Did the government make a Social Security goof?

Academics warn that agency officials are using outdated calculations and have severely overestimated the money available for retirees.

By Bruce Kennedy Jan 8, 2013 12:32PM

Image: Social Security Card (Comstock)The fiscal cliff has been averted for the moment, and Congress is continuing its latest game of financial chicken with a new target in sight: the upcoming debt ceiling. But two academics say all this political brawling is taking attention away from another crisis looming on the nation's horizon: Social Security.


Samir Soneji is a demographer and professor at the Dartmouth Institute for Health Policy and Clinical Practice, and Gary King is a professor of government at Harvard. On Sunday, the two boiled down their recent findings in an opinion piece for the New York Times.


According to King and Soneji, the Social Security Administration has grossly underestimated the money it needs for retiring Americans "to the tune of $800 billion by 2031, more than the current annual defense budget."


And if nothing is done, they say, the Social Security trust fund will run out two years ahead of current government predictions.


The professors say two major issues have led to these serious miscalculations.


The government’s forecasting methods for Social Security have barely changed since the program’s creation during the Great Depression -- "even as a revolution in big data and statistics has transformed everything from baseball to retailing."


And that outdated mode of forecasting, the professors note, has failed to take into account crucial factors about longevity -- especially the fact that Americans are living longer and healthier lives. Better treatment of cardiovascular diseases and a dramatic decline in smoking, they say, "are adding years of life that the government hasn’t accounted for."


The professors believe the nation faces some stark choices if Social Security is to be saved. Among the options they suggest are raising the retirement age to as high as 69 or 70, increasing payroll taxes, limiting annual cost-of-living adjustments and reducing benefits.


They also point to new research that suggests that retirement, while popular, may in itself reduce a person’s life span "by breaking lifelong routines and disrupting deep social connections." And with that research in mind, they wonder if retirement should be optional.


Given modern demographics and statistical analysis, professors Soneji and King think now is a great time to open a public debate about Social Security’s future. The constant political bickering in Congress may make this suggestion seem odd, they say -- but "the longer we ignore the problem," they warn, "the more disruptive any change will need to be to keep Social Security alive."


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996Comments
Jan 8, 2013 2:50PM
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This world has gone crazy. Some one need's to wake up. They have been sleeping to dang long

Jan 8, 2013 2:50PM
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This article is complete BS. I guess they think we’re stupid. The truth is: The Federal Government has used our Social Security Funds for things other than Social Security. The baby-boomer generation of Americans have paid into the SocSec Trust Fund for 30-40 years and our employers have matched it too. Until 2012 this amounted to the tune of 12.4 percent of every paycheck. If these collections were saved compounded at 5-6 percent, there would me more than enough funds available.

Our money was, and continues to be, stolen from the Social Security Trust Fund. It’s the thievery and spending stupid!

Jan 8, 2013 2:50PM
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Uhhhh . . . a "demographer" and a "professor of government" have opinions about Social Security actuarial calculations. Wow! Next things you know and MBA will have an opinion on theology.

 

The statisticians who work with the Social Security numbers really do know what's going on. These 2 hacks are a pair of rightwingnutjobz with political propaganda to sell.

Jan 8, 2013 2:48PM
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Stop all this disablility crap going on by giving obese people money to sit around and eat.  It was not designed to do that and it was not designed to put kids through college or young widows living off it or congress dipping into it either. I cringe everytime i see ambulance chasing lawyers on TV promising to get people the money they deserve for disability payments.  The abuses can be stopped and that will solve the problem, trouble is the neocons want to do away with it and have no idea how people will then be able to survive.  The richest nation in the world cannot fund the system?  Bull shat....they can fund defense while killing off their own citizens.  The priorities of this country have gone askew.  Many of our problems can be defined with three term. 
Greed, Lawyers, and Politicians.
Jan 8, 2013 2:48PM
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....the regime in washington dc has been partying off ss funds ever since president johnson transferred ss lmonies over to the general fund....

Jan 8, 2013 2:48PM
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Seems to me that just paying in is not the issue. The reality is that the money is spent I know it and my parents and grand parents knew it as well. As we elect folks that continue to spend it on other things than the payouts to the program participants. I have had a job for my whole adult life. In the first couple years when I made $2.50 per hour my tax paid for the first couple years will not cover a couple months of the projected amount I am to receive when I retire. Since none of the money has gained any interest the rest is paid by those currently paying in. Then toss in those who have been retired for a while complaining about not getting a raise,. The same folks that will admit they knew the money was being spent all along. All this and we then wring our hands asking where did the entitlement expectation come from. May God help us since we cannot even be honest with ourselves.

