The public policy blog of the American Enterprise Institute

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Discussion: (1 comment)

  1. re: “If you look at the annual Social Security Trustees report”

    I’d suggest being skeptical of the trustees report. It turns out that even aside from the recent critique of its demographics assumptions printed in an NYT oped, there are other major problems with the forecast that are easy to spot with a critical examination of it (for instance their “high cost” scenario is high cost in nominal dollars, but turns into the *low cost* scenario if you adjust for inflation, which is a clue to some oddities in it). Historically they have a history of both being off the mark but more importantly overconfident in the accuracy of their estimates, e.g. this page notes:
    “The 1950 annual SSA report projected US population in 2000 to be worst case 199 million, best case 173 million. In reality it turned out to be 282 million, 42% above their highest projection. Imagine if their real costs turn out to be 42% higher than their current projections”

    It goes on to explore other problems with the forecasts in gory detail.

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