Re: Dean Baker nonsense about Defaulting on the National Debt

[David Farber <dave () farber net>]

Begin forwarded message:

From: Bob Schmidt <schmidt () provider com>
Date: January 9, 2009 12:20:01 PM EST
To: dave () farber net
Subject: Re: [IP] Re:   Dean Baker nonsense about Defaulting on the  
National Debt

Hi Dave for IP if you wish...

-- Bob



Good points by John.

If you look at employment, what we see is approximately 148 million in  
the workforce today.

Looking at baby boomers, I estimate approximately 2/3 will actually  
retire in their 60's - the rest will remain in the workforce in some  
fashion - and presumably continue contributing to social security to  
some degree.

There are almost as many boomlet kids as there are boomers and there  
are 1+ boomlet kids graduating from college and entering the workforce  
for roughly every boomer who will retire, making the generational hand  
off essentially a wash. Thus the labor force and employment should  
remain steady at 148 million until around 2030 at which point it will  
slowly decline.

There is a claimed social security shortfall of some $11 or $12  
trillion through 2050.
If you do the math, between now and then, $5 a day per employee  
essentially eliminates that shortfall completely.

That additional contribution could be any combination of contribution  
splits from employers and employees to get to the $5 amount. 100/0,  
0/100, 50/50, 60/40 - whatever.

Not chump change, but we used to talk about giving up a luxury like  
Starbucks and you can see that if we each forego the equivalent of 1  
pack of cigarettes a day, or one gourmet coffee a day, or a couple of  
ITunes downloads, we could essentially fund Social Security into  
perpetuity.

Bob Schmidt
Provider Marketing Group
Orlando, FL



At 09:04 PM 1/8/2009, you wrote:


> Begin forwarded message:
>
> From: John Levine <johnl () iecc com>
> Date: January 8, 2009 5:12:59 PM EST
> To: dave () farber net
> Subject: Re: [IP] Dean Baker nonsense about Defaulting on the National
> Debt
>
> I believe this originally appeared in TPM Cafe at
> http://tpmcafe.talkingpointsmemo.com/2009/01/07/president-elect_obama_suggests_defaulting_on_the_n/
>
> Wherever it was, it's nonsense.  It is quite true that there is a
> large accumulated surplus from Social Security taxes, and that under
> the CBO's very conservative assumptions, the surplus won't be spent
> down for at least 40 years.  Under more realistic assumptions, it'll
> probably be a lot more than 40 years, perhaps indefinitely.  SS is no
> financial danger in the forseeable future.





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