Writing for Investment News, Boston University economist Larry Kotlikoff explores the innards of the annual Social Security Trustees Report.
“Now that health care is off the front burner, it's time to fix Social Security. Social Security's trustees say the system needs only “modest changes.” In fact, the system is desperately broke.”
“The proof is buried deep in the trustees' own 2012 report in a complex table, numbered IV.B6. The system's actuaries prepare the report's tables. But what the trustees make of them is up to the trustees. Clearly this year, as in others, the trustees ignored table IV.B6. How else could they have come up with their blase statement that Congress should address Social Security's finances “in a timely way”?”
“Table IV.B6 is a long-run balance sheet for Social Security. It shows that the system's $88.9 trillion in liabilities exceed its $68.4 trillion in assets by $20.5 trillion.”
Click here to read more.