Just the facts about Social Security

When you dig deep into those reports, you see that the actuarial calculations- in other words, based upon the demographics; how many people are going to be working; how many people are going to be living; life expectancy- there are a whole bunch of variables that build into that- they change those numbers and say, “Well, we’re going to have more immigration, so there will be more people paying into the system.” But what these calculations don’t show is what will it then cost to pay those people when they retire? Does that make sense?

DS: Right, because they are assuming the immigrants won’t be receiving Social Security, not paying into it. They’re not double-counting.

JA: Well, they’re not assuming they won’t be receiving it- what they’re doing is they’re backloading the calculations and- let me get the quote here from the U.S. Treasury Department- the simple time horizon calculations (in other words, the 75-year unfunded liability, whatever it may be)- I’m quoting here, “Understates financial needs by capturing relatively more of the revenues from current and future workers and not capturing all of the benefits that are scheduled to be paid to them.” So, there are numerous ways of calculating what kind of shape the Social Security system is in. Weiner is doing his calculations, but there are other ways, more accurate ways, of doing this. I, personally, think the best way to look at it is the way private corporations are forced by law to look at their pension obligations, which is called the “Closed Group Unfunded Liability,” and when you look at these numbers, they are far more than the numbers that are commonly cited in the media, and by people like Congressman Weiner.

You’re looking at approximately $16 trillion projected shortfall. If you who’s in the system right now, what they’re going to take out in benefits, and what they’re going to pay in taxes, the Social Security system is about $16 trillion in the hole.

DS: Is that from the Treasury Report earlier this year?

JA: That is from the 2009 Treasury Report, yes.

DA: And that Treasury Report was very devastating.

JA: It’s an Obama administration document, okay, so we’re using his numbers.

DS: James, I really appreciate your time. If I have any more questions, may I follow up by e-mail?

JA: Of course.

Dustin is a political commentator who contributes to www.race42012.com and is the editor-in-chief for www.thelobbyist.net. He is a former intern with The Heritage Foundation, the former Assistant Director of Communications for a health care trade association, and is currently an intern for The Laura Ingraham Show.