Not only that, but increased wage inequality and failure to raise the tax cap means that a greater share of wage income is above the cap and therefore not taxed.
"The main reason that the program's finances have deteriorated relative to the projected path is that wage growth has not kept pace with the path projected. This is in part due to the fact that productivity growth slowed in the 80s, before accelerating again in the mid-90s and in part due to the fact that much more wage income now goes to people earning above the taxable cap. In 1983 only 10 percent of wage income fell above the cap and escaped taxation. Now more than 18 percent of wage income is above the cap." - "The Primary Cause of Social Security's Bleak Outlook Is Upward Redistribution" http://www.cepr.net/index.php/blogs/beat-the-press/the-primary-cause-of-social-securitys-bleak-outlook-is-upward-redistribution On Tue, Apr 24, 2012 at 10:09 PM, michael perelman <[email protected]> wrote: > Pear, Robert. 2012. "Social Security’s Financial Health Worsens." New > York Times (24 April): p. A 13. > http://www.nytimes.com/2012/04/24/us/politics/financial-outlook-dims-for-social-security.html?hp > > "The Obama administration reported a significant deterioration in the > financial outlook for Social Security on Monday, while stating that > the financial condition of Medicare was stable but still > unsustainable." > > "The Social Security trust fund will be exhausted in 2033, three years > sooner than projected last year, the administration said." > > "In explaining changes in their Social Security projections, the > trustees cited slower growth in average earnings of workers and the > persistence of unemployment in the slow recovery from the recession. > They lowered their projection of average real earnings in the future, > primarily because of a surge in energy prices and “slower assumed > growth in average hours worked per week after the economy has > recovered.” > > Let's see if we can get this straight. For 40 years wages have gotten > hammered by the "job creators". People become increasingly reliant on > Social Security, but the system is in trouble because people do not > earn enough to get enough taxes taken away to cover social security. > The obvious answer is to destroy social security. > > > -- > Michael Perelman > Economics Department > California State University > Chico, CA > 95929 > > 530 898 5321 > fax 530 898 5901 > http://michaelperelman.wordpress.com > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l -- Robert Naiman Policy Director Just Foreign Policy www.justforeignpolicy.org [email protected] _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
