Starve.Org White Noise Usenet Archive: "Re: Social security and you, and Wilhelm's inability to read statistics."

"Beldin the Sorcerer" <beldinyyz@verizon.net> wrote in message
news:87%le.13383$Ib.3002@trndny03...

> I've been really tired of this fight, largely because it's with a total
> fool.

LOL. I'm not the one who claimed that 40 years of data is cherry picking,
or that the Social Security Administration is lying when they call Social
Security insurance.

> So here's a few cites, links, and what have you.

> Let's put the formula up again : Variable names changed slightly for
> simplification.

> For social security to continue forward indefinitely as a pay as you go
> system :

> E*W*T >= B * R

> E = average earnings
> W = number if workers
> T = tax rate
> B = Average benefit.
> R = number of retirees/ recipients.

> Ignore the theoretical trust fund for the moment there Willie.

> You can rant about it in a minute, I promise.

> Ignoring the >, assuming it just balances, there is no surplus, this can
be
> rewritten T = B/E * R/W

LOL. I thought W = wages and E = employees. All my previous posts refer to
the ratios B/W and R/E. Oh, well. I will adopt your notation here. Very
confusing though. You refer to the benefit/wage ratio, then write it B/E.

> The claim can easily be made that, if the retiree/worker ratio increases,
> either the benefits / earnings ratio must decrease, or taxes must go up.

> This is slightly restated from a myriad prior posts.

> There is no debate : the retiree - worker ratio is increasing (or the
> worker/retiree ratio is shrinking)

> I have stated that the B/E ratio is relatively constant.

That isn't all you stated. You also stated that for the last several
decades, wages have increased at the same rate as inflation. When I
presented you with 40 years of data, 1963 - 2003, which showed wages had
increased at a rate 1% greater than inflation over that 40 year period, you
claimed I was cherry picking data.

> Willie the whackjob
> has stated repeatedly that Wages far outstrip inflation

I never said that. I said wages increase 1% faster than inflation.

> and therefore
> benefits have been going up slower than wages,

Well, benefits increase each year by the rate of inflation. Only the cohort
who retire in that year receive initial benefits which reflect the rate of
increase in wages during their working lifetime. Meanwhile, wages increase,
on average, 1% faster than inflation.

> so the wage/benefit ratio
> increases, and thus the benefits/ wage ratio decreases.

That seems like a logical deduction.

> Long story short, he says people earn more, so they can carry more
> recipients.

I never said that. I was just talking about balancing an equation.

> This is, simply put, a crock.

> Rather than deal with him rant : Long link warning

http://web.ask.com/redir?u=http%3A%2F%2Ftm.wc.ask.com%2Fr%3Ft%3Dan%26...

26qid%3D238C7F7DBA15D7418D60D998D0433664%26io%3D2%26ask%3DAverage%2Bearnings

%26uip%3D4613c60a%26en%3Dte%26eo%3D-100%26pt%3DPersonal%2520Income%2520Data%

26ac%3D24%26qs%3D0%26pg%3D1%26ep%3D1%26te_par%3D108%26te_id%3D%26u%3Dhttp%25

3a%252f%252fcber.bus.utk.edu%252fbea%252fearndata.htm&bpg=http%3A%2F%2Fweb.a

sk.com%2Fweb%3Fq%3DAverage%2Bearnings%26o%3D0%26page%3D1&q=Average%20earning

s&s=a&bu=http%3a%2f%2fcber.bus.utk.edu%2fbea%2fearndata.htm&qte=0&o=0&abs=Av

erage%20Earnings%20Per%20Job%20State.%20Average%20Earnings%20Per%20Job%20for

%20All%20States%3A%201969%20to%202001%20%5Bpdf%20csv%20xls%5D%20%26lt%3Brele

ased%20May%202003%26gt%3B&tit=Personal%20Income%20Data&bin=&cat=wb&purl=http

%3A%2F%2Ftm.wc.ask.com%2Fi%2Fb.html%3Ft%3Dan%26s%3Da%26uid%3D021516C0096FC17

24%26sid%3D13CB12E90BEF68924%26qid%3D238C7F7DBA15D7418D60D998D0433664%26io%3

D%26sv%3Dz6f53721d%26o%3D0%26ask%3DAverage%2Bearnings%26uip%3D4613c60a%26en%

3Dbm%26eo%3D-100%26pt%3D%26ac%3D28%26qs%3D0%26pg%3D1%26u%3Dhttp%3A%2F%2Fmyje

> eves.ask.com%2Faction%2Fsnip&Complete=1
> '

> That's average earnings data.
> Source : Center for Business and Economic Research, The University of
> Tennessee, Knoxville.
> Another long link warning :

http://web.ask.com/redir?u=http%3A%2F%2Ftm.wc.ask.com%2Fr%3Ft%3Dan%26...

