Mirceanomics
Buna!
Okay, so here we are. Blogging. I'm going to throw up (or maybe put up) a few things about Economics, in the hope that people might have a better understanding of their world.
I'm going to start with Social Security and Medicare first, and specifically the OADI Trust Fund, which will be the first to fail.
I don't see any point in looking back. I mention that, because I'm going to allow comments, but moderate them. No names, or parties. There's plenty of blame to go round and round. You need to be looking forward, or ahead at least (I don't think people will really be looking forward at what's coming at them).
Starting with OADI, which will fail in about 2 years, then we'll look at Medicare which will fail 4 years after that, and then Social Security 6 years later (under current laws and tax rates).
Once you understand why the trust funds will become exhausted, we can examine options to delay that, and the negative impact and consequences to your economy that you'll have to deal with if you want to keep those programs.
Then we can move from the part to the whole and see how everything meshes together on a global scale.
The overwhelming majority of people are visual learners to one degree or another. Some can easily digest information aurally or verbally, but others need a visual graphic like a map, chart, graph, photo, drawing, diagram, schematic or the like to really grasp the concept(s).
We'll start with an easy chart, showing what the "you-Harvards" at Social Security believe the US Gross Domestic Product (GDP) will be over the course of the next 10 years.
"What am I looking at?"
Edit -- for real. Apparently there's some gremlin technical difficulties. I attached the graph as an attachment thing (like I really know what I'm doing).
The Black Line represents historical US GDP growth since 1961 -- averaging 2.89% per year.
The Red Line below that is my projected GDP growth through 2021.
The Brown, Orange and Blue Lines are the GDP growth for each of the three scenarios: High Cost, Intermediate Cost, and Low Cost. Note that I have substituted "Medium" for "Intermediate," because it looks very pretty formatted that way.
The Social Security Administration (SSA) believes that US GDP growth will average 4.93% for both the Low and Med Cost scenarios, and 4.99% for the High Cost.
We can sum it up like this:
SSA says that by 2021 US GDP will be $25 TRILLION
History says it should be $20 TRILLION.
Mircea say $18.6 TRILLION.
We have a discrepancy of $5 TRILLION over this period, and that is important, why?
Both Social Security and Medicare project their FICA/SECA revenues based on GDP. For those of you following along at home, you can see this on Page 197 (2012 Trustees' Report)
Table VI.F4.—OASDI and HI Annual and Summarized Income, Cost, and Balance
as a Percentage of GDP, Calendar Years 2012-90
For 2012, they believe US GDP will be $15.757 TRILLION and of that, 4.67% or $735.85 Billion will be FICA tax revenues (and 1.46% or $230.05 Billion in SECA tax revenues for Medicare).
GDP for 2012 will not be $15.757 TRILLION, and SSA will not collect $735 Billion in revenues resulting in a short-fall. Lather, Rinse, Repeat for each year through 2021, and you'll see how quickly each of the Trust Funds is exhausted.
In the next several days, I'll show you graphs of the projected FICA revenues against costs and the short-falls, and then look at the losses against the OADI Trust Fund so we can see when it will collapse.
Graphing...
Mircea
Okay, so here we are. Blogging. I'm going to throw up (or maybe put up) a few things about Economics, in the hope that people might have a better understanding of their world.
I'm going to start with Social Security and Medicare first, and specifically the OADI Trust Fund, which will be the first to fail.
I don't see any point in looking back. I mention that, because I'm going to allow comments, but moderate them. No names, or parties. There's plenty of blame to go round and round. You need to be looking forward, or ahead at least (I don't think people will really be looking forward at what's coming at them).
Starting with OADI, which will fail in about 2 years, then we'll look at Medicare which will fail 4 years after that, and then Social Security 6 years later (under current laws and tax rates).
Once you understand why the trust funds will become exhausted, we can examine options to delay that, and the negative impact and consequences to your economy that you'll have to deal with if you want to keep those programs.
Then we can move from the part to the whole and see how everything meshes together on a global scale.
The overwhelming majority of people are visual learners to one degree or another. Some can easily digest information aurally or verbally, but others need a visual graphic like a map, chart, graph, photo, drawing, diagram, schematic or the like to really grasp the concept(s).
We'll start with an easy chart, showing what the "you-Harvards" at Social Security believe the US Gross Domestic Product (GDP) will be over the course of the next 10 years.
"What am I looking at?"
Edit -- for real. Apparently there's some gremlin technical difficulties. I attached the graph as an attachment thing (like I really know what I'm doing).
The Black Line represents historical US GDP growth since 1961 -- averaging 2.89% per year.
The Red Line below that is my projected GDP growth through 2021.
The Brown, Orange and Blue Lines are the GDP growth for each of the three scenarios: High Cost, Intermediate Cost, and Low Cost. Note that I have substituted "Medium" for "Intermediate," because it looks very pretty formatted that way.
The Social Security Administration (SSA) believes that US GDP growth will average 4.93% for both the Low and Med Cost scenarios, and 4.99% for the High Cost.
We can sum it up like this:
SSA says that by 2021 US GDP will be $25 TRILLION
History says it should be $20 TRILLION.
Mircea say $18.6 TRILLION.
We have a discrepancy of $5 TRILLION over this period, and that is important, why?
Both Social Security and Medicare project their FICA/SECA revenues based on GDP. For those of you following along at home, you can see this on Page 197 (2012 Trustees' Report)
Table VI.F4.—OASDI and HI Annual and Summarized Income, Cost, and Balance
as a Percentage of GDP, Calendar Years 2012-90
For 2012, they believe US GDP will be $15.757 TRILLION and of that, 4.67% or $735.85 Billion will be FICA tax revenues (and 1.46% or $230.05 Billion in SECA tax revenues for Medicare).
GDP for 2012 will not be $15.757 TRILLION, and SSA will not collect $735 Billion in revenues resulting in a short-fall. Lather, Rinse, Repeat for each year through 2021, and you'll see how quickly each of the Trust Funds is exhausted.
In the next several days, I'll show you graphs of the projected FICA revenues against costs and the short-falls, and then look at the losses against the OADI Trust Fund so we can see when it will collapse.
Graphing...
Mircea
Total Comments 0