Chad

Jan 8, 2013 2:47PM
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I've known since I was a kid and first starting to pay into Social Security that there wouldn't be any funds for me when I retire.  Kinda bogus that I have to support so many, but I'll be on my own to take care of myself.
Jan 8, 2013 2:47PM
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If you are under 50 years old, forget about drawing social security. That program will be gone with the wind in 15 years. Actually, it is already too far gone to sustain its own spending. 50% of tax dollars go into programs that are supposed to be self funded. Social Security, Medicare and the Unemployment Insurance programs are simply cash cows for politicians special interest spending. Add in there the 47 million people on government assistance, and you have a country that cant afford to take care of those it promised to take care of and it cant afford to take care of those who think they are entitled to have the government take care of them. The only way to save this country is to get rid of the Liberals running it. How likely is that to happen? Not very. The Liberals that are running things are making sure they will get the needed votes by giving hand outs while going trillions deeper in debt. Yeah, power means that much to some politicians.
Jan 8, 2013 2:47PM
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also pay back the 2.6 Trillion that was borrowed
Jan 8, 2013 2:47PM
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...the gov in washington dc has been stealing ss funds ever since president johnson transferred monies over to the general fund...congress has been partying ever since....

Jan 8, 2013 2:46PM
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please for the love of god ... dont listen to what the rich man tells you !!!!!!
Jan 8, 2013 2:46PM
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How about raising the income income ceiling of those who have to pay FICA to $250,000. No one currently pays FICA on income over $110,000.
Jan 8, 2013 2:46PM
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It is absolutely ignorant to force my generation and coming ones to not only pay more in but expect us to work longer for a broken system that is unlikely to even give us a 1:1 return on the money they take from us.  I come from a family with healthy problems and likely won't ever make it to 80, what gives these politicians the right to take my money and my retirement away from me to give money to people who didn't invest in the program fully themselves? 

 

There needs to be an opt out option for social security, give me back the money you've taken and don't take any more and I won't claim any benefits at all.  I will be responsible for my own retirement which is likely to be the case anyway since by the time I'm 65 (2045) benefits will only be to 72 year olds and at 60% of what they are now.  What a ****ing joke.

Jan 8, 2013 2:45PM
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Its all good. If not I'm sure that President Homeslice wouldn't be taking $20 million tax-payer-funded vacation. We all know how much he hates those who take more than their share.
Jan 8, 2013 2:45PM
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dont listen to this bs propaganda !!! instead of putting a cap on how much u put into it u should have to put into it all yer life ...besides the rich love to trick people into things they want ....to screw the common people out of it !!!!!
Jan 8, 2013 2:45PM
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if we removed all of the illegals, who have never paid into the SS and kept that money and took away all of the money paid  to people who have never worked and put into the system, then we would have more than enough money to be paid  to the people who paid into the system.  I was always taught if you put something in then you get something out.  simple but it works.

 

 

Jan 8, 2013 2:45PM
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we need to reduce all politicians/bureaucrats salaries,perks and retirement by 50% to help recover the s.s. funds. it is a proven fact the fund was raided by  them. it was filled with political bs that all was ok.they knew at that time, it could never be repaid. it is also  proveable the fund was completely solvent and paid by the workers and employers, not the government. if they wish to leave their postion  there are many citizens out of work and very capable of replacing them. impeach them if nothing else. be interesting to see any response here.
Jan 8, 2013 2:45PM
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the  government  make   a  goof....  no  way  i  don't  believe  it.
Jan 8, 2013 2:44PM
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What part of unsustainable do the Dems don't understand.  SS has to change or it goes bankrupt and goes  away . Doing nothing makes this an mathematical certainty!!!!!!! WAKE UP PEOPLE!!!!!!
Jan 8, 2013 2:42PM
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Of course they leave out the billions or trillions of dollars the government has skimmed off of the trust fund. The government has been issuing IOUs to social security for decades under the facade they were running a balanced budget. The truth is the "surplus" in social security has been skimmed and put into balancing the US budget, so this "fiscal cliff" has been looming for decades. Now SS is going broke and we don't have that piggy bank to rob from. No wonder we're running trillion dollar deficits every year.
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