WILLisms.com: Social Security Reform Thursday: Week Sixty-Three -- Lost Time, Growing Shortfall.

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Social Security Reform Thursday: Week Sixty-Three -- Lost Time, Growing Shortfall.

Thursdays are good days for reform, because they fall between Wednesdays and Fridays. And reform is a long-haul process, not a fleeting event. So we're going to keep plugging along with the case for reform, even as the issue goes off the political radar screen.

That's why WILLisms.com offers a chart or graph, every Thursday, pertinent to Social Security reform.

This week's topic:

$600 Billion Additional Shortfall.

Over the next 75 years, the shortfall in Social Security will be 4.6 trillion dollars, up 600 billion dollars from last year. All this, according to the 2006 Trustees Report.

Just to visualize the shortfall in graph form, witness the following, adapted from the most recent Social Security Trustees Report (.pdf):

The total "ad infinitum" (not really infinity, just the very long term) shortfall, meanwhile, is now 13.4 trillion dollars, up from 10.5 trillion dollars in the 2003 report. Most of this increase is based entirely on lost time.

All of these figures are current dollar figures.

What this proves is that we desperately need to fix Social Security, before we waste any more time letting the problem fester. Social Security currently consumes 4.3% of America's GDP; in 2030, it will consume 6.2%. That's substantial, and this proves that failing to reform Social Security until the "last minute" is not an option without negative externalities. Secondly, we can-- at present-- fix Social Security without terrible economic pain; indeed, protected personal Social Security accounts in a modernized system would provide returns far greater than workers receive today, all while making the system self-sustaining and solvent.

It's time for reform.

The clock is still ticking:

Tune into WILLisms.com each Thursday for more important graphical data supporting Social Security reform.

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Previous Reform Thursday graphics can be seen here:

-Week One (Costs Exceed Revenues).
-Week Two (Social Security Can't Pay Promised Benefits).
-Week Three (Americans Getting Older).
-Week Three, bonus (The Templeton Curve).
-Week Four (Fewer Workers, More Retirees).
-Week Five (History of Payroll Tax Base Increases).
-Week Six (Seniors Living Longer).
-Week Six, bonus (Less Workers, More Beneficiaries).
-Week Seven (History of Payroll Tax Increases).
-Week Seven, bonus (Personal Accounts Do Achieve Solvency).
-Week Eight (Forty Year Trend Of Increasing Mandatory Spending).
-Week Nine (Diminishing Benefits Sans Reform).
-Week Ten (Elderly Dependence On Social Security).
-Week Eleven (Entitlement Spending Eating The Budget).
-Week Twelve (Benefit Comparison, Bush's Plan versus No Plan).
-Week Thirteen (Younger Americans and Lifecycle Funds).
-Week Fourteen (The Thrift Savings Plan).
-Week Fifteen (Understanding Progressive Indexing).
-Week Sixteen (The Graying of America).
-Week Seventeen (Debunking Myths).
-Week Eighteen (Debunking Myths).
-Week Nineteen (Reform Needed Sooner Rather Than Later).
-Week Twenty (Global Success With Personal Accounts).
-Week Twenty-One (GROW Accounts: Stopping The Raid).
-Week Twenty-Two (Millions of Lockboxes).
-Week Twenty-Three (Support for Ryan-DeMint).
-Week Twenty-Four (KidSave Accounts).
-Week Twenty-Five (Latinos and Social Security).
-Week Twenty-Six (AmeriSave).
-Week Twenty-Seven (Cost Of Doing Nothing).
-Week Twenty-Eight (Chile).
-Week Twenty-Nine (Entitlement Spending Out Of Control).
-Week Thirty (Reform Better Deal Than Status Quo).
-Week Thirty-One (Social Security As A Labor Cost).
-Week Thirty-Two (Social Security And Dependence On Government).
-Week Thirty-Three (Social Security, Currently A Bad Deal For African-Americans).
-Week Thirty-Four (Longer Life Expectancies Straining Social Security).
-Week Thirty-Five (Howard Dean & Salami).
-Week Thirty-Six (Growing Numbers of Beneficiaries Draining Social Security).
-Week Thirty-Seven (The Crisis Is Now).
-Week Thirty-Eight (Disability Benefits).
-Week Thirty-Nine (Broken Benefit Calculation Formula).
-Week Forty (German Social Security Disaster).
-Week Forty-One (Crumbling Pyramid Scheme).
-Week Forty-Two (Overpromising, Globally).
-Week Forty-Three (Demographic Wave).
-Week Forty-Four (The Jerk Store).
-Week Forty-Five (Defined Benefit Plans).
-Week Forty-Six (Even The Empty Promises Are A Bad Deal).
-Week Forty-Seven (Our Aging Population).
-Week Forty-Eight (The Tax Increases Required To Cover Social Security's Costs).
-Week Forty-Nine (Much Longer To Get Your Money Back From Social Security).
-Week Fifty (A Vote, At Last).
-Week Fifty-One (We Can Do Better).
-Week Fifty-Two (Socialist Security).
-Week Fifty-Three (China Has The Same Problem, Only Worse).
-Week Fifty-Four (Potential Crisis Size).
-Week Fifty-Five (The Crisis Moves Closer).
-Week Fifty-Six (Big Brother Social Security).
-Week Fifty-Seven (Personal Accounts Are Awesome).
-Week Fifty-Eight (Private Accounts and Presidential Proposals).
-Week Fifty-Nine (The False Promises Of Social Security = Unwise Investing/Saving).
-Week Sixty (Declining Rate Of Return).
-Week Sixty-One (Entitlement Spending Threatens America's Defense Capabilities).
-Week Sixty-Two (Dismal Rates Of Return Only Getting Worse).

Posted by Will Franklin · 19 October 2006 06:58 PM

Comments

Will, many thanks for your continued work dramatizing the worsening size of the Social Security shortfall.

The most interesting development of the last week may be that 130 candidates for Congress have signed the For Our Grandchildren pledge to fix Social Security. http://forourgrandchildren.typepad.com/blog/2006/10/what_a_week.html

The FOG blog notes that the vast majority of those who have signed the pledge are challengers rather than incumbents. Equally noteworthy are that the signers come from both sides of the aisle. This is powerfully suggestive that the entrenched opposition to Soc Sec reform in Washington is based more on politics than on principles. For reasons you and others have cited, serious analyses all recognize that this problem isn't going away, and legislative action will be needed to correct it.

Another noteworthy quote this week comes from no other place than AARP. http://www.montereyherald.com/mld/montereyherald/news/nation/15662321.htm. An AARP spokesperson admitted that, despite claims to the contrary, no one in Washington is seriously talking about "complete privatization," the term used by reform opponents to incite opposition even to modest Social Security accounts within the federally-administered Social Security structure. Previously, Sebastian Mallaby of the Washington Post had noted that "privatization" was an inccurate scare term as well, when applied to reform proposals: http://www.washingtonpost.com/wp-dyn/content/article/2006/10/01/AR2006100100872.html

All in all, an interesting week; more and more voices being heard in recognition of the need to fix the system.

Posted by: Feverishb at October 20, 2006 06:33 AM

Hmmm? Does that mean they are going to bury Soc. Sec.?

Posted by: zsa zsa at October 23, 2006 06:13 AM