Social Security: separating facts from rhetoric

http://www.ap.org/Content/Press-Release/2012/Social-Security-separating-facts-from-rhetoric

http://bigstory.ap.org/article/social-security-still-good-deal-workers

My biggest surprise was finding out that most people working today will pay more in taxes than they will receive in lifetime benefits. I started out trying to compare the returns from paying Social Security taxes to the returns someone could get from private retirement plans. I didn’t expect to discover negative returns for Social Security.

My next biggest surprise was when I found a table buried in the Social Security trustee’s annual report that showed the difference between projected tax revenues and scheduled benefits for each of the next 75 years. I added up all the years and the shortfall was $134 trillion. That’s not a typo, and I’ve never seen that number before. That number, of course needs context because $134 trillion won’t buy as much in 2086 as it would today. But even when the shortfalls are adjusted for inflation, they’re enormous: a total of $29.5 trillion in 2012 dollars.