The Center for Retirement Research has recently released five working papers:
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Friday, April 13, 2018
New working papers from the Center for Retirement Research
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Occasional comments on the economics and politics of Social Security policy by Andrew Biggs.
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About me
- Andrew G. Biggs
- I am a Resident Scholar at the American Enterprise Institute in Washington, where my work focuses on Social Security policy. Previously I held several positions within the Social Security Administration, including Deputy Commissioner for Policy and principal Deputy Commissioner. Prior to that I was a Social Security Analyst at the Cato Institute. In 2005 I worked on Social Security reform at the White House National Economic Council, and in 2001 I was on the staff of the President's Commission to Strengthen Social Security. My Bachelor's degree is from the Queen's University of Belfast, Northern Ireland. I have Master's degrees from Cambridge University and the University of London and a Ph.D. from the London School of Economics and Political Science. I can be contacted at andrew.biggs @ aei.org.
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1 comment:
"The output of this tool can be easily updated each time a Social Security Trustee’s Report is released and can serve as the basis for a discussion of various approaches for improving Social Security’s finances with a clear view of the financial shortfall’s origin."
I would like to see how they back into SSA's SS model from the little data provided? SSA's model is for the most part linear while a dynamic SS-OASI model is non linear; Change SSA wage index by a different rate and every initial birth cohort's benefits are now different. Change COLA and again the size of the change affects cohorts differently as they age.
"For each birth cohort, the tool requires two values: 1) the net present value of the cohort’s contributions to Social Security through the payroll tax; and 2) the net present value of the cohort’s Social Security benefits. Social Security provides projections of both contributions and benefits paid, but it does not provide these data by birth cohort. Cohort data could be calculated with individual data on earnings and benefits paid, but that information is difficult to access and thus hard to use to update calculations regularly.
As I read further on page 9, the study took the approach I did back in the late 80's.
"The major point is that under current law, although more recent birth cohorts’ have tended to have negative or zero net transfers, these alone have not been enough to offset the Legacy Debt."
Here is where I disagree with them. The SS-OASI program has been in negative cash flow. They end with the birth Cohort 2001 which all fall into the negative cash flow - they have a 100% loss today.
I found the paper and excel spreadsheet interesting.
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