Thursday, July 06, 2006

Low Cost Assumptions for SS Trust Fund Solvency













Bruce Webb has been posting about why the shape of curve I does not change from year to year, even as the Trust Fund exhaustion date reported by the trustees (where curve II crosses zero) has been moving to the right almost every year. http://bruceweb.blogspot.com/2004/11/what-is-low-cost-alternative-what-does.html
It seems clear to me that curve I (per the 'Low Cost' assumptions) is not an estimation so much as a calculation of a condition under which the trust fund is not overfunded. As Bruce observes, this condition has required more and more pessimistic assumptions each year. If he is correct, we will never reach exhaustion.

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