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.

Continue reading →

Spurring growth in an era of constraints

From 30 ‘Memos to the Left’ entitled ‘Progressive Governance: The Politics of Growth, Stability and Reform’.

For over four years, the economies of the Euro zone, the UK, US and Japan have been mired in a slow and hesitating recovery from the deepest recession since the Great Depression. In the beginning, policymakers responded aggressively to both the illiquidity and insolvency problems in the financial systems, and the collapse in aggregate demand. …

Continue reading →

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.

Continue reading →