“What is good for Social Security is good for America”.
Some of the variables include:
-Rising GDP
-Modest inflation
-Expanding employment (low unemployment)
-Worker productivity
-Innovation
-Rising population
SSA evaluates the prospects for the variables and produces a forecast. They create three alternative cases. They call them the Intermediate and the High/Low cost assumptions. That’s a bit murky. A better description might be:
Intermediate = What we are hoping/assuming will happen.
High Cost = Bad News!
Low Cost = Break out the Champagne!
Now consider how SSA looks at the highly emotive issue of illegal immigration/undocumented workers. SSA refers to this group in the PC way as “others”. This from the SSA 2010 report to Congress, page 84.
Note that the “What We’re Expecting” case has illegal immigration at 400,000 per year for the next decade. The “Let’s Party!” case has the average over 500k. Heaven forbid that illegal workers fall to only 200k per year. That would be the “Worst Case” outcome. Looking at this one has to wonder what would happen if illegal immigration fell to zero. Clearly if 550k is the good news then zero must be very bad news.
So it is not always correct that what is good for SSA is good for the USA. It makes me wonder about those other categories where the interests appear to line up but actually to do not.
As a mature economy we can only achieve high rates of growth with significant expansion of debt at every level. Consumers, corporations, cities, towns, states and of course the Feds all have to borrow and spend more if we are going to have the growth that SSA (and all other public and private entitlements) so desperately needs.
Debt = Growth
Growth = Good, therefore,
Debt = Good
Our dependence on illegal immigration to sustain growth is not unlike our need for debt to fire the engines. But like illegal immigration, debt/growth has a dark side to it. If you want evidence of that fact just consider what Bernanke is going to unleash on us. Yes he might achieve some growth with his QE-2. But what is the real cost for that growth?
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is it wise to expect illegal immigration to be high in case of sub-par growth in the future ??
ReplyDeleteThe SSA's assumptions are moronic because they (must) believe the immigrants bring money with them.
ReplyDeleteThe marginal return on immigrants is an assumption that cannot bear fruit in a fuel constrained economy where employment is a zero- sum game. 500k latinos per year does not cover unemployment bennies much less Social.
It's more scrounging at the bottom of the (game theory) barrel.
Additionally, the $1 trillion in QE will go vanish down the zombie TBTF rathole. This is the outcome of foreclosure- gate.
Once the big banks get bailed the rest will line up. The banking sector is the biggest rathole (currency trap) of all.
What a mess ...
Can't the elimination of illegal immigration be balanced by increasing legal immigration? I would speculate that there are zillions of hard working, intelligent folks from Asia dying to find a way into America so as to build their future. STrikes me that the injection of qualified 'human capital' into the system could put off the insolvency issue around SS and perhaps even Medicare for decades to come. Of course, one has to get past the xenophobes first, which clearly is a high hurdle.
ReplyDeleteOf course, one has to get past the xenophobes first, which clearly is a high hurdle.
ReplyDeleteThat's right, because clearly only "xenophobes" would want to preserve something of America's demographic heritage.
A Nation of Widgets: The Wall Street Journal and Open Borders
And that's quite a lovely sentiment: allow in a bunch of foreigners so you can tax them. While demographically trashing the country. A two-fer.
Here's what I would do if I was one of those "zillions": As soon as I had an electoral majority, I'd elect people who'd change the law so that I wasn't having the shit taxed out of me to pay the retirement costs of a bunch of mostly white retirees. After all, they are so yesterday's America.
A clarification. Illegals get fake SS# and have payroll taxes taken out. But they don't claim benefits as they do not get enough earnings. (they can get benefits if they do)
ReplyDeleteSS has said they have collected between 120 and 240 Billion of payments from illegal workers. That is why SSA "looks" better when illegal immigration is both high and sustained.
Here is the link to what Bruce is saying that he wrote about before. Bruce I think this is what you are referencing. If there is another link please post it.
ReplyDeletehttp://brucekrasting.blogspot.com/2010/09/ss-to-pay-100s-of-billions-to-illegal.html
As strange as it sounds someone who uses a fake SS number(breaking the law through forgery) can draw benefits. Whether they know this or not is entirely a different story. The minute they do SSA is even more screwed.
AA