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Social Security Information Systems Near Collapse
matty619 writes "An Information Week article warns that the computer systems that run the Social Security Administration may collapse by 2012 due to increased workload, and a half-billion-dollar upgrade won't be ready until 2015. One of the biggest problems is the agency's transition to a new data center, according to a report (PDF) by the SSA's Inspector General. The IG has characterized the replacement of the SSA's National Computer Center — built in 1979 — as the SSA's 'primary IT investment' in the next few years."
Now I've RTA I do.. it's just talking about hardware..
It's appropriate, since the entire "social security trust fund" is nothing but IOUs from a government that's deeper in debt than any other government has ever been in all of recorded history.
-jcr
But the US also has an economy that's larger than any other economy in recorded history. How large is the debt in proportion to the economy? How much of that debt is owed to the social security trust fund?
Year, Debt (in $B), Debt/GDP
2005 12638.4 62.77
2006 13398.9 63.49
2007 14077.6 63.99
2008 14441.4 69.15
2009 14258.2 83.29
2010 14623.9 94.27 (projected)
There were precisely six years in our nation's history when our debt-to-GDP ratio was over 90%: 1944-1949. Of course, we had a huge jobs program back then, which was pumping up the economy. We were able to leverage that momentum to pay down the debt to 50-year debt/GDP lows by the mid 1970s (although the absolute size of the debt kept increasing through that period).
Source: http://www.usgovernmentspending.com/federal_debt_chart.html
The net present value of total OASDI costs over the next 75 years is estimated to be about $5.3T, or about 37% of the present value of the debt. On the other hand, the net present value of Medicare part A costs over the same window is $13.4T, or 94% of the present value of the debt. As anyone who is familiar with the numbers will tell you, Medicare is a much larger and more immediate problem than Social Security.
Source: http://www.cga.ct.gov/2010/rpt/2010-R-0197.htm
Next time, look up the numbers yourself, ya lazy bum.
This post expresses my opinion, not that of my employer. And yes, IAAL.
Social Security has always been a pay-as-you-go system, regardless of the public's general misconception about it as "savings" or "investment". The current version of it, adopted from the recommendations of the 1983 Greenspan commission, does have the Boomer generation overpay -- but the commission's plan, which Congress promised to follow, was that the rest of the federal government would run a balanced budget, the national debt would slowly roll over into the SS trust fund, and when the Boomers retired those bonds would be paid for by borrowing from the public again. About the time the last of the Boomers died, the SS trust fund and the US public debt would sit where they were in the mid 1980s, adjusted for population, inflation, and productivity gains. Except for the balanced budget part, things are playing out very close to the commission's forecasts.
After the Boomers, the system reverts to complete pay-as-you-go, requiring a stable 6.2% of GDP. Everyone's forecasts for outlays shows them to be stable, from the SSA itself to the most conservative think tanks. Unfortunately, the commission assumed that future gains from productivity would be shared across the entire spectrum of income; if that had happened, the debate we would be having today would be regarding a permanent small adjustment of the SS tax rates down. But the productivity gains for the last 20 years have been largely captured by those making more than the SS cap, so are not being taxed. A small change in the cap formula, phased in over a decade, would erase the problem entirely.
Productivity gains are why it's not a Ponzi scheme. If you don't include such gains, you simply get the wrong answer.