26qid%3D3A2973DDDEF6974B96C30EF0B5684201%26io%3D8%26ask%3DAverage%2BSocial%2

BSecurity%2Bbenefit%26uip%3D4613c60a%26en%3Dte%26eo%3D-100%26pt%3DAverage%25

20Monthly%2520Social%2520Security%2520Benefits%252C%25201940%25E2%2580%25932

002%26ac%3D24%26qs%3D0%26pg%3D1%26ep%3D1%26te_par%3D216%26te_id%3D%26u%3Dhtt

p%253a%252f%252fwww.infoplease.com%252fipa%252fA0780010.html&bpg=http%3A%2F%

2Fweb.ask.com%2Fweb%3Fq%3DAverage%2BSocial%2BSecurity%2Bbenefit%26o%3D0%26pa

ge%3D1&q=Average%20Social%20Security%20benefit&s=a&bu=http%3a%2f%2fwww.infop

lease.com%2fipa%2fA0780010.html&qte=0&o=0&abs=Average%20Monthly%20Social%20S

ecurity%20Benefits%2C%201940%E2%80%932002.%20Year.%20Retired%20workers.%20Di

sabled%20workers.%20Non-%20disabled%20...%20widow(er)s.%20Total.%20Men.%20..

.&tit=Average%20Monthly%20Social%20Security%20Benefits%2C%201940%E2%80%93200

2&bin=&cat=wb&purl=http%3A%2F%2Ftm.wc.ask.com%2Fi%2Fb.html%3Ft%3Dan%26s%3Da%

26uid%3D021516C0096FC1724%26sid%3D13CB12E90BEF68924%26qid%3D3A2973DDDEF6974B

96C30EF0B5684201%26io%3D%26sv%3Dza5cb0dc1%26o%3D0%26ask%3DAverage%2BSocial%2

BSecurity%2Bbenefit%26uip%3D4613c60a%26en%3Dbm%26eo%3D-100%26pt%3D%26ac%3D34

%26qs%3D0%26pg%3D1%26u%3Dhttp%3A%2F%2Fmyjeeves.ask.com%2Faction%2Fsnip&Compl

> ete=1

> That's average benefits data.

> Source: Social Security Administration, Social Security Bulletin: Annual
> Statistical Supplement, 2003.

> Let's put them in a spreadsheet :

> SSi SSi wage Wage/ Ben Ben/wage Year
> Month Annualized ratio ratio
> 123.82 1485.84 7301 4.913718839 0.203511848 1970
> 196.42 2357.04 10293 4.366917829 0.228994462 1975
> 321.10 3853.20 15144 3.930239801 0.254437401 1980
> 432.00 5184.00 20307 3.91724537 0.25528143 1985
> 550.50 6606.00 25673 3.886315471 0.257313131 1990
> 671.70 8060.40 29540 3.66483053 0.272863913 1995
> 844.60 10135.2 36399 3.591345015 0.27844721 2000

> Please note : The benefits/wage ratio is going UP, though not a whole lot
> lately.
> OR the wage/benefit ratio is going DOWN, though not a whole lot lately.

> Both are "relatively constant" as I stated.
> Neither, however, trend in the direction Willie boy insisted they do.

> They go in the opposite direction.

> PLEASE don't take my word for it.

> Since we have now demonstrated this factually, with links, showing that
> Willie the fool is wrong, without even swearing at him, will he admit he's
> clueless?

LOL. No, you didn't swear at me. That has never been the problem. The
problem is, you repeatedly insult my intelligence, my sanity, and my
mathematical proficiency. You are still doing it in this post. You called
me a fool twice, and a whack job once.

Congratulations on finally presenting some data. Your argument now has some
credibility. Previously, you just pulled facts out of your ass and could
not back them up. You were still wrong when you repeatedly stated that
wages increased at the same rate as inflation. You were wrong when you
claimed 40 years of data were cherry picking. You were wrong when you
claimed that the Social Security predictive models do not account for
increased longevity.

When I presented you with the facts that the predictive models do indeed
predict increased longevity, your response was that they didn't predict
enough increased longevity. LOL! Once again, you pulled facts out of your
ass. If you ever bothered reading the report of the Social Security
Trustees, you would know they compile extensive data on how fast longevity
is increasing, then project those trends into the future. Those projections
are the best guess available.

YOUR CLAIMS THAT SOCIAL SECURITY PROJECTIONS OF INCREASED LONGEVITY ARE
INCORRECT ARE PURE BULLSHIT!!!

This is how you argue all the time. I present facts, you either claim the
facts are wrong or that I am cherry picking.

Now, back to your data. These data do definitely bolster your argument and
make it credible for the first time. The question is, are the data correct?
The links don't work, I can't copy and paste them into my browser, and I am
definitely not going to type them in.

There are two things which make me think your data are not correct.

1. Benefits increase yearly at the rate of inflation. That is not in
dispute. Over the last 40 years, wages have increased at a rate 1% greater
than inflation. That is also not in dispute, except by people who claim 40
years of data are cherry picking. The inevitable conclusion is that the
ratio B/E should decrease over time. The numerator is increasing at the
rate of inflation. The denominator is increasing at a rate 1% faster than
the rate of inflation.

2. According to your data, the B/E ratio in 1985 was 0.255, and in 2000 was
0.278. During that time period, the R/W ratio was also increasing. I don't
have the numbers handy, but you do agree the R/W ratio was increasing?
Since both R/W and B/E were increasing over that time period, that means T,
the tax rate necessary to balance the equation was also increasing.

