Thanks for the cite, Gary. * Gary Denton ([EMAIL PROTECTED]) wrote:
> The Academy warned that infinite-horizon projections "provide little > if any useful information about the program's long-term finances and > indeed are likely to mislead anyone lacking technical expertise in the > demographic, economic, and actuarial aspects of the program's finances > into believing that the program is in far worse financial shape than > is actually indicated." That "anyone lacking technical expertise" is an interesting way of putting it. By the way, the full letter is at: http://www.actuary.org/pdf/socialsecurity/tech_dec03.pdf It seems to me that the AAASIC are stating two more-or-less objective things: 1) They disagree with some of the assumptions the SS Trustees used in calculating the infinite-horizon deficit (labor force participation, mortality) 2) The uncertainty in an infinite-horizon deficit calculation are large THe AAASIC also give their opinion that based on these criteria, an infinite-horizon figure should not be used because it is likely to mislead "anyone lacking technical expertise". So, basically, we have the AAASIC disagreeing with the Social Security Trustees. That is a very good reason to doubt the accuracy of the $10 trillion number. However, when planning for the future, you either need to make some estimate, or you can choose randomly. I'd prefer to make an estimate, the best that we can. The SS Trustees made an estimate. The AAASIC disagrees with some assumptions. Fine, the SS Trustees and the AASIC should work on the assumptions and come up with the best estimate that they can. But the guys in the trenches, who are actually trying to do the job, are the SS Trustees. They think that making an estimate of the future is more useful than assuming that everything will be zero after 75 years, which is what you are doing if you don't use an infinite-horizon model. And the SS Trustees are not the only ones who take this approach. I previously referenced a great number of people and organizations, in 30 countries around the world. So if you argue that the experts disagree on the exact figure, then that is a reasonable argument. But to say that the range is 0 to $3 or $4 trillion instead of $3 to $7 or $3 to $10 trillion, then you are being even more misleading than the AAASIC is accusing the SS Trustees of being. -- Erik Reuter http://www.erikreuter.net/ _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
