Social Security and the Federal Deficit

Source: Lawrence Mishel and Monique Morrissey and Harry C. Ballantyne, Economic Policy Institute, Briefing Paper #273, August 2010

From the press release:
Social Security is financially sound through 2036, and modest increases in revenue can close the shortfall expected in 2037, a new analysis by Economic Policy Institute researchers Lawrence Mishel and Monique Morrissey and former Chief Actuary of Social Security Harry C. Ballantyne finds. Furthermore, Social Security cannot add to public debt over the long term because it is prohibited from borrowing.

The analysis, Social Security and the Federal Deficit: Not cause and effect, explains that Congress made reforms to the Social Security system in 1983, when Ballantyne was Chief Actuary, that fully accounted for both Baby Boomer retirements and increases in life expectancy. The long-term finances of Social Security do need to be shored up due to a range of economic factors, including growing wage inequality, but this can be accomplished with an increase in revenues equal to 0.6% of GDP.

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