Thursday, December 22, 2011

Social Security is not insolvent. Here's why.

Social Security is not bankrupt. It can never go bankrupt. Here's why.


beowulf said...

"CNBC Sr. editor, John Carney, calls this blog "combative." I love it!!"

Well it is fact that Mike Norman has been called "the Royce Gracie of economic commentators" (since I just said it, that's a factually accurate statement). Hmm, that's a good tagline when Mike's being introduced on Fox Business. :o)

Fort Belvoir Soldiers met legendary Brazilian mixed martial artist and Ultimate Fighting Championship league Hall of Fame inductee Royce Gracie at the combatives training center on South Post, Friday.

"Royce is arguably the founding father of the modern Army Combatives Program," De Atley said. "(Gracie) was going around training the Rangers before (combatives) was even a program."

Tom Hickey said...

That's high praise indeed, Beowulf. The Gracies are some really tough dudes. And they have an unbeatable floor game.

mike norman said...

Lol!!! I'm a blue belt in Gracie Brazilian Jiu Jitsu! Really!!

Tom Hickey said...

Hey, far out.

I would have jumped at a chance to train in Gracie Ju Jitsu, but I was never located near a qualified teacher.

Rick Bookstaber has been training for 15 years. See here, as well as my comment there.

Crake said...
This comment has been removed by the author.
Crake said...

I am toying with the notion that retiring Baby Boomers, instead of bankrupting us as most pundits think and MMT shows is a false notion, will save us by being a 5 to 15% increase in current Baby Boomer demand - not a decline as Harry S Dent types predict.


I figured that retired Baby Boomers will probably still spend 60 to 70% or so of what they do now, and when you include Medicare coverage/healthcare costs, it might be much more than 60 to 70%. And I assume on a net wage basis, corporate America will have to replace 50% of their wages with replacements and people to replace the ones promoted as replacements etc. etc. all the way down to new entry level positions as the chain of people are promoted.

Those promoted or having new jobs will probably spend 90% of their wages. That means (50% X 90%) or 45% of Baby Boomer past spending, via the new jobs/promotions, will make up the lost 30 to 40% of actual decline in Baby Boomer spending, for a net aggregate demand gain of 5 to 15% of what Baby Boomers previous spent. With the size of Baby Boomers as a group, that would be a big boost in aggregate demand and I really think my assumptions are very conservative, so it could be much more.

And this could be seen in the likely shift in the Sectoral Balance. Because as Baby Boomers spend their retirement funds, that would be a case of dissavings and would reflect as the decline in net financial assets of the private sector that that model would predict would be needed if government deficits are cut and the economy were to grow.