Horologium

April 15, 2005
A real calculator

By now, most of you are aware of the Social Security benefits calculator offered by Harry Reid and a host of other persons and organizations who stubbornly refuse to acknowledge the approaching train wreck of Social Security solvency. Of course, as can be expected when mixing leftist politics with accounting, the calculator is seriously flawed.

However, the Heritage Foundation has developed a new calculator, and it appears to be fundamentally more honest and accurate than the MoveOn-endorsed product being flacked by the Democrats and the Unions. Check it out.

(Link from Donald Luskin, via Dodd Harris.)

posted on April 15, 2005 12:08 PM

Comments:

Nope. Wrong. Donald Luskin is a hack.

While several of the assumptions underlying the calculations, such as the level of future average stock returns and the precise formulation of a plan that does not officially exist, are highly contentious and subject to debate, one such assumption is inarguably misleading. From Heritage's description of its methodology:

Today's Social Security To provide a basis for comparison, the Calculator estimates your likely benefit under today's Social Security. According to the 2004 Report of Social Security's Trustees, the program will be unable to meet its promised obligations after its Trust Fund becomes insolvent in 2042. The Calculator adjusts Social Security benefits to the level that current law requires Social Security to pay after 2042 (74 percent of promised benefits). In the most literal sense, this is the alternative to reform -- doing nothing at all.

In other words, the calculator purports to compare scheduled benefits under current law with benefits under a hypothetical privatization plan, but it cuts 26 percent from scheduled benefits, including those for people as old as 54. But if a worker is 54 years old today and retires in 2018 at age 67, he or she would receive all currently promised benefits for 24 years before the cuts that Heritage assumes would occur in 2042.

Moreover, Heritage's claim that "the alternative to" what it calls "reform" -- that is, the creation of private accounts -- is "doing nothing at all" is specious, since the only "reform" Heritage considers is a plan based on private accounts. Such a plan is not the only alternative to "doing nothing at all"; it's just the only alternative that Heritage chose to include in its calculator.

posted by peltdown on April 20, 2005 01:01 PM

Hmmm. Luskin links to the calculator without comment, so that's enough to discredit it? Give the ad hominem attacks a rest; I am quite tired of the typical lefty response of shooting the messenger, which seems to be the only trick they have left. I guess you think that the people at FactCheck.org are hacks, too, because they were the ones who debunked it, not Luskin.

Aas to the calculator, it only examines private accounts and doing nothing because a) that is what the Reid/Union/MoveOn calculator does (incorrectly) and b) the left has not put forth ANY proposal at all, save doing nothing. At least the Heritage calculator provides some sort of comparison, and uses a more sound set of figues than the Reid/Union/MoveOn sham. Additionally, if you put in the correct dates for your age, you will get accurate figures, which change for each age group. The Reid calculator does not account for the drop in benefits (at all) that will occur in 2042.

posted by timekeeper on April 20, 2005 05:29 PM

"the only trick they have left"
"that's enough to discredit it"
???
No. You're wrong, Factcheck.org didn't accurately debunk it. And it wasn't an ad hominem, just a sidenote. Luskin has erred so many times as to discredit him. I know you won't check for yourself, but you should.

And calm down, I wasn't trying to attack you personally. Did you even read the section I pasted in above? Respond to that.

Regardless of hackery from wherever, all of these calculators (on both sides) are going to have fudging in them, mainly because there is NO PLAN OUT THERE on either side besides maintaining the status quo. Bush has said numerous times that he doesn't have a plan yet. Look it up. And there's no reason the Dems should save him on this sinking, unpopular issue by proposing a plan for the Repubs to tear apart. It's his agenda, not their's. Why don't we fix something that's in a lot more trouble, like Medicare?

posted by peltdown on April 20, 2005 06:25 PM