Category Archives: deficits

Is Social Security running out of money?

On Friday, the trustees for the Social Security and Medicare trust funds released their annual reports. A typical summary in the press is this one from the Los Angeles Times:

The trustees overseeing the finances of Social Security and Medicare issued their latest report on Friday, declaring that a) the Social Security Trust Fund is expected to run out of money in 2035, the same estimate as last year; b) Medicare’s hospital trust fund is expected to run out of money in 2026, a two-year improvement over last year’s estimate; and c) the Disability Insurance Trust Fund is expected to run out of money in 2016, just as projected last year.

Here’s why I don’t believe that’s the correct way to think about these numbers.

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Sovereign debt concerns in 2013

Interest rates on government debt for a number of European countries– notably Greece, Portugal, Ireland, Italy, and Spain– shot up considerably during 2010-2012. Those yields have fallen significantly from their peaks, though these five countries still face higher borrowing costs than most other countries in Europe.

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The contributions of Reinhart and Rogoff

With all the heated discussions of the last two weeks, it is important to keep perspective on which issues are in dispute and which are not. Let me state plainly something on which I think we ought to be agreed: Carmen Reinhart and Ken Rogoff’s 2009 book, This Time Is Different: Eight Centuries of Financial Folly, is a valuable work of scholarship that continues to deserve study and praise from any thinking person. Here I review some of my reasons for saying that.

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