scholarly journals Inefficiency in Social Security Trust Funds Forecasts

2021 ◽  
Author(s):  
Kajal Lahiri ◽  
Junyan Zhang ◽  
Yongchen Zhao
Keyword(s):  
Social Security ◽  
Trust Funds

scholarly journals Proposals to Restructure Social Security

1996 ◽  
Vol 10 (3) ◽  
pp. 67-88 ◽  
Author(s):  
Peter A Diamond
Keyword(s):  
Life Expectancy ◽  
Social Security ◽  
European Countries ◽  
Retirement Age ◽  
Retirement Savings ◽  
Partial Privatization ◽  
Trust Funds

This paper discusses five proposed changes in Social Security: indexing the normal retirement age to life expectancy (as Sweden is doing); investing part of the trust funds in private securities; partial privatization (as has been proposed by Senators Kerrey and Simpson, Sweden is doing and Mexico has done); replacing Social Security by individually mandated savings (as was done in Chile in 1981); and mandating employer provided retirement savings (as recently legislated in Australia and is effectively the case in some European countries.) The economics of Social Security and the politics of restoring (and preserving) actuarial balance are discussed.

scholarly journals Explaining Systematic Bias and Nontransparency in U.S. Social Security Administration Forecasts

2015 ◽  
Vol 23 (3) ◽  
pp. 336-362 ◽  
Author(s):  
Konstantin Kashin ◽  
Gary King ◽  
Samir Soneji
Keyword(s):  
Social Security ◽  
Random Noise ◽  
Companion Paper ◽  
Evidence Base ◽  
Systematic Evaluation ◽  
Systematic Bias ◽  
Social Security Administration ◽  
Quarter Century ◽  
Trust Funds ◽  
Policy Proposals

The accuracy of U.S. Social Security Administration (SSA) demographic and financial forecasts is crucial for the solvency of its Trust Funds, other government programs, industry decision-making, and the evidence base of many scholarly articles. Because SSA makes public insufficient replication information and uses antiquated statistical forecasting methods, no external group has ever been able to produce fully independent forecasts or evaluations of policy proposals to change the system. Yet, no systematic evaluation of SSA forecasts has ever been published by SSA or anyone else—until a companion paper to this one. We show that SSA's forecasting errors were approximately unbiased until about 2000, but then began to grow quickly, with increasingly overconfident uncertainty intervals. Moreover, the errors are largely in the same direction, making the Trust Funds look healthier than they are. We extend and then explain these findings with evidence from a large number of interviews with participants at every level of the forecasting and policy processes. We show that SSA's forecasting procedures meet all the conditions the modern social-psychology and statistical literatures demonstrate make bias likely. When those conditions mixed with potent new political forces trying to change Social Security, SSA's actuaries hunkered down, trying hard to insulate their forecasts from strong political pressures. Unfortunately, this led the actuaries into not incorporating the fact that retirees began living longer lives and drawing benefits longer than predicted. We show that fewer than 10% of their scorings of major policy proposals were statistically different from random noise as estimated from their policy forecasting error. We also show that the solution to this problem involves SSA or Congress implementing in government two of the central projects of political science over the last quarter century: (1) transparency in data and methods and (2) replacing with formal statistical models large numbers of ad hoc qualitative decisions too complex for unaided humans to make optimally.

scholarly journals Systematic Bias and Nontransparency in US Social Security Administration Forecasts

2015 ◽  
Vol 29 (2) ◽  
pp. 239-258 ◽  
Author(s):  
Konstantin Kashin ◽  
Gary King ◽  
Samir Soneji
Keyword(s):  
Social Security ◽  
Best Practices ◽  
Systematic Bias ◽  
Social Security Administration ◽  
Trust Funds ◽  
The Social ◽  
Forecasting Errors ◽  
Policy Proposals ◽  
Made In

We offer an evaluation of the Social Security Administration demographic and financial forecasts used to assess the long-term solvency of the Social Security Trust Funds. This same forecasting methodology is also used in evaluating policy proposals put forward by Congress to modify the Social Security program. Ours is the first evaluation to compare the SSA forecasts with observed truth; for example, we compare forecasts made in the 1980s, 1990s, and 2000s with outcomes that are now available. We find that Social Security Administration forecasting errors—as evaluated by how accurate the forecasts turned out to be—were approximately unbiased until 2000 and then became systematically biased afterward, and increasingly so over time. Also, most of the forecasting errors since 2000 are in the same direction, consistently misleading users of the forecasts to conclude that the Social Security Trust Funds are in better financial shape than turns out to be the case. Finally, the Social Security Administration's informal uncertainty intervals appear to have become increasingly inaccurate since 2000. At present, the Office of the Chief Actuary, at the Social Security Administration, does not reveal in full how its forecasts are made. Every future Trustees Report, without exception, should include a routine evaluation of all prior forecasts, and a discussion of what forecasting mistakes were made, what was learned from the mistakes, and what actions might be taken to improve forecasts going forward. And the Social Security Administration and its Office of the Chief Actuary should follow best practices in academia and many other parts of government and make their forecasting procedures public and replicable, and should calculate and report calibrated uncertainty intervals for all forecasts.

