Comments for Yahoo Assigns Arithmetic Challenged Team to Cover Social Security at http://www.cepr.net , comment 1 to 15 out of 15 comments http://www.cepr.net Wed, 19 Jun 2013 02:27:24 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18031 This is definitely one of those zombie ideas that Krugman talks about. Knowledgable people like Dean aren't visible enough to educate ordinary folks. They watch tv or read the paper without having the time or foundation to critically evaluate the information. It's really poor practice, journalistic malpractice, for news outlet to let politics or sensationalism mislead people like this. It's an easy way to have an uninformed electorate and perpetuate industry agendas. - jay Sat, 11 Aug 2012 02:54:38 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18029 Dean, It's the AP reporter that's dumb as rocks. Yahoo is just a computer hosting their stories. - NP Fri, 10 Aug 2012 11:54:22 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18028 Again, bear in mind this key quote from the study: [b] "The 'lifetime value of taxes' is based upon the value of accumulated taxes, as if those taxes were put into an account that earned a 2 percent real rate of return (that is, 2 percent plus inflation)" [/b] - Joe Emersberger Fri, 10 Aug 2012 04:41:40 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18027 Thanks for the response, Dean. And thanks for addressing this study, it appears I'm in for a four part series on this over the coming weeks from my local newspaper. - Jerry Fri, 10 Aug 2012 04:35:53 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18026 Thanks Dean, and Joe Emersberger and others who get the "present value" lie. The fact is that Social Security was never meant to make you rich. It was meant to provide insurance against the worst kind of poverty. It can ALWAYS pay enough to do that, with a premium (payroll tax) low enough to leave you plenty of money to invest and hope to get rich. But keep that insurance just in case. It's not so much that the Yahoo authors can't do arithmetic, it's that they are highly paid liars. You and I probably can't compete with them. But we could do a better job of explaining to people exactly what SS is. Hint, it isn't welfare either. It is the workers saving their own money in an insurance plan. Turn it into welfare by making the rich pay for it, and it will go the way of welfare as we knew it. For those who haven't heard... SS can always pay "enough" (more than today) even if NOTHING AT ALL is done. But if today's workers want a benefit that keeps up with their rising standard of living and their longer life expectancy, they can pay for it with a raise in their own payroll tax of one half of one percent per year. That's about forty cents per week each year, and most workers will only pay half of that. Full disclosure: because of the bad economy, Trustees are projecting that the rate of increase would probably need to be one full tenth of one percent each year for the next twenty years... that's eighty cents per week... while wages are going up eight dollars per week. And continue to rise at decreasing intervals through the rest of the century... but still averaging one half of one tenth percent per year... leaving future workers with a higher tax rate but more than twice as much money after paying the tax and twice as much money in retirement. SS ain't broke. Unless you let them break it. - coberly Fri, 10 Aug 2012 04:27:58 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18025 This article illustrates why Socrates held rhetoricians (who these days masquerade as reporters) with great disdain: intuition is often wrong or simply misleading; people tend to confuse intuition with knowledge and emotion for logic/arithmetic. - David Fri, 10 Aug 2012 04:17:39 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18024 The debate about SS is typically conducted on the basis of projections, some of which are made by people who are effectively lying and some by people who don't know what they're talking about. Actually, even the best of economists can't project 30 years into the future (or even 2 years for that matter) - they're not clairvoyant. We should never lose sight of the fact that private retirement simply does not work; this has been demonstrated repeatedly. The crash of 1929 wiped out the savings of many people, and SS was started to take care of this situation without relying on Wall Street. That is, the program exists because private retirement had failed miserably, not because of projections. Now it has happened again as the collapse of the housing bubble wiped out housing wealth, but instead of learning from experience politicians are pressing to revert completely to the failed system and the media are largely supporting them. - skeptonomist Fri, 10 Aug 2012 04:03:53 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18023 I sure wish the Ms. Sorrentinos of the world would stop lecturing us. And, if she is going to lecture us could she at least