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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Karen Lawrence who wrote (16436)	5/10/2005 11:55:26 PM
From: DavesM	Read Replies (4) \| Respond to of 361339

Karen, While Social Security may on paper, be able to pay all benefits through the year 2042, it is not at all certain that the Federal Government will be able to pay the checks. This is because beginning in 2018 (using 2004 CBO numbers) or 2020 (using 2005 CBO numbers) workers will be paying in less than the system will be paying out. This means that Social Security will be Adding to the Federal Deficit, not subtracting from it. Furthermore, 2042 is based on a number of assumptions: 1. Social Security is counting on a real rate of return of 3.3% on its portfolio of U.S. Treasuries. The current real rate of return on Inflation Protected Securities issued from the Treasury are yielding 1.9%. And the real rate of return on 20 year Treasuries (not inflation protected) is 1.39% (4.69 - 3.3%[2004 inflation rate]). For the first 3 months of this year, inflation is running at 4.3% - which means that 10 year Treasuries are currently yielding 0.3% after inflation. federalreserve.gov bls.gov 2. Current projections are counting on economic growth (this decade) to be at a higher pace than the 90's. 3. Current projections are counting on inflation to stay below 2.5% - till at least 2042. 4. Current projections are counting on the unemployment rate to stay at 5.2% from this point forward.