March 23, 2005
The 2005 Social Security Trustees Report
The 2005 Social Security Trustees Report lowers the estimate of Social Security's deficit through 2079 to 0.6% of GDP. Last year's Trustees Report pegged the deficit through 2078 at 0.7% of GDP.
Social Security's financial status improved even though the new forecast window adds a big deficit year--2079--to the calculation. And its financial status improved even though the Bush administration assumed:
- Reduced earnings on the part of the young.
- Reduced death rates on the part of the old.
- Lower labor force participation on the part of the young and old.
- More short term inflation.
- No change in long-run productivity growth (in spite of very good productivity news).
- No change in immigration (in spite of immigration running ahead of assumptions).
That's six thumbs on the scales, and still the long-run deficit shrinks.
So why is the headline that the financial status of Social Security has gotten worse? Can you say "an easily snowed press corps"? I knew you could.
Posted by DeLong at March 23, 2005 01:13 PM