explain what "smart" investments are available in 2012? - Kat Fri, 10 Aug 2012 03:52:27 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18022 Why cite Yahoo? Ohlemacher's AP atrocity ran in at least 700 newspapers, none of whom seem to have noticed that an "average" couple having contributed $600,000 to Social Security is absurd. Anyhow, for once I beat you to a story: http://downpuppy.blogspot.com/2012/08/asspress-hack-vs-social-security-part.html - Downpuppy Fri, 10 Aug 2012 03:46:46 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18021 The AP article sows confusion by comparing taxes paid to benefits received without explaining that it is the present value (including the hypothetical interest earned on taxes) that is at issue. Most people take the taxes/benefits comparison literally. It seems useful to explain that Social Security does what an idealized pay-as-you go system should do--it gives the average worker a modest return on the taxes paid, roughly equal to the rate of growth of the labor force adjusted for technology. The article actually does a good job of explaining all the insurance features that you get for your money, such as disability, survivors, etc. (The short version that ran in my local paper left that out-giving readers the impression that SS is now a total rip-off.) So there is room here for some op-eds by progressives! - tom m Fri, 10 Aug 2012 02:20:02 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18020 Jerry, I should have made clear that most workers earn considerably less than the average over their working careers. The SS benefit is based on a worker's best 35 years. Many workers, especially women, will have some number of years of zero earnings. Even when they do work, the typical worker gets less than the average, which is boosted by including very highly paid workers. Looking at the payback for an average worker is showing the situation of someone who earned far more in their life-time than a typical worker getting Social Security benefits. - Dean Fri, 10 Aug 2012 02:08:26 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18019 Since Yahoo has had on average one CEO per year for the last five years this proves the absence of structural unemployment at Yahoo. In fact it proves the opposite, that Yahoo is attracting over qualified workers to do the job with unnecessary high pay. As Baker would say, like anything that is overpriced, this creates perverse incentives to write scary inflammatory stories about SS going bone dry even as it is 80% funded in the out years. This moral hazard will be corrected as the planned layoffs proceed, pay declines to match skills and follow-up corrections appear in mea culpa articles based on objective facts. - Last Mover Fri, 10 Aug 2012 02:07:38 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18018 Jerry, The key words in Dean's remark that you quoted is "standard return". The study didn't simply adjust lifetime social security taxes paid for inflation. They added a 2% rate of return on top of that (i.e. a 2% "real" rate of return). Is it fair to assume that the government should be able to pay back an average earner's liftetime SS tax money with with interst that works outs to 2% above inflation? For example if inflation rate avergae 3% over a person's lifetime, should the gov pay it all back at a nominal interst rate of 5%? How easily could an average earner have invested the tax money on their own and garantteed themselves a very safe 2% [b] real [/b] rate of return? That aside, the yahoo article is clearly wrong about the study showing that avergage eaners will not get their SS tax money paid back. They will, but at what real rate of return is the question. - Joe Emersberger Fri, 10 Aug 2012 02:05:00 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18017 So sad that the populace is being brainwashed by the hoards of hate radio liars, and that the real SS CBO projections are not more widely known. - Bart Fri, 10 Aug 2012 02:04:19 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/yahoo-assigns-arithmetic-challenged-team-to-cover-social-security#comment-18016 "Also, the study showed that most workers would in fact get more than the standard return on the money they put into Social Security." Not sure what you mean by this, it seemed pretty clear to me from looking at the study that almost everyone from 2010 on was paying more in taxes than they were getting back in benefits for social security (not SS and medicare combined). It seems to me, rather than having a situation where we need to cut benefits for social security, we should be focusing on lowering the FICA tax rate so that people will be getting more out than what they paid in. Printing the money, raising it from financial transactions tax, or raising the SS payroll limit all seem like viable solutions to me. In either case, the recommendations for SS from both sides of the aisle are precisely 180 degrees backwards from what they should be. - Jerry Thu, 09 Aug 2012 18:12:04 +0100