Quote:
Originally posted by Claeren@Dec 24 2004, 12:45 PM
There is no evidence beyond self interested mutual fund company 'studies' and fear mongering on the far right that our CPP is not going to work. Thanks to some Chretien era changes (gasp!) it is in incrediably good shape.
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What would you consider as a hard evidence? When the system finally collapses?
There is no proof of that the system is in incredibly good shame, whether theoretical or empirical,other that your faith in the system.
Quick fact about the US system: in 1950, there were 16 workers paying Social Security taxes for every retired person receiving benefits. Today there are 3.3. By 2030, there will be only 2.
How is that fearmongering on the far right? How exactly is CPP different? And how is it in incredibly good shape?
But anyway,
here is more "fearmongering from the American far right":
“The recent Trustees Report on Social Security reveals a bleak and dire federal program, headed for bankruptcy soon, and in desperate need of reform.The Trustees confirm that Social Security will begin to run a deficit by 2018, just 14 years from now, and the same date as in last year's report. Thus, while politicians dithered and tried to pretend the issue would go away, we moved another year closer to disaster. But the truly frightening numbers are found further into the report, and make clear the magnitude of the fiscal train wreck awaiting us.
The figure most cited in the media is the "present value" of Social Security's unfounded liabilities, $3.7 trillion, which represents the amount needed to cover shortfalls after the Trust Fund is exhausted in 2042. An additional $1.5 trillion would be needed to redeem the bonds in the trust fund, for a total unfounded liability of $5.2 trillion, on a present value basis. Present value calculations are an important number for economists and actuaries-they show the amount the government would have to set aside today (assuming it earned standard interest rates) to pay all promised benefits in the future. But, of course, the government cannot set aside $5.2 trillion today. That would be nearly half of our Gross Domestic Product.
Therefore, a better measure of Social Security's financial crisis is its actual cash deficit: the total amount that its expenditures will exceed its revenue from 2018 on. Measured in constant 2004 dollars, that shortfall is an astounding $26 trillion-$26,000,000,000,000.00.
To put this in context, in 2018, the first year that Social Security will run a cash deficit, that shortfall will be approximately $16 billion, or roughly the equivalent of the current budgets for Head Start and the WIC nutritional program.
Or, if you would rather look at it in terms of taxes, in the first year after Social Security starts running a deficit, the government must acquire revenues equivalent to nearly $200 per worker. By 2042, the additional tax burden increases to almost $2,000 per worker, and by 2078 it reaches a crushing $4,200 per worker (in constant dollars). And it continues to rise thereafter. Functionally, that would translate into either a huge increase in the payroll tax, from the current 12.4 percent to as much as 18.9 percent by 2078, or an equivalent increase in income or other taxes.”