1. Questions for Everyone Regarding Urgency

["Steven H. Johnson" <info@sscommonsense.org>]

1. Questions For Everyone Regarding Urgency.

Before this forum concludes, I have several basic sets of 
questions I'd like to pose to the panelists.  I'll put them out 
in separate postings.  

And, as a preface.  To me, democracy would function better if 
it worked more by quality circle rules.  In a quality circle, 
diverse viewpoints are valued, because they all help contribute 
to a better solution.  In a partisan majority rule environment, 
by contrast, diverse points of view don't seem to have as much 
value as they deserve.  

If the nation is to arrive at a solution for Social Security 
that truly works, both economically and politically, it seems 
to me that an even deeper level of bipartisanship will be needed 
than we have already seen in this forum.  Such a spirit may not 
be consistent with the norms of partisan politics, but it would 
be deeply consistent with the norms by which quality circles 
operate.

So, in the hope that this forum can function as something of an 
on-line quality circle, on to the first question.  

A.  Aren't we faced with a truly urgent need for an effective 
solution?

If one graphs up the data in the current Trustees' Report, the 
pattern is striking.  

"Over 64's" as a percent of the entire population are cruising 
along at about 12% now, and their share of the total population 
stays at 12% until about 2008.
Then the S-Curve ramp-up begins.
By 2033, "Over 64's" have grown to 20% of the entire population.
After 2033, the curve plateaus.
"Over 64's" only climb another 2% over the ensuing four decades, 
to 22% of the total population in 2075.

Exactly the same pattern can be seen in benefit costs as a percent 
of GDP, and in benefit costs as a percent of taxable payroll.  
An S-Curve ramp-up that begins in 2008, and crests about 2033.

And we have two fundamental strategic choices.
We can stay with a pay-as-you-go approach.

Or we can accumulate a really sizable pool of capital, so that 
the earnings on capital are sufficient to "fund the gap," i.e., 
sufficient to make up the difference between the payroll tax 
money coming in (at about 4.5% of GDP), and the payments to 
beneficiaries going out (at about 7% of GDP).

If we choose to stay with pay-as-you-go, difficult decisions can 
be deferred.
Thirty years from now, some unlucky Congress gets faced with the 
need to slash benefits 25% or hike the payroll tax 35%.

But if we'd rather "fund the gap," the time to start saving is 
now.
Growing the pool(s) of capital that are needed is no overnight 
task.
Considering the capital that's needed, the next three decades 
barely give us enough time.

B.  Isn't it fair to say that every year is precious?  That 
every month is precious?

There's no mystery to this ramp-up.
Everybody who's a part of tomorrow's "over 64" crowd has already 
been born.
When Y2K+8 arrives, Social Security as we've known it starts to 
go out the window.

Can't we find a truly bipartisan solution, SOON?

-Steve Johnson