Tuesday, February 15, 2011

Social Security Trust Fund to Go Under in 2035?

Jed Graham does some back-of-the-envelope math regarding Social Security's long-term financing, based on CBO's projections of a grimmer short-term prognosis for the system's revenues and costs. I don't know for sure how the short-term will play into the long term, given that lower payroll tax revenues today will tend to produce lower benefit obligations in the future, although not always on a one-for-one basis. Nevertheless, we don't have reason to be complacent.

1 comment:

Arne said...

The purpose of the trust fund is to provide a buffer against the year-to-year changes. It has a target of 100 percent of one year's costs in normal circumstances. The folks I know who say do nothing now are still saying we need to do something well before depletion. It will be down to 100 percent sometime in the middle 2020s.