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December 29, 2004
No Worries, Mate
- Social Security is Fine.
Well, here's one less thing to worry about. Amazing.Ten years ago Social Security trustees predicted that the system would become insolvent in 35 years, meaning 2029. Five years later they were still predicting that insolvency was 35 years away � doomsday had been postponed to 2034. Today, they're predicting that insolvency is 38 years away, in 2042.
What happened? Why does the insolvency date keep getting further away? How could the trustees have been so continually wrong?
The answer is all in the numbers. For instance, the future of Social Security is highly sensitive to predictions of economic growth, and the trustees assume a very conservative growth rate of 1.8% per year. That compares with expected growth of 3.9% this year, a fairly average year for the U.S. economy.
Posted by mbowen at December 29, 2004 10:01 AM
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