From: utzoo!decvax!ucbvax!upstill Newsgroups: net.misc Title: Re: S.S. - (nf) Article-I.D.: ucbvax.762 Posted: Sun Jan 30 22:36:10 1983 Received: Mon Jan 31 04:57:50 1983 Observing the discussion of Social Security is interesting because the issue is so dry it's like neutral grey: it brings out everybody's political point of view. I'd like to disturb the rhetoric for a moment with a few observations. My wife is an actuary, so I have a little second-hand authority. First, it is a perfect misconception that Social Security is a pension fund. It is now and always has been what is known in the trade as a pay-as-you-go system: There is no sense of an "account" paid into by each worker, of vesting AT ALL. There is a "crisis" right now because the time-summed excess of revenue over expenses is approaching zero. Now there are at least three good, solid reasons for this which are completely independent of the viability of socialism: 1) There are now much fewer workers paying into the system in proportion to the number of people drawing out of the system. This is in part attributable to lower birth rates, and in part to: 2) People are now living much longer than they used to. If I remember right, several decades ago the expected survival of a Social Security recipient was five years, and it is now twelve. 3) Indexing Social Security to the Consumer Price Index. While it is obviously a good idea to shelter the old/helpless from the ravages of inflation, there is at least good evidence that CPI is an inappropriate index: its accuracy is disputable, but it also heavily reflects the cost of housing, which is a cost which we might expect many older people to have stabilized. The result of the increases in benefits is that on the average a worker draws benefits equal to his working contributions in less than two years after retirement. Them's the facts, folks. Make of them what you will Steve ~s Social Security myths