Dollars and Jens
Wednesday, February 25, 2004
Greenspan urges Social Security cuts
That political independence thing, maybe there's something to that.

If you match up anticipated cash-flows from Social Security and its tax, Medicare and its tax, and general funds and the other taxes, and discount back to present, Medicare and Social Securty absolutely dwarf the general funds shortfall. One step in the right direction is Bush's partial "privatization" scheme, which makes near-term cash flows worse but long-term cash flows better. Certainly the two steps Greenspan is said to mention in the link — increase the full-benefits retirement age and link cost-of-living ajustments to a measure of inflation that doesn't consistently overstate it — should also be taken, but even all three may not be enough to really establish solvency.

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