[Marxism] Response to marxmail post "Who's bitter now?"

[hannah b <bbhannahb@xxxxxxxxx>]

I'm a longtime lurker.  I prefer not to subscribe, but
I'd like to pass on some information in response to
this question:

"Obama said that the removal of the cap would only
affect 6% of American taxpayers who make over about
$100K a year. He says that he needs that revenue to
finance social security. So my questions: (1) does
preservation of social security require higher tax
rates?"

Essay:

Seems like something about Social Security in the news
every month. There seems to be general agreement that
SS has a "problem," perhaps it's even in "crisis." 

We're told we'll need to start dipping into the Trust
Fund in 2017. By 2041 the Trust Fund will be
exhausted, & SS won't be able to pay the benefits they
promised.

Maybe we won't even have enough money in the general
budget to repay the Trust Fund! Both Bush & Cheney
have implied as much. 

So people argue about solutions....

I'll save you all this trouble. The solution is - do
nothing. Absolutely nothing. "Do nothing" is the best
solution to a problem that doesn't exist.

"What?" you say. "Doesn't exist? Of course it exists,
everyone agrees it exists! They talk about it on TV,
in the paper, Dems talk about it, Pugs talk about it -
how could it not exist?"

These are Orwellian times. The first thing you should
do, when people try to sell you economic predictions,
is to check their figures. 

In the case of SS, it's easy to do. All the figures
under discussion come from one place - the SS
Administration's yearly Trustees' report, & they very
helpfully post their reports on the web. 

Each year the Trustees make 3 forecasts charting the
predicted state of SS financing out 75 years into the
future. These forecasts are based on assumptions about
future population, longevity, productivity, GDP & so
on. 

There's the "Low-Cost Forecast". This is the best-case
scenario - the best they expect the economy to be able
to do.

There's the "Intermediate Forecast." This is
supposedly what's most LIKELY to happen, & all the
numbers you hear in the media come from this forecast.

Finally, there's the "High-Cost Forecast." This is the
worst-case scenario; the worst the economy could do.

So, three forecasts, & the intermediate forecast is
used for all public pronouncements on SS. This is
where the numbers predicting SS shortfall come from.

OK, so what?

Bruce Webb has been monitoring the Trustees' forecasts
for 10 years, & he's discovered a startling fact.
Nearly every year, the real numbers hit the LOW-COST
FORECAST. That's right. Real economic performance most
closely matches the Trustees' BEST-CASE scenario. 

And what result does the low-cost forecast give us? 

Seventy-five years of fully-funded SS plus a Trust
Fund surplus in the trillions.

The table on his web page isn't formatted well, so
I'll reproduce the essence here: The Trustees' growth
forecasts for the next year under the Intermediate &
Low-cost assumptions, then the actual percentage
growth of that year:

1997

Int-Cost Forecst 2.5%
Low-cost Forecst 3.2%*
Actual 3.8% (+.6 better than low-cost)

1998

Int-Cost Forecst 2.5 
Low-cost Forecst 3.1* 
Actual 3.9 (+.8)

1999

Int-Cost Forecst 2.6
Low-cost Forecst 3.4*
Actual 4.0 (+.6)

2000

Int-Cost Forecst 3.5
Low-cost Forecst 3.9*
Actual 5.1 (+1.2)

2001

Int-Cost Forecst 3.1*
Low-cost Forecst 3.5
Actual 1.0 (-2.0 worse than int-cost)

2002

Int-Cost Forecst .7
Low-cost Forecst 1.6*
Actual 2.4 (+.9)

2003

Int-Cost Forecst 2.9*
Low-cost Forecst 3.8
Actual 3.1 (+.2)

2004

Int-Cost Forecst 4.4*
Low-cost Forecst 4.9
Actual 4.4 ()

2005

Int-Cost Forecst 3.6*
Low-cost Forecst 3.9
Actual 3.6 ()

2006

Int-Cost Forecst 3.4
Low-cost Forecst 3.8*
Actual 4.7 (+.4)

2007

Int-Cost Forecst 2.6*
Low-cost Forecst 3.4
Actual 2.2 (Prelim) (-.4)

Average Int-Cost 2.89
Average Low-cost 3.5*
Average Actual 3.47


There you have it. In 6/11 years, the real numbers
come in BETTER THAN the low-cost forecast (the
supposedly "optimistic" one). 

In 1/11 years, the real numbers come in lower than the
optimistic forecast, but better than the intermediate
forecast.

In 2/11 years, the real numbers match the intermediate
forecast.

In 2/11 years, the real numbers are lower than the
intermediate forecast (one of these years being the
anomalous year of 9/11).

On average, the real numbers essentially match the
optimistic forecast. 

This means fully funded SS 75 years out, & trillions
of surplus in the Trust Fund.

The implication being, we may be paying TOO MUCH
payroll tax.

So forget the private accounts v. increased payroll
tax debate. Instead, ask yourself -

Why isn't the media analyzing the Trustees' reports &
bringing you this information? Why do all the news
accounts discuss the "shortfall" as if it were
set-in-stone gospel, certain to occur? 

Why don't they even tell you that these are 75-year
economic forecasts, & discuss the likely accuracy of
75-year economic forecasts?

Why hasn't anyone in Congress noticed that the
Trustees, on average, can't accurately forecast the
NEXT year, let alone the next 75? Don't our reps have
staffers whose job it is to follow these things? Why
aren't they minding our shop? Why do they all seem to
take the existence of the "problem" for granted?

I'll tell you what I think. Eleven years of economic
data comes in too suspiciously close to the low-cost
forecast. I think the low-cost forecast represents the
real forecast, and the intermediate forecast is
ratcheted under that to produce the crisis scenario
certain actors wish to sell us. 

I believe we're being conned, & that some in the media
& in Congress know we're being conned.

The Bruce Web (has links to all the Trustees Reports &
other data).

http://bruceweb.blogspot.com/

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3092956



      
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