to be overseeing, were a month late in releasing their yearly report. They are so desparate to show Social Security is in trouble, but the worst they could come up with was the beginning of a shortfall in 2040--rather than 2041 as they said last year. This "one year sooner" analysis was created by tweaking the productivity rate "0.1%" higher, while lowering the interest rates expected to be set by the US government in the next few decades (which in turn lowers interest received on the Treasury bills the Social Security system has purchased as it loans its surplus to the US government to fund stupid things like the Iraq War II). They managed, however, to maintain their assumption that the Gross Domestic Product (GDP) will remain lower, over the next 75 years, than the years of the Great Depression (1930s). This accounts for the Trustees' basicly glum view.
Here is the Associated Press article. However, read these last two paragraphs and kiss the sky in thanks for Senator Jack Reed (D-RI):
"Sen. Jack Reed, D-R.I., said that if Congress approved Bush's request to make his tax cuts permanent and enacted a permanent fix for the alternative minimum tax, which was designed to tax the wealthy but is falling on more middle-class tax payers, that would represent a cumulative revenue shortfall equal to 2 percent of the total economy over a 75-year period.
"That is three times the shortfall estimated by the trustees for Social Security over the same period, Reed said."
Senator Reed most likely received his information from the Center for Budget and Policy Priorities, which posted its response to the Trustees' report here.
And here is the Center's director, Bob Greenstein, with his statement on the Trustee's report on both Social Security and Medicare. He shows the Trustees are not much better with regard to their evaluation of Medicare.
Last year, in my post dated June 29, 2005, I discussed the fact that if one merely assumed the GDP growth rate averaged a mere 2.5% for the next 75 years, the Social Security system would continue paying benefits throughout the rest of this century--far later than the year 2041.
Here's the garbage, I mean, report. Note that this year, they still think the GDP and productivity rates are going to be below most recessions in the 20th Century and early 21st Century US for the next 75 years. Also, here's Kevin Drum's (Washington Monthly) take.
Bottom line: There's more danger to the Social Security and Medicare systems from the Worst President's tax cuts being made permanent--and continued incompetent and reckless government from the Republicans (and the Joe Lieberman branch of the Democratic Party) than anything inherent in the programs themselves. That is the outrage. The insult on top of this outrage is the Trustees' consistently dishonest reports that are released every year.