Monday, December 13, 2004

Social Security numbers from CBO

I read this today. I thought it was interesting:

The most current CBO (Congressional Budget Office) numbers on social security have been published, and I want to give some more accurate numbers. The current estimate is that the first year in which the money taken in from payroll taxes will exceed the amount of social security benefits paid out will be 2032. In 2052 the Trust Fund will run out of money and the system will be unable to meet all of its obligations. This assumes nothing is done to change the system. At that point we would be able to pay 81% of benefits. The difference in taxes needed to keep the system solvent into the next century would necessitate a 3% increase in Federal spending. (This is about one half of one percent of GDP.)

So then I looked up America's GDP for 2003. It's $11 trillion. One half of one percent of $11 trillion ($11,000,000,000,000) is $55 billion ($55,000,000,000). So that puts things into interesting perspective.

Converting to the Chilean system is something like $3 trillion. Extending social security for another 100 years is $55 billion.

Fascinating. I'm not passing judgement as of it. I'm just... fascinated.

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