The Social Security Game

Submitted by wombaticus on Sun, 08/17/2008 - 11:01am. Tags:

Economics and Business

As a regular lurker, I've grown tired of reading about candidates' characters: Really, I'm not sure anyone is going to change his mind about that in a discussion forum, no matter how well-written.

So here's a novel idea: Let's look at a real problem -- Social Security -- and see how we'd fix it. Now, I'm of the camp that thinks Social Security will be reasonably fine until 2038, at which point I'll probably be singing in the Choir Invisible. But the increasing longevity of those who receive Social Security, as well as some interesting funding difficulties, makes it a topic that's certainly worth discussing. Both parties address Social Security in their platforms.

As it happens, the American Academy of Actuaries has an interesting online game that offers various ways to fix any Social Security shortfalls. Actuaries, supposedly, are people who don't have enough personality to become accountants. But they are some of the smartest people on the planet when it comes to matters of pensions, retirement and insurance.

So take the test, here: http://www.actuary.org/socialsecurity/game.html

and report on how you fixed Social Security, and why your choices are the best in the entire world.

They couldn't hit an elephant at this dist...

-- General John B. Sedgwick, 1864

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I know! (#110390)

by brendanm98 on Mon, 08/18/2008 - 12:21pm

Let's apply the payroll tax to income above $250k/yr as well as to income below the cap level.

Doesn't seem to be a choice, though...

Come, my friends. 'Tis not too late to seek a newer world -- Tennyson

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I figure removing the cap (#110412)

by wombaticus on Mon, 08/18/2008 - 1:51pm

would go a long way, and it did. 93%. Still deciding on the other options.

Interesting how few people advocate putting it in the stock market these days.

They couldn't hit an elephant at this dist...
-- General John B. Sedgwick, 1864

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OK: Fixed. (#110289)

by aireachail on Sun, 08/17/2008 - 1:28pm

Raised retirement age to 70 in 2030, adjusting thereafter as needed. The thing said here were some issues that will have to be tweaked. But hey...I'm the idea man. I can't bother with that.

I'll point some underutilized staff at those other details.

Excess on occasion is exhilarating. It prevents moderation from acquiring the deadening effect of a habit. - W. Somerset Maugham

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You're good. (#110292)

by wombaticus on Sun, 08/17/2008 - 3:54pm

Maybe this actuary business is easier than I thought.

They couldn't hit an elephant at this dist...
-- General John B. Sedgwick, 1864

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People often think about the (#110284)

by Brooks and B Ra... on Sun, 08/17/2008 - 2:34pm

People often think about the Social Security problem as isolated, apart from the problem of our overall long-term fiscal imbalance. It isn't. Yes, all the options presented in that game are ways to produce SS "solvency", but SS spending and SS taxation are just part of overall spending and overall taxation. The game is useful, but shouldn't be mistaken as a rational, complete conceptual framework for decision-making, since it ignores what we do with other taxes and other spending, as well as what is happening with our publicly-held debt and on-budget deficits, all of which would affect our choices from the options presented, and which could offset some of those options if chosen (e.g., raising payroll [SS FICA] taxes and lowering other taxes in a revenue-neutral way -- i.e., essentially no net tax increase -- which seems very different from just saying "I choose raising payroll taxes"), or even mean that none of those options must be taken (if we supplement SS FICA revenues and repayment of Trust Fund debt with general tax revenues).

I don't have time now to elaborate, but I'll refer you to my diaries:

http://theforvm.org/diary/brooks-and-b-rational/social-security-solvency...

http://swordscrossed.org/node/2192

http://swordscrossed.org/node/1720

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