John Irons's Blog


Economic News, Data and Analysis

Something afoot at the Treasury

The treasury department is apparently starting to trickle out a series of whitepapers on social security. This first one has a headline number of $13.6 trillion, which is supposed to be the present value of the shortfall over the indefinite future. (It’s always hard to give a decent interpretation to this kind of indefinite-future calculation by itself… in fact it’s pretty close to worthless.) They do note that this is about 3.5 percent of future payroll… much less scary of a number.)
I’m not sure who their audience is for these reports. There is approximately a zero chance of anything of substance happening by way of Bush-led social security reform, and Bush has long-ago lost any credibility on the issue. Is this perhaps Paulson’s attempt to reopen the issue?
Looks like the White House seems to have quickly stated that they want to cut benefits:

Report: social security short $13 trillion – Sep. 24, 2007

A report issued by the Treasury Department said that some combination of benefit cuts and tax increases will need to be considered to permanently fix the funding shortfall. But White House officials stressed that President Bush remains opposed to raising taxes.

(PS – Did the treasury fire their graphic designers? This report looks like it came straight out of Microsoft word – no graphics, pictures of old people, or anything. Perhaps money is tight over there…)


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