David Walker on USA debt

[Spartacus]

Re: David Walker on USA debt

Seriously, I read the rest of the post, but it didn't overcome how discredited he is by the introduction.

"Hi, I watched assholes perpetuate bullshit and now you can read about it for 29.95."

Create your own expletive.

He was a bean counter, meaning:

his job was to count the beans, make sure they went where they were supposed to[0], not to eat them or plant them to make more beans.

[0] or produce the gas they're supposed to

[Spartacus]

Re: David Walker on USA debt

Looks like they're still not taking Dean Baker's critique into account.

To jog your memory, Baker says they need to compare NPV expense calculations with NPV revenue calculations.

What they're using is net present value calculations over 100 years to bring cash outflows to the present date, and comparing this NPV calculation to various one-point-in-time measures - GDP or overall wealth, or whatever.

They're comparing an integral or sigma to a point value.
Invalid.

EDIT: not claiming this will wipe out the problem, obviously not. But "better" measures and comparisons would be, well ... better.

$112trillion in liabilities.

http://finance.yahoo.com/tech-ticker/u.s.-standard-of-living-unsustainable-without-drastic-action-former-top-govt.-accountant-says-458329.html?tickers=^dji,^gspc,dia,spy,tlt,IXJ,xlv

Reform the U.S. tax system

[ASH]

Re: David Walker on USA debt

Looks like they're still not taking Dean Baker's critique into account.

To jog your memory, Baker says they need to compare NPV expense calculations with NPV revenue calculations.

What they're using is net present value calculations over 100 years to bring cash outflows to the present date, and comparing this NPV calculation to various one-point-in-time measures - GDP or overall wealth, or whatever.

They're comparing an integral to a point value.
Invalid.

That's definitely true -- those numbers in the trillions aren't all due instantaneously.

I think the actual GAO reports look at the 'fiscal gap', and compare future obligations to projected revenue on an equal time basis.

[Shakespear]

Re: David Walker on USA debt

I remeber watching David Walker many many years ago warning about what would eventually happen. Just like many others regarding derivatives, he was not listened to. It is as simple as that.

So this comment is off base :confused:

Seriously, I read the rest of the post, but it didn't overcome how discredited he is by the introduction.

[iyamwutiam]

Re: David Walker on USA debt

Nope. SS tax is only a cash cow when it generates tax revenue in excess of program costs. That was the case, but is not so currently.

(The SS program is technically in surplus right now because it is collecting interest on trust fund assets. But those interest payments are paid out of other federal tax revenue. So the payroll tax is presently insufficient to fund program outlays, and SS is in fact using general tax funds rather than augmenting them.)

Wrong AGAIN. As people have pointed out -present revenue versus 'projections' of future costs -are at best specious. We do not live in a false mathematical abstraction of exponential rise -in fact-the real world has checks and balances and indeed countless species have been studied with very high reproduction counts (example bacteria) and have yet to take over the world.

Fallacious premises lead to foolish conclusions -even for scientists.

[ASH]

Re: David Walker on USA debt

Wrong AGAIN. As people have pointed out -present revenue versus 'projections' of future costs -are at best specious. We do not live in a false mathematical abstraction of exponential rise -in fact-the real world has checks and balances and indeed countless species have been studied with very high reproduction counts (example bacteria) and have yet to take over the world.

Fallacious premises lead to foolish conclusions -even for scientists.

You appear to be responding to my post about the impact of Social Security upon the government's cash flow, in which I pointed out that you are wrong about SS being a cash cow in the present tense. This isn't a question of future projections, but current figures. SS program expenses are going to exceed payroll tax revenue for the next couple of years, at least, because of the high unemployment rate. The last estimate I saw for the shortfall in FY10 was $29B. During this time, SS will not draw down its trust fund, because the interest paid on bonds held by the trust fund will exceed the payroll tax shortfall. However, the interest payments in question are an expense for the Treasury. The SS payroll tax is not a cash cow presently, just as I said.

[iyamwutiam]

Re: David Walker on USA debt

http://www.ssa.gov/OACT/TR/2009/tr09.pdf

[ASH]

Re: David Walker on USA debt

http://www.ssa.gov/OACT/TR/2009/tr09.pdf

That report is from May 2009.