Now the actual payroll tax rate was constant from 1985 to 2000. Therefore
the difference between the actual rate, call it A, and T, the theoretical
rate necessary to balance the equation, was decreasing. The yearly surplus
is roughly (A - T)*E*W. Now, E and W have also been increasing, but A - T
has been decreasing, if your data are correct. So why has the annual Social
Security surplus increased dramatically during this time period?

There is something fishy about your data which just doesn't add up. OK, I
just looked in the annual report of the Social Security Trustees, 2005
edition. Your average wage data is way off. Here is the average wage index
from page 98 of this PDF document --

http://www.ssa.gov/OACT/TR/TR04/tr04.pdf

1975 -- 8,631
1980 -- 12,513
1985 -- 16,823
1990 -- 21,028
1995 -- 24,706
2000 -- 32,155

Notice these are significantly different, and significantly lower than your
data. I don't know how your data were computed, but the Social Security
data is the average wages on which Social Security is paid. That is what we
are interested in.

Now, for the average Social Security benefit, you claim your source is the
2003 Annual Statistical Supplement. Here is a link to that PDF document --

http://www.ssa.gov/policy/docs/statcomps/supplement/2003/supplement03...

On page 3.3 of that document, we find Table 3.C4, which lists the average
monthly Social Security benefit received by retired workers --

1975 -- 207
1980 -- 341
1985 -- 478
1990 -- 603
1995 -- 720
2000 -- 844

Notice these data also do not match up with your data. You labelled your
data column SSI, or Supplemental Security Income. That is not what we are
interested in. There is another column in the referenced table labelled
SSI, but those numbers also do not match up with your numbers. So I don't
know how to explain the discrepancies. Either you deliberately fudged the
data, or your source fucked up. Either way, your data are wrong. My data
come directly from the annual report and the statistical supplement of the
Social Security Administration. I have given you the links. You can check
them yourself.

Now, let's recompute the B/E ratio for selected years.

Year Monthly Annual Average
Benefit Benefit Earnings B/E

1975 -- 207 2484 8631 0.2878
1980 -- 341 4092 12513 0.3270
1985 -- 478 5736 16823 0.3410
1990 -- 603 7236 21028 0.3441
1995 -- 720 8640 24706 0.3497
2000 -- 844 10128 32155 0.3150

Ahh Ha! A very different picture emerges. B/E does increase gradually, but
not nearly as dramatically as your flawed data indicate. Note that from
1985 to 1995, B/E is basically constant. But look at the 2000 data point!
B/E is actually lower than in 1980. So over a 20 year period, B/E declined
from 0.3270 to 0.3150. That is a decline of 3.7%. But you claim that
looking at many years of data is cherry picking. Your position in this
argument is that what has happened in the last few years is what is
relevant. From 1995 to 2000, B/E declined from 0.3497 to 0.3150, which is a
decline of 9.9%. That is almost 2% per year.

Nice try though, Beldin. At least you are becoming reality oriented. You
are presenting actual data, as opposed to bullshit claims which you cannot
back up. The data you presented are not accurate. Either you fudged the
data to prove your point, or your source was inaccurate. The average wage
data discrepancy may be due to your source reporting income rather than
wages. In any case, that source definitely was not reporting average wages
subject to payroll tax.

I have given you links to both the annual report and the statistical
supplement of the Social Security Administration. I suggest you study these
documents, so you will actually know what you are talking about. Among
other things, you will find in these documents --

The annual report is from THE BOARD OF TRUSTEES, FEDERAL OLD-AGE AND
SURVIVORS INSURANCE AND DISABILITY INSURANCE TRUST FUNDS.

Please note the word INSURANCE. You continue to claim that Social Security
is not insurance. The SS Trustees disagree with you. Notice that they also
blatantly claim to be the trustees of TRUST FUNDS. You also claim the trust
fund does not exist. If you are correct, then these high government
officials are lying when they say Social Security is insurance, and they are
lying when they claim there is a trust fund. I suggest you alert the
President and the Congress that the Social Security Trustees are lying to
the American public.

The projection that the trust fund will be depleted in about 40 years is
based on what the trustees call the intermediate assumptions. These
assumptions are actually quite conservative and pessimistic, which is
appropriate for trustees. For example, the intermediate assumptions assume
that economic growth will average 1.8% per year for the next few decades.
That is very pessimistic, since economic growth has averaged over 3% per
year for the last 75 years.

If you make more optimistic assumptions about economic growth and other
factors, you get the low-cost assumptions. The low-cost assumptions assume
that long-term economic growth will continue at 3%, a not unreasonable
assumption. The result of the low-cost assumptions is that the trust fund
never goes broke. You can see that for yourself on page 15 of the annual
report, for which I have given you a link.

With regard to the declining W/R ratio, with which you are obsessed, the
intermediate assumptions project that W/R will decline to about 2 in 40
years, then decline VERY slowly after that. Under the low-cost assumptions,
W/R would decline to 2.3 in about 40 years, then increase VERY slowly after
that. You can see this for yourself on page 47 of the annual report.

Wilhelm Kuhlmann (ramashiva)