scholarly journals The Role of Pension Funds in Financing US Federal Debt

Upravlenie ◽  
2017 ◽  
Vol 5 (1) ◽  
pp. 93-97 ◽  
Author(s):  
Аксенов ◽  
P. Aksenov ◽  
Емельянов ◽  
S. Emelyanov
Keyword(s):  
Social Security ◽  
Pension Funds ◽  
Trust Fund ◽  
Payroll Tax ◽  
Trust Funds ◽  
The Social ◽  
Federal Debt ◽  
Security Funds ◽  
The Government

The article examines main trends in financing the federal debt, pointing out its structure, with focus on the role of pension funds as a source of financing; because the surplus of Social Security funds is loaned to the rest of the government; interlinks concerning this process and possible problems; the peculiarities of the federal government pension system’s investment in the government bonds. The US public debt as a share of GDP is much less than in many countries, but its volume is near 20 trln. doll. It may be classified by marketable and non-marketable securities, which are mainly owed to certain government trust funds such as the Social Security trust fund. So the Social Security trust fund, in effect is exchanging one type of debt for the other, taking into consideration that the non-marketable securities represent amounts owed to the beneficiaries. The reserves are in effect borrowed for a time by the rest of the government, and then repaid with interest when the trust funds need them back. Looking ahead Social Security will continue to be financed through its own receipts, mainly payroll tax; and Social Security Trust Fund surplus will become diminishing, with less possibilities to finance federal debt.

scholarly journals Senior Citizens, Social Security, And Healthcare Costs

2011 ◽  
Vol 9 (1) ◽  
Author(s):  
Robert E. Pritchard ◽  
Gregory C. Potter
Keyword(s):  
Literature Review ◽  
Social Security ◽  
Healthcare Costs ◽  
Senior Citizens ◽  
Extensive Literature ◽  
Extensive Literature Review ◽  
Trust Funds ◽  
The Social ◽  
Security Costs

Based on an extensive literature review this paper discusses the interrelationships among the increasing numbers of Senior Citizens and the costs of Social Security and healthcare. This discussion includes information on Social Security pertaining to its funding and the Social Security Trust Funds. The paper notes that both the costs of Social Security and healthcare are directly related to improving healthcare. The ongoing improvements in healthcare result in increasing numbers of Senior Citizens who demand further improvements in healthcare. This leads to increases in longevity adding to healthcare and Social Security costs. Finally, the paper demonstrates the underlying complexities and the lack of consensus of possible changes to improve healthcare.

The Short-Run Behavior of the Social Security Trust Funds

1977 ◽  
Vol 5 (3) ◽  
pp. 351-372
Author(s):  
Lawrence H. Thompson ◽  
Paul N. Van de Water
Keyword(s):  
Social Security ◽  
Trust Funds ◽  
The Social ◽  
Short Run

The Social Security Program and Its Funding Problems

2018 ◽  
Vol 50 (3) ◽  
pp. 149-159
Author(s):  
John G. Kilgour
Keyword(s):  
Social Security ◽  
Old Age ◽  
Disability Insurance ◽  
First Year ◽  
Real Money ◽  
Social Security Program ◽  
Trust Funds ◽  
The Social ◽  
Treasury Department

2018 was a pivotal year for the Social Security program. It was the first year since the 1983 amendments that the Old Age, Survivors and Disability Insurance (OASDI) trust funds spent more than they took in. This will continue until they are depleted in 2034. This article examines the operation of the OASDI program with particular attention to its funding. It concludes by questioning the myth that, until 2018, the OASDI trust funds held large amounts of surpluses. There has never been any real money there. It was spent by the Treasury Department as fast as it came in. The OASDI program has always been a pay-as-you-go system. That should be recognized by anyone involved in crafting a solution to the problem.

What benefits will self-employed doctors receive under social security?

JAMA ◽  
1966 ◽  
Vol 197 (6) ◽  
pp. 413-416
Author(s):  
R. J. Myers
Keyword(s):  
Social Security ◽  
Will Self
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