These are figures from March 2010.

See, for instance, this article from March 25th in the NYT:

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security.

This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Stephen C. Goss, chief actuary of the Social Security Administration, said that while the Congressional projection would probably be borne out, the change would have no effect on benefits in 2010 and retirees would keep receiving their checks as usual.

The tax shortfall didn't show up in the projections from the 2009 Trustee's Report that you linked, but I'd bet you they show up in their 2010 report, which should be published in the next month or so. (This has all happened faster than expected, because of the recession, which is why I was insisting on the past tense.)

[iyamwutiam]

Re: David Walker on USA debt

Umm-correct me if I a wrong -but isn't it JUST April of 2010? If it took this report at least 2 months to compile -don't U think (perhaps -one must be VERY skeptical of the projections-particularly due to the massive bail outs of the elites?).

[ASH]

Re: David Walker on USA debt

Umm-correct me if I a wrong -but isn't it JUST April of 2010? If it took this report at least 2 months to compile -don't U think (perhaps -one must be VERY skeptical of the projections-particularly due to the massive bail outs of the elites?).

You can get access to Social Security's financial data on a month-to-month, quarterly, or annual basis here.

I agree that it can be dicey making accurate projections, but we're talking about making a projection for a federal fiscal year after we're already halfway into it. The fiscal year ends September 30th. So we've already got data for October-February (March hasn't been posted for the public yet). Here's the tally so far:

OCT 2009: taxes=$52.7B outgo=$57.5B difference=-$4.8B
NOV 2009: taxes=$51.4B outgo=$57.3B difference=-$5.9B
DEC 2009: taxes=$46.9B outgo=$58.3B difference=-$11.4B
JAN 2010: taxes=$70.9B outgo=$57.8B difference=+$13.1B
FEB 2010: taxes=$50.3B outgo=$58.0B difference=-$7.7B

So, in the first five months of FY2010, SS paid out $16.7B more than it took in through payroll tax revenue.

I think I'm justified in saying that the SS payroll tax is not currently a cash cow for the federal government. I truly don't understand why you are continuing to argue this point. Even if there had been a surplus of $16.7B in the last half-year, rather than a shortfall, it hardly constitutes the budgetary windfall it was when the FICA surplus was more like $100B.

I see what you mean about it being odd to issue a report for 2010 when the year has only just begun. I think part of the confusion is the difference between the federal fiscal year and the calendar year (and the fact that the report isn't a final tally for a given year, but rather a report made during a given year). Anyway, the FY2009 Trustee's report that you linked was published May 12th 2009. They call it "The 2009 Annual Report..." Their equivalent report for FY2010 should be out shortly. (And who am I to argue with them about the propriety of calling it the 2010 Annual Report?)

[GRG55]

Re: David Walker on USA debt

I suspect military spending would be impacted by 'tough budget limits'. Cutting military spending would be helpful. However, it isn't military spending that is steadily increasing relative to GDP. The structural budgetary problem really is entitlement spending -- specifically Medicare (Social Security to a lesser extent). Cutting military spending to, say, European levels would free up more money to support entitlement spending, but quantitatively, it isn't the growth of military spending that is itself unsustainable.

Isn't the US military one of the few government institutions that still has some credibility with the public?

[Unlike Congress, the Senate, the SEC, the Federal Reserve Bank, and good portions of the Administratiion...]

[c1ue]

Re: David Walker on USA debt

The other thing to keep in mind is what the $100B surpluses were in the context of actual annual total budget outlays of $2B or so:

2002: $2.01B
2003: $2.16B
2004: $2.29B
2010: $3.03B

Source: www.whitehouse.gov/omb/budget/fy2006/pdf/hist.pdf

[sunskyfan]

Re: David Walker on USA debt

Just a thought ... if we had used the SS surplus (since 1986 I think) to build schools, hospitals, and mass transit instead of a military to maintain cheap oil and tax cuts to fund absurd consumption we might have the medical capacity to take care of the retired, the younger class that was truly productive to feed and clothe them, and an efficient transit system so they could be mobile. We choose SUVs, condos, and mcmansions instead. We are going to get what we